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Usually I do an analysis and then make a little bird (I’ve hand-picked my inside story for you). But I’m combining them today simply because there are too many little birds talking to me about the new talent war.
About seven years ago, the founder of a self-driving car company told me that competing for talent with the likes of Waymo was “like a knife fight.” According to some of the birds, a new poaching war is brewing. And it’s pushing base salaries (not including stock or other benefits) from $300,000 to $500,000.
Here’s what’s going on. The thriving physical AI sector is full of robotics and defense technology companies looking for people with specific skills (to borrow a phrase from Liam Neeson). And these people primarily work for companies developing self-driving trucks and robotaxis.
As these workers are lured to other fields, including defense, automakers and startups must raise salaries or risk losing talent to higher-paying “physical AI” jobs.
The ideal candidate for a self-driving car company will have hybrid skills that combine classic robotics and AI know-how, according to one founder. A concrete understanding of how to integrate AI into hardware such as humanoid robots, industrial robots, and autonomous forklifts, as well as into construction, mining, and agricultural machinery, is what is causing companies to compete for talent.
Thanks to the Pentagon’s open wallet, defense technology startups seem to be the most generous when it comes to compensation. Jobs looking for applied researchers or AI enablement engineers (or similar) are hot right now.
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This probably won’t hurt Waymo. As one founder pointed out, Waymo is not price sensitive. But a few birds told me that startups and the auto industry, which have invested heavily in self-driving cars, are likely to be hit the hardest.
I predict a double sequelae effect. Automakers will find it difficult to retain engineers working on self-driving cars, leading to an exodus. Startups, on the other hand, will need to raise more money or be smarter about how they spend that money.
small bird
Well, you already got the bird of the week. Please scroll up! But I want to keep this cute graphic on hand to remind everyone to reach out, call, or email with tips.
Have a tip? Email Kirsten Korosec at kirsten.Korosec@techcrunch.com, email my Signal at korosec.07, or email Sean O’Kane at sean.okane@techcrunch.com.
Great deal!
Remember in 2016, when it seemed like the word “self-driving” on a pitch deck would instantly get you a term sheet? The vibe of 2016 permeates through to 2026, but founders and investors have moved on. Now, as you may have guessed, this is all about physical AI, a broad category that extends well beyond robotaxis and self-driving trucks.
Palo Alto-based venture company Eclipse has positioned itself at the center of physical AI activity and is currently investing an additional $1.3 billion. The $1.3 billion in new capital raised will be split between a $591 million early-stage incubation fund and a fund for growth startups.
I spoke with Jiten Behl, a partner at Eclipse, about the fund and where it’s going. I was particularly interested in his thoughts on Eclipse’s role in nurturing startups. Although Eclipse hasn’t cut any new checks yet, Behl said the company will incubate more startups, saying, “We’re definitely working on some really great ideas.”
stay tuned. And check out the full story here.
Other sales that caught my attention…
Swedish electric hydrofoil company Candela has received an order for 20 boats from Norwegian operator Boreal. Meanwhile, Candela’s founder and CEO Gustav Hasselskog is stepping down. Sofia Graflund will become the new CEO, and Hasselskog will take on the role of executive chairman.
Hermeas, a Los Angeles-based defense startup developing unmanned aerial vehicles, has raised $350 million at a valuation of $1 billion. The funding includes $200 million in equity led by Khosla Ventures. The remaining $150 million will be paid in the form of debt.
Sora Fuel, a sustainable aviation fuel startup based in Cambridge, Massachusetts, has raised $14.6 million in a round co-led by Spero Ventures and Inspired Capital, Axios reported.
Transportation Secretary Sean Duffy said in an interview with CNBC that there is room for airline mergers in the United States.
Notable reads and other trivia
Avride is the latest self-driving car company to face criticism from residents outraged by the way its robotaxis operate. In this incident, a self-driving car (with a human safety operator) struck and killed a mother duck at the Mueller Lake enclave in Austin, Texas. One witness said: “He didn’t slow down or hesitate at all, he just zipped through.” Read the story to find out how Avride is coping.
Gasoline prices are not the only factor driving sales of used EVs.
John Deere has reached a $99 million settlement agreement to resolve its Right to Repair litigation pending in the United States District Court for the Northern District of Illinois. Wired has a detailed explanation of this issue and why it matters.
In case you didn’t get the memo, startups and big tech companies alike are working on physical AI and automation. Mariana Minerals, which focuses on mining, is one of them. Senior reporter Sean O’Kane interviews founder Turner Caldwell, a former Tesla engineer who founded the startup in 2024, about the company’s latest partnership with self-driving technology company Pronto (yes, that’s Pronto, founded by Anthony Levandowski and just acquired by Uber co-founder Travis Kalanick’s startup Atoms).
Remember when Elon Musk said that small, cheap, $25,000 EVs are pointless and stupid? Now, according to Reuters sources, Tesla is developing an all-new small and inexpensive electric SUV.
Volkswagen will end production of its all-electric ID.4 vehicle at its U.S. plant in Chattanooga, Tennessee. Instead? Mass-produced vehicles like the upcoming gas-powered Atlas SUV.
The ID.4 will be available to U.S. consumers while current supplies last. VW told me it should last until 2027.
Meanwhile, Volkswagen’s subsidiary MOIA America is slowly making progress in the field of self-driving cars. MOIA America and Uber have begun testing self-driving microbuses in Los Angeles ahead of a robotaxi service expected to launch by late 2026. When this service launches, it will not be driverless at first. The company expects to remove human safety operators from its vehicles in 2027. Also, the term “microbus” may be a bit of an exaggeration. These vehicles only seat 4 people.
Waymo and Waze have launched a data-sharing pilot program that brings together pothole data collected by robotaxis into the free Waze platform designed for cities. Cities and states where Waymo operates (or traditional Waze users) will gain access to that data as the program expands.
In other Waymo news, the Alphabet-owned company has opened its robotaxi service to the public in Nashville. There are 11 cities and more are growing.
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