VC Veteran at WAIC: AI Venture Trends & Promising Physical AI Boom

Fast-growing artificial intelligence advancements in China are attracting significant attention from major venture capital firms in Silicon Valley across the Pacific Ocean.

“I believe the conference concept is excellent. It encourages bringing people worldwide together to discuss AI,” shared Bill Reichert, a seasoned Silicon Valley venture capitalist, during an interview at the 2026 World Artificial Intelligence Conference, which began on July 17.

“Most AI conferences I’ve attended tend to be U.S.- or Western-focused, with few events from developing regions. The restrictions between the U.S. and China also limit our ability to have open discussions,” he added.

“Therefore, the goal of this conference is to foster openness and collaboration, allowing diverse perspectives to be heard globally. That’s a valuable aspect of this event. Today, cooperation in AI is more crucial than ever.”

This was his first time attending the conference. “I haven’t explored much of the event yet. I’ve seen a few companies, listened to a couple of speeches, and read a few more,” he noted.

Fundamental Changes Reshape Funding Metrics for AI Startups

Records indicate Reichert has played a role in funding or investing in at least 250 startups over his more than 30-year career, including companies like SpaceX, Impossible Foods, and Airbnb. Recently, at Pegasus Tech Ventures, he’s doubled down on investments in advanced technologies encompassing artificial intelligence, robotics, quantum computing, next-generation semiconductors, and biotech.

“AI has become incredibly more significant in our daily lives and the world in just the past few years,” he explained. “Although AI has a 70-year history, recent developments have shown us the profound, sometimes disruptive, impacts of AI. We are increasingly paying attention to its potential risks and benefits for both emerging and developed nations.”

He observed that valuation and risk assessment standards for early-stage AI startups have fundamentally shifted following the surge in generative large language models.

“Creating new applications has become remarkably simple. We’re witnessing a surge in entrepreneurs leveraging these models to tackle real-world issues across sectors like healthcare, legal services, government, logistics, and supply chains,” he elaborated.

“This rapid proliferation of AI-powered applications — or agentic AI — makes it challenging for investors to predict winners, as new competitors with equally powerful or better models emerge almost weekly,” he said. “This uncertainty complicates our decision-making process.”

Venture investors differentiate sharply between broad large language model-based AI and physical AI systems like robotics. Achieving leadership in robotics requires a rare combination of interdisciplinary expertise and proprietary technology that’s difficult to replicate. Firms leading in robotics can sustain market dominance through substantial competitive barriers, unlike pure software AI ventures, which face more transient advantages,” he explained. “This is the main challenge for us as investors in this field.”

Unique Investment Opportunities in Specific AI Domains

Asked which AI sector might produce the most sustainable returns over the next five years, Reichert emphasized physical AI — hardware-integrated AI in operational environments — as a key area with the potential for broad societal and business transformation.

“We’ve gained insights into the possibilities of large language models and generative AI, and we recognize how they are evolving,” he said. “With physical AI, we’re still exploring where it will make the most impact in our industries and daily lives. That makes it especially intriguing and ripe with investment opportunities.”

Additionally, Reichert advised Chinese AI startups to focus on developing and validating their products domestically before seeking international funding to expand globally.