Since September 2026, the embodied AI sector has witnessed a notable downturn, as major investment firms have adopted more stringent investment approaches. Financial advisory (FA) institutions have set higher bars for project selection, financing cycles have become longer, and overall industry financing has seen a 40% month-on-month decline. Previously, the sector was characterized by rampant speculation, with scheme-driven entrepreneurial ventures being a common sight. Numerous stakeholders swiftly inflated project valuations through excessive promotion, fostering a fear-of-missing-out (FOMO) mentality and garnering endorsements from prominent institutions. Some projects experienced a staggering 15-fold increase in valuations within just a few months, with the entire sector propped up by a valuation bubble akin to a game of hot potato.

This downturn can be attributed to a confluence of factors, including conditions in the primary and secondary markets, as well as advancements in technology: leading institutions have largely finalized their deployments, share prices of relevant listed companies in the secondary market have taken a nosedive, and the foray of general-purpose large model manufacturers into the embodied AI space has disrupted the valuation rationale of existing embodied AI brain startups. Presently, the industry's bargaining power has tilted in favor of investors. High-valuation star enterprises are retrenching and laying off staff to weather the storm. Financing strategies have pivoted towards a "slow and steady wins the race" mentality, aiming to conserve funds, with investment logic reverting to rationality and capital flowing towards projects with tangible real-world applications and confirmed orders. The industry is now undergoing a period of oscillation adjustment (volatile fluctuations), with stability not anticipated until the latter half of 2027 or possibly the first half of 2028.