Venture capital has moved significantly from pure GenAI funding towards robotics and defense tech. In the second week of February alone, Approtonik, creators of humanoid robots, raised a $520 million extension that pushed its Series A past $935 million total.
Throughout the week, defense tech, semiconductors and aerial robotics dominated the finding round and pure GenAI software was not included.
The Numbers Tell The Story
Defense tech had a groundbreaking run in 2025. According to PitchBook, the value of VC in the sector rose to a record of $49.1 billion last year from $27.2 billion in the previous year. Also, equity funding more than doubled from $7.3 billion to $17.9 billion and VC exits from defense investments surged to $54.4 billion, up significantly from the $18.2 billion in 2024.
On the robotics side, funding hit $2.26 billion in Q1 2026, maintaining the momentum from 2025. Meanwhile, PitchBook’s 2025 Emerging VC Opportunities report projects defense tech and SaaS to outperform the cross-sector annualized rate of return of over 21% in 2026, putting them among the top bets for the year.
Why Pure GenAI is Losing Its Edge
However, this doesn’t mean investors have lost interest in pure GenAI. Anthropic’s $30 billion Series G stands as the second largest venture round of all time. Funding is mostly focused on companies that have proved themselves while the others are left hanging dry.
Insight Partners’ Lonne Jaffe put it plainly: the big AI labs are now building the same tools that startups used to sell in finance, law, and healthcare. That leaves many GenAI startups competing for shrinking ground.
In addition, enterprises are now reducing the number of AI vendors they’re working with. For startups without a strong customer base, this is considered a serious threat to their longevity.
Why Robotics and Defense Tech Look Different
Both sectors offer something software alone can’t, real-world mobilization. For example, a robot being used in a factory will accumulate operational data, require deep integration and if faulty will take a long time to replace.
On the defense side, VC investment in national security focused startups has increased nearly 900% in a decade. Ukraine was used to drive this shift. It showed investors what autonomous systems and drones can do in real combat. According to CB Insights head of insights Jason Saltzman, the number of firms actively investing in defense tech rose 41%, with mainstream venture capital reframing defense bets as supporting democratic values as a result.
Looking ahead, Anduril, now worth over $30 billion, operates across land, sea, air space and cyber and PitchBook analysts consider maritime autonomous agents the next major investment frontier in defense AI.
Meanwhile, in robotics 2026 marks the shift from demo to deployment. Pilot programs are converting to purchase orders and unit economics improving with growth. This is exactly the kind of growth investors want to see after years of AI hype.
Ultimately, VC isn’t abandoning GenAI, it is simply getting more selective about what is being funded.
