State capital behind the embodied AI frenzy: chasing deals, inflating valuations, guessing the future from policy documents

Hardware Kr interviewed multiple investors and FAs to trace how local state capital moved to the forefront of the embodied AI sector: in the first half of 2026, the sector saw over 300 domestic financing events, up 137% year on year, with 93.5 billion yuan disclosed in total, and state-owned institutions participated in 42% of large deals. Local investment promotion teams seek chain-leader companies according to policy directions, and some cities divide regional specialization by core components, bodies and brains, and dexterous hands. After Unitree's September 2026 listing, its market value halved and Hong Kong's 18C rules tightened; several interviewees believe the real financing pressure will be concentrated after November 2026.