technologyScore 45/100Watch
Vertical integration in robotics (hardware + intelligence + manufacturing) is critical moat; model-only companies face commoditization risk as open-source alternatives emerge.
Andrew Kang· Mechanism Capital· Robotics· 2026-07-31· about Figure AI, Physical Intelligence, Path Robotics
“I've maybe gone uh a little bit more uh bearish on model only companies... I've just gotten a lot more bullish on open source and I think open source models are going to start to monetize these closed source models and you're seeing that happen with LLMs right with you know Kimmy getting like as good as um as Fable on on some some benchmarks and I think that's going to happen in robotics as well... you have to co-develop both your model and your hardware to get the best results.”
Why it matters
Kang explicitly signals diminishing conviction in model-only/data-collection companies (Scale AI pattern). Open-source robot foundation models will commoditize the intelligence layer, shifting value to hardware design, manufacturing, and embodiment-specific data. This reshapes the robotics stack winners.
Investment implication
Vertically integrated robotics companies (Figure, Path Robotics) and hardware/actuator innovators will command premium valuations and margins. Data-collection and foundation model-only plays (Diva, Physical Intelligence) face margin compression and acquihire risk. Companies with proprietary actuators, manufacturing partnerships, or unique embodied data will sustain defensibility.