VC experts on why Physical AI funding is heating up | E2333

September 2, 2026

AI Summary

5 min read

VC experts on why Physical AI funding is heating up | E2333

Physical AI companies raised nearly $50 billion in venture funding in the first half of 2026 alone — up 80% from 2025, and more than the combined totals of 2022, 2023, and 2024. That staggering number anchored a wide-ranging VC roundtable on This Week in Startups, where host Jason Calacanis was joined by Paige Doherty, founding partner of Behind Genius Ventures (BGV), and Caitlin Holloway, founding partner at 776. The conversation covered the Pentagon's AI rollout, EU regulation of ChatGPT, the rise of orbital data centers, and the deeper structural shifts driving capital into hardware and deep tech.

Pentagon embraces AI — and founders face a new kind of challenge

The Department of Defense rolled out a new AI portal for its three million service members, adding ChatGPT MIL (for paperwork, logistics, and policy) and Grok for Government (for supply chain analysis and acquisition work) to an existing Gemini deployment. Notably, Anthropic's Claude is absent — a lingering consequence of the company's refusal to relax its policies around military use of its technology.

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What you'll learn

1 VC experts on why Physical AI funding is heating up | E2333
2 Timestamped Outline
3 (00:09) **Physical AI Funding Explodes** - $50 billion raised in first half of 2026, up 80% from 2025, with six months outpacing 2022-2024 combined
4 (01:18) **Introducing Guests: Paige Doherty & Caitlin Holloway** - BGV founding partner Paige (26, on fund three) and 776 founding partner Caitlin join for VC roundtable
5 (09:23) **Pentagon Rolls Out Own ChatGPT and Grok for Military** - Department of Defense launches AI tools including ChatGPT MIL for paperwork and Grok for government for supply chain analysis
6 (12:46) **The Shift from Avoiding Government Contracts to Surviving Them** - Caitlin explains how the bottleneck has moved from winning contracts to actually delivering against them as a small company
7 (15:38) **Weaponizing AI and Robotics: The Moral Question** - Discussion of autonomous soldiers, robot dogs with guns, and the US needing to catch up with adversaries

+ Full timestamped outline available in the app

Guests on this episode

Jason Calacanis

Show Notes

VC experts on why Physical AI funding is heating up | E2333

This Week In Startups is made possible by:

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Today's show:

Are we one step closer to data centers in space? Katelin Holloway of Seven Seven Six and Paige Doherty of Behind Genius Ventures break it down what it would take.

Plus investor interest is surging in Physical AI companies. Paige explains why she backs applications of physical AI over general-purpose robotics, and how her thesis on multimodal AI led to the largest check she's ever written.

We then dive into the Pentagon's rollout of ChatGPT Mil and Grok for Government. And Katelin gives us her insight into how VCs are investing in Europe and the regulations behind the scenes.

Guests:

Katelin Holloway on X: https://x.com/katelin_cruse

Seven Seven Six: https://sevensevensix.com/

Paige Doherty on X: https://x.com/paigefinnn

Behind Genius Ventures: https://www.behindgeniusventures.com/

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