AI powered robots are slowly making their way into our world, from delivery bots on wheels to caregiver bots for the planet’s growing elderly population.
Nothing has captured the imagination of investors quite like humanoid robots, though, as they’ve poured untold billions into the sector amid hype that bots shaped like humans stand to impact almost every part of society — particularly by replacing jobs everywhere from domestic labor to the factory floor.
But a venture capitalist is now issuing a warning: that the current surge of investment dollars toward humanoid robots has the makings of the next financial bubble. Despite all the viral robot dancing videos, she says, the reality is that there are still an imposing number of technical kinks to work out — and hence, startups in the space are a long way from generating profits.
“[I]nvestors should remain disciplined and back companies that have realistic goals based on economics, not hype,” said Daiva Rakauskaitė, partner and manager at Aneli Capital, a venture capital firm based in Lithuania, in a company statement. “From day one, startups should aim for early revenue streams through licensing, partnerships and have a clear model of monetization in the near future. The same revenue-first philosophy can be applied to any field.”
She’s not the only one sounding the alarm. China’s leading economic planner, China’s National Development and Reform Commission, has warned that there’s a bubble forming around robotics and startups are making too similar robots from each other, which is inadvertently crowding out money for important research.
That’s on top of skepticism from robotics pioneer Rodney Brooks, inventor of the Roomba vacuum bot, who wrote earlier this year that all these investment dollars are a waste and humanoid robots are not safe enough to perform human tasks due to issues with hand dexterity and walking, among other lingering technical problems. In a nutshell, the gulf between what humanoid robots can do versus marketing hype is huge, Brooks said.
“We’re going to go through a big hype, and then there’s going to be a trough of disappointment,” he told The New York Times. (Underlining his warning: Roomba’s maker iRobot filed for bankruptcy this week.)
But we seem to be on a runaway train when it comes to humanoid robots, because “AI gives humanoids a commercial potential that was previously not possible,” the statement from Aneli reads.
In an October report from business analytics outfit CB Insights, the AI sector grabbed over 50 percent of more than $95 billion in venture capital funding in the third quarter of this year, while industrial humanoid robotic startups bagged 17 business deals.
But that report also warns about hype in the robotics space, saying it still faces “fundamental challenges with inference, dexterity, reliability, and cost, which limit initial use cases to structured environments like factories and warehouses with a controlled and predictable set of tasks.”
So what’s going to happen once the froth is gone: more humanoid robots dancing and working in factories — or junky vaporware bots collecting dust in our closets?
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