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Normally, I have an analysis and then a little bird (my insidery bits curated just for you). But today I am combining them because I simply have too many little birds talking to me about the new talent wars.
About seven years ago, the founder of a self-driving vehicle company told me that competing with the likes of Waymo for talent was “like a knife fight.” Now it seems there is a new poaching war going on, according to a handful of little birds. And it’s pushing base salaries (not including equity and other benefits) to between $300,000 and $500,000.
Here’s what is happening. The buzzy physical AI sector is filled with robotics and defense tech companies looking for people with a specific set of skills (to quote Liam Neeson). And these folks are mostly working at companies developing self-driving trucks and robotaxis.
As these employees get lured to other sectors — including defense — automakers and startups are being pushed to raise salaries or risk losing the talent to better-paying “physical AI” jobs.
The ideal candidate for an autonomous vehicle company has hybrid skills, a mix of classical robotics and AI know-how, according to one founder. It’s this specific understanding of how to integrate AI into hardware like humanoid robots, industrial robots, and autonomous forklifts, as well as with construction, mining, and agriculture equipment that has companies fighting over talent.
Defense tech startups are apparently the most generous when it comes to compensation, thanks to the Department of Defense’s open wallet. Jobs looking for an applied researcher or AI enablement engineer (or something similar to that) are hot tickets right now.
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This likely won’t hurt Waymo. As one founder noted, Waymo is price insensitive. But startups and automotive, which have heavily invested in autonomous vehicles, will likely be most affected, several little birds told me.
I predict a twofold follow-on effect. Automakers will have a hard time holding on to engineers who are working on automated driving, leading to an exodus. Meanwhile, startups will need to raise even more money or get a lot smarter about how those funds are used.
A little bird
Well you already got the little bird for the week. Scroll up! But I’m keeping this cute graphic around to remind you all to reach out, give me a call, or email with tips!
Got a tip for us? Email Kirsten Korosec at [email protected] or my Signal at kkorosec.07, or email Sean O’Kane at [email protected].
Deals!
Remember in 2016 when the words “self-driving” on a pitch deck seemed to instantly produce a term sheet? While the vibes of 2016 have percolated up into 2026, founders and investors have moved on. Now, as you have probably noticed, it’s all about physical AI, a loose category that stretches far beyond robotaxis and self-driving trucks.
The Palo Alto-based venture firm Eclipse has put itself at the center of the physical AI action and now has another $1.3 billion to invest in it. The new $1.3 billion in fresh capital is split between a $591 million early-stage incubation fund and one more oriented toward growth startups.
I chatted with Eclipse partner Jiten Behl about the fund and where those dollars are likely headed. I was particularly interested in his thoughts about Eclipse’s role in incubating startups. Eclipse hasn’t cut any new checks just yet, but Behl did say the firm will incubate more startups and said, “We’re definitely working on a couple of really cool ideas.”
So, stay tuned. And check out the full story here.
Other deals that got my attention …
Candela, a Swedish electric hydrofoil company, landed a 20-boat order with Norwegian operator Boreal. Meanwhile, Candela founder and CEO Gustav Hasselskog is stepping down. Sofia Graflund is the new CEO and Hasselskog will assume the role of executive chairman.
Hermeus, a Los Angeles-based defense startup that is developing unmanned aircraft, raised $350 million with a $1 billion valuation. That funding includes $200 million in equity led by Khosla Ventures. The remaining $150 million comes in the form of debt.
Sora Fuel, a sustainable aviation fuel startup based in Cambridge, Massachusetts, raised $14.6 million in a round co-led by Spero Ventures and Inspired Capital, Axios reported.
Transportation Secretary Sean Duffy said during an interview on CNBC that there’s room for airline mergers in the United States.
Notable reads and other tidbits
Avride is the latest autonomous vehicle company to face criticism from residents upset about the behavior of its robotaxis. In this case, it involved an autonomous vehicle (with a human safety operator) that ran over and killed a mother duck in the Austin, Texas, enclave of Mueller Lake. “It didn’t slow down or hesitate at all, just steamrolled through,” one witness said. Read the story to learn how Avride is handling it.
Gas prices aren’t the only factor fueling used EV sales.
John Deere reached a $99 million settlement agreement to resolve “right to repair” litigation pending in the U.S. District Court for the Northern District of Illinois. Wired has a good breakdown of the issue and why this matters.
If you didn’t get the memo, startups and Big Tech companies alike are working on physical AI and automation. Mariana Minerals, which is focused on the mining industry, is one of them. Senior reporter Sean O’Kane interviewed founder Turner Caldwell, a former Tesla engineer who founded the startup in 2024, about the company’s latest partnership with autonomous vehicle tech company Pronto (and yes, this is the Pronto founded by Anthony Levandowski that was just acquired by Uber co-founder Travis Kalanick’s startup Atoms).
Remember when Elon Musk said a smaller, cheaper $25,000 EV is pointless and silly? Well, according to Reuters’ sources, Tesla is developing an all-new smaller, cheaper electric SUV.
Volkswagen will no longer produce the all-electric ID.4 at its U.S. factory in Chattanooga, Tennessee. Its replacement? High-volume vehicles like the upcoming gas-powered Atlas SUV.
The ID.4 will be available to U.S. consumers until the current inventory runs out. VW tells me that it should last into 2027.
Meanwhile, Volkswagen subsidiary MOIA America is making a bit of progress on the autonomous vehicle front. MOIA America and Uber started testing autonomous microbuses in Los Angeles ahead of a robotaxi service the companies plan to launch by late 2026. Caveat! When this service launches, it will not be driverless at the start. The company expects to pull the human safety operator out of the vehicles in 2027. Also, the term “microbus” may be a bit of an overstatement; these vehicles will seat only four.
Waymo and Waze launched a data-sharing pilot program that will funnel pothole data collected by robotaxis to a free Waze platform designed for cities. Any city or state (or regular ol’ Waze user) where Waymo operates will be able to access that data as the program expands.
In other Waymo news, the Alphabet-owned company has opened its robotaxi service to the public in Nashville. Eleven cities and counting.
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