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Typically, I provide an analysis and then some insights (my insider information specially collated for you). However, today I am merging these because I have an abundance of insights regarding the ongoing talent battles.

Approximately seven years ago, a founder of a self-driving vehicle enterprise informed me that competing against giants like Waymo for talent was “like a knife fight.” Now it appears that a new hiring war is unfolding, as reported by several sources. This is driving base salaries (excluding equity and other perks) to a range of $300,000 to $500,000. 

Here’s what’s transpiring. The dynamic physical AI sector is crowded with robotics and defense technology firms seeking individuals with a distinct skillset (to borrow a phrase from Liam Neeson). These individuals are primarily employed at companies creating self-driving trucks and robotaxis. 

As these professionals are drawn to other fields — including defense — automotive manufacturers and startups are compelled to increase compensation or risk losing talent to higher-paying “physical AI” positions.

The ideal candidate for a self-driving vehicle company possesses hybrid abilities, combining traditional robotics with AI expertise, as stated by one founder. It’s this specialized knowledge of integrating AI into hardware such as humanoid robots, industrial machinery, and autonomous forklifts, along with construction, mining, and agricultural equipment, that has firms vying for skilled workers. 

Startups in defense technology are reportedly the most generous regarding salary, thanks to the Department of Defense’s ample funding. Positions seeking an applied researcher or AI enablement engineer (or similar roles) are currently in high demand. 

This is unlikely to adversely affect Waymo. As noted by one founder, Waymo is not sensitive to pricing. However, startups and established automakers, which have heavily invested in autonomous technologies, are likely to be most impacted, as a few sources have indicated. 

I foresee a two-fold subsequent effect. Automakers will struggle to retain engineers engaged in automated driving, likely leading to a departure. Concurrently, startups will need to secure more funding or become significantly more strategic in utilizing their resources.

A little bird

Well, you’ve already captured this week’s little bird. Scroll up! But I’m keeping this adorable graphic as a reminder for you to reach out, call me, or email with any tips!

Have 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!

Recall in 2016 when the mention of “self-driving” on a pitch deck seemingly guaranteed a term sheet? As the vibes of 2016 have flowed into 2026, founders and investors have transitioned. Now, as you’ve likely observed, the focus is on physical AI, an expansive category that encompasses more than just robotaxis and autonomous trucks.  

The venture firm Eclipse, based in Palo Alto, has positioned itself at the forefront of the physical AI movement and has secured an additional $1.3 billion for investment. This fresh $1.3 billion is divided between a $591 million fund for early-stage incubation and a fund directed towards growth startups. 

I spoke with Eclipse partner Jiten Behl regarding the fund and the likely direction of those investments. I was especially curious about his perspective on Eclipse’s role in nurturing startups. Eclipse has yet to issue new checks, but Behl mentioned the firm is planning to incubate additional startups and expressed, “We’re definitely working on a couple of really exciting ideas.”

So, stay tuned. And you can read the full story here.

Other deals that caught my eye …

Candela, a Swedish electric hydrofoil firm, secured a 20-boat deal with Norwegian operator Boreal. Meanwhile, Candela founder and CEO Gustav Hasselskog is stepping down; Sofia Graflund is the new CEO, while Hasselskog will take on the role of executive chairman. 

Hermeus, a Los Angeles-based defense startup focusing on unmanned aircraft, raised $350 million at a $1 billion valuation. This funding consists of $200 million in equity led by Khosla Ventures, with the remaining $150 million sourced as debt.

Sora Fuel, a startup based in Cambridge, Massachusetts, specializing in sustainable aviation fuel, raised $14.6 million in a funding round co-led by Spero Ventures and Inspired Capital, as reported by Axios. 

Transportation Secretary Sean Duffy mentioned during a CNBC interview that there is potential for airline mergers in the United States.

Notable reads and other tidbits

Avride has become the latest autonomous vehicle company to draw criticism from residents unhappy with the behavior of its robotaxis. This incident involved an autonomous vehicle (which had a human safety operator) that ran over and killed a mother duck in the Austin, Texas, neighborhood of Mueller Lake. “It didn’t slow down or hesitate at all, just steamrolled through,” stated a witness. Read the full account to discover how Avride is responding. 

Fuel prices are not the sole driver behind the surge in used EV sales. 

John Deere has settled for $99 million to resolve litigation regarding “right to repair” currently pending in the U.S. District Court for the Northern District of Illinois. Wired offers a solid analysis on the subject and its implications. 

If you missed the announcement, startups along with Big Tech companies are significantly focused on physical AI and automation. Mariana Minerals, which is centered on the mining sector, is among them. Senior reporter Sean O’Kane interviewed founder Turner Caldwell, a former Tesla engineer who established the startup in 2024, about the company’s recent collaboration with autonomous vehicle tech firm Pronto (and indeed, this is the Pronto founded by Anthony Levandowski that was recently purchased by Uber co-founder Travis Kalanick’s startup Atoms). 

Recall when Elon Musk remarked that a smaller, more affordable $25,000 EV was pointless and frivolous? Well, according to sources from Reuters, Tesla is now developing an entirely new smaller, budget-friendly electric SUV.

Volkswagen will cease the production of the all-electric ID.4 at its U.S. facility in Chattanooga, Tennessee. Its substitute? High-volume models like the forthcoming petrol-operated Atlas SUV.

The ID.4 will remain available to U.S. consumers until current stock is depleted. VW informs me that it should extend into 2027.

Meanwhile, Volkswagen subsidiary MOIA America is making progress in the autonomous vehicle arena. MOIA America and Uber have begun testing autonomous microbuses in Los Angeles in anticipation of a robotaxi service they plan to launch by late 2026. Caveat! At the service inception, it will not be driverless. The firm anticipates removing the human safety operator from the vehicles in 2027. Additionally, the term “microbus” might be an exaggeration; these vehicles will only seat four passengers.

Waymo and Waze have initiated a data-sharing pilot project that will transfer pothole data gathered by robotaxis to a free Waze platform designed for municipalities. Any city or state (or standard Waze user) where Waymo operates will be able to access this data as the program expands.

In other Waymo developments, the Alphabet-owned company has launched its robotaxi service to the public in Nashville. Eleven cities and counting.