Mobileye acquires Mentee Robotics for $900 million

Mobileye has acquired humanoid robotics startup Mentee Robotics for $900 million. The transaction marks a significant move into Physical AI—which refers to AI models applied to real-world, physics-based environments. While some market observers view humanoid robotics as over-hype, Mobileye co-founder and president Amnon Shashua defended the sector’s long-term viability. Shashua compared the humanoid hype to the internet crisis of 2000, noting that temporary overvaluation and subsequent crashes do not mean the underlying domain is not real, and stated his belief that humanoid robotics is a real domain.

The acquisition of Mentee Robotics coincides with several other major transactions across the hardware and transportation sectors:

• JetZero: The Long Beach, California-based startup raised $175 million in a Series B funding round.
• Luminar: The lidar company is selling its lidar business to Quantum Computing Inc. for just $22 million, following its valuation peak in 2021.
• Allegiant: The budget carrier agreed to buy rival Sun Country Airlines for about $1.5 billion.

While investment in physical hardware continues, the automotive sector is experiencing regulatory friction regarding foreign market entry. President Trump recently commented that he would welcome Chinese automakers to build plants and hire workers in the United States. However, a DC insider reported that the Alliance for Automotive Innovation, an industry lobbying group, is “freaking out” over the prospect of Chinese automakers entering the U.S. market. Existing regulatory barriers remain high; in 2025, the U.S. Department of Commerce issued a rule restricting connected vehicles linked to China or Russia.

Avery Ash, the CEO of SAFE—a nonpartisan organization focused on U.S. energy and supply chains—warned against easing these restrictions. Ash stated that welcoming Chinese automakers to build cars in the U.S. would reverse hard-won accomplishments and put Americans at risk. He noted that this strategy has backfired in Europe and elsewhere, warning that it would have “potentially catastrophic impacts on our automotive industry, have ripple effects on our entire defense industrial base, and make every American less secure.” Meanwhile, Canada will slash its import tax on Chinese EVs from 100% to 6.1%.

Why it matters

The industry is pivoting from pure software to Physical AI, where AI models are integrated into real-world hardware like humanoids and autonomous vehicles, despite regulatory headwinds and market skepticism.