TechCrunch Mobility: ‘Physical AI’ enters the hype machine

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It’s been a minute, folks! As you might recall, the newsletter took a little holiday break. We’re back and well into 2026. And a lot has happened since the last edition. 

I spent the first week of the year at the Consumer Electronics Show in Las Vegas. And while I wrote about this last January, it’s worth repeating: U.S. automakers have left the building. 

What has filled the void in the Las Vegas Convention Center? Autonomous vehicle tech companies (Zoox, Tensor Auto, Tier IV, and Waymo, which rebranded its Zeekr RT, to name a few), Chinese automakers like Geely and GWM, software and automotive chip companies, and loads of what Nvidia CEO Jensen Huang calls “physical AI.” 

The term, which is sometimes called “embodied AI,” describes the use of AI outside the digital world and into the real, physics-based one. AI models, combined with sensors, cameras, and the motorized controls, allow that physical thing — humanoid robot, drone, autonomous forklift, robotaxi — to detect and understand what’s in this real environment and make decisions to operate within it. And it was all over the place from agriculture and robotics to autonomous vehicles and drones, industrial manufacturing, and wearables. 

Hyundai had one of the busiest and largest exhibits with a near-constant line wrapped around the entrance. The Korean automaker wasn’t showing cars. Nope, it was robots of various forms, including the Atlas humanoid robot, courtesy of its subsidiary Boston Dynamics. There were also innovations that have come out of Hyundai Motor Group Robotics LAB, including a robot that charges electric autonomous vehicles, and a four-wheel electric platform called the Mobile Eccentric Droid (MobEd) that is going into production this year. It seems everyone was embracing and showcasing robotics, particularly humanoids. 

The hype around humanoids, specifically, and physical AI, in general, was palpable. I asked Mobileye co-founder and president Amnon Shashua about this because his company just bought his humanoid robotics startup for $900 million: “What do you say when people tell you humanoid robots are all hype?” 

“The internet was also a hype, remember in 2000, the crisis of the internet,” Shashua said. “It did not mean that [the] internet is not a real thing. Hype means that companies are overvalued for a certain period of time, and then they crash. It does not mean that the domain is not real. I believe that the domain of humanoids is real.”

A few notable stories from CES:
Nvidia launches Alpamayo, open AI models that allow autonomous vehicles to ‘think like a human’

This is Uber’s new robotaxi from Lucid and Nuro

Mobileye acquires humanoid robot startup Mentee Robotics for $900M

Now onto the other non-CES and more recent news … 

A little bird

President Trump made comments this week at a Detroit Economic Club meeting about welcoming Chinese automakers into the United States that did not sit well with many in the auto industry, according to insiders I have spoken to. Specifically, I have been told the Alliance for Automotive Innovation (the industry lobbying group) is “freaking out,” one DC insider told me. 

“If they want to come in and build a plant and hire you and hire your friends and your neighbors, that’s great, I love that,” Trump said, according to reporters in attendance. “Let China come in, let Japan come in.”

A couple of notes. Japanese companies like Toyota are already very much in the United States. The bigger hurdle, beyond protests from within the boardrooms of U.S. automakers, is existing law. In 2025, the U.S. Department of Commerce’s Bureau of Industry and Security issued a rule that restricts the import and sale of certain connected vehicles and related hardware and software linked to China or Russia. This essentially bans the sale of Chinese vehicles in the country. 

Avery Ash, who is CEO of SAFE, a nonpartisan organization focused on securing U.S. energy, critical materials, and supply chains, weighed in about the dangers of allowing Chinese automakers to sell their vehicles in the United States. Side note: Ash was on my podcast, the Autonocast, which touches on some of this subject.

“Welcoming Chinese automakers to build cars here in the U.S. will reverse these hard-won accomplishments and put Americans at risk,” he said. ”We’ve seen this strategy backfire in Europe and elsewhere — it would have potentially catastrophic impacts on our automotive industry, have ripple effects on our entire defense industrial base, and make every American less secure.”

Meanwhile, Canada is opening the door to Chinese automakers. Canadian prime minister Mark Carney announced his country will slash its 100% import tax on Chinese EVs to just 6.1%, Sean O’Kane reports.

”Got a tip for us to share in the Little Bird section? Email Kirsten Korosec at kirsten.korosec@techcrunch.com or my Signal at kkorosec.07, or email Sean O’Kane at sean.okane@techcrunch.com. 

Deals!

Budget carrier Allegiant agreed to buy rival Sun Country Airlines for about $1.5 billion in cash and stock.

Dealerware, which sells software services to automotive OEMs and retailers, was acquired by a group of investors led by Wavecrest Growth Partners and Radian Capital. Automotive Ventures and automotive industry executives David Metter and Devin Daly also participated. The terms were not disclosed.

Long-distance bus and train provider Flix acquired the majority share of European airport transfer-platform Flibco. Luxembourg company SLG will retain some ownership stake in Flibco. Terms weren’t disclosed. 

JetZero, the Long Beach, California, startup developing a midsized triangular aircraft designed to save on fuel, raised $175 million in a Series B round led by B Capital, Bloomberg reported.

Joby Aviation, a company developing electric air taxis, reached an agreement to buy a 700,000-square-foot manufacturing facility in Dayton, Ohio, to support its plans to double production to four aircraft per month in 2027.

Luminar has reached a deal to sell its lidar business to a company called Quantum Computing Inc. for just $22 million. If that seems low, you’re right. Luminar’s valuation peaked in 2021 at $11 billion.

Notable reads and other tidbits

Bluspark Global, a New York-based shipping and supply chain software company, didn’t realize its platform was vulnerable and open to anyone on the internet. Here’s how a security researcher (and TechCrunch) got it fixed.

The Federal Trade Commission finalized an order that bans General Motors and its OnStar telematics service from sharing certain consumer data with consumer reporting agencies. Read the full story on what that means.

InDrive, the company that started as a ride-hailing platform that lets users set the price, is diversifying and starting to execute on its “super app” strategy. That means more in-app advertising across its top 20 markets and expanding grocery delivery to Pakistan. Read the full story here. 

Motional, the majority Hyundai-owned autonomous vehicle company, has rebooted. When Motional paused its operations last year, I wasn’t sure it was going to survive. Other AV companies with big backers have seen their funding disappear in a blink, so it was certainly plausible. But the company is here and with a new AI-first approach. Before you roll your eyes at that term, take a read of my article, which includes a demo ride and an interview with CEO Laura Major. Then feel free to hit my inbox with your thoughts. 

New York governor Kathy Hochul plans to introduce legislation that would effectively legalize robotaxis in the state with the exception of New York City. No details on this yet; I’ve been told it will all be revealed in her executive budget proposal next week. What we do know is the proposal is designed to expand the state’s existing AV pilot program to allow for “the limited deployment of commercial for-hire autonomous passenger vehicles outside New York City.” My article delves deeper into what she shared and gives an update on Waymo’s NYC permit. 

Tesla is ditching the one-time fee option for its Full Self-driving (Supervised) software and will now sell access to the feature through a monthly subscription.

On-demand drone delivery company Wing is bringing its service to another 150 Walmart stores as part of an expanded partnership with the retailer.