Spinning off its robotics arm to an independent division, physical artificial intelligence company Faraday Future Intelligent Electric Inc. has turned its attention to robotaxis in its latest business maneuver.
The El Segundo-based manufacturer divested its robotics business to FF EAI Robotics Ecosystem Inc. in an all-stock transaction valued at $200 million, finalized Oct. 23. Faraday Future became the majority stakeholder of the publicly traded company, tapping YT Jia as chief executive and Jerry Wang as executive chair for both.
The reason for the sale is to safely shield the robotics business under the wings of a company with a cleaner balance sheet, Wang told the Business Journal.
Faraday Future’s historical complications, including $200 million in liabilities and a complex startup capitalization table with convertible notes and warrants, may keep investors from seeing the true value of its robotics potential, he said.
Under the banner of FF EAI Robotics – formerly known as AIxCrypto Holdings Inc. – the robotics business might have a better presentation, he continued. After debuting three robots in Las Vegas in February, the company landed a $45 million investment in April from an unnamed U.S. institutional investor toward its embedded AI ecosystem developments in both robotics and electric vehicles. It has delivered over 800 robot units since its launch at a 30% gross margin, according to Wang, and is expected to end the year with about 2,000 shipped.
“It’s like a shining diamond being covered by some historical issues. It cannot realize the value, or people cannot see it shine,” Wang said. “We hope that this clean public company, merged together with this fast-growing business, can be the first pure-play physical AI robot public trading company in the United States.”
Faraday Future, on the other hand, will focus on breaking into the robotaxi market as a direct competitor to companies such as Elon Musk’s Tesla Inc. or Alphabet Inc.’s Waymo.
Making cars for consumer sale when robotaxis can offer more efficiency and a better price does not make sense anymore, Wang added. Currently recruiting its first small fleet under 100 units, it will provide charging capacity, cleaning and other maintenance services as a rideshare company while mostly leasing the units from other manufacturers. Its historic EV line may provide premium services in the future, he said.
“There is heavy competition in the traditional automotive industry. No one is making good money, even Tesla,” he said. “When this industry has this significant change, the company needs to change accordingly.”
The company has sustained many rounds of business pivots over the years. Despite investing over $3 billion into its initial luxury electric vehicle business, the beleaguered startup sold fewer than 20 units in total, dragging its stock price down to a fraction of its initial public offering in 2021.
It also earned itself multiple Nasdaq delisting warnings and an investigation by the U.S. Securities and Exchange Commission, which was dropped in March this year.
Between the initial robotics spin-off announcement Oct. 12 and the completion of the deal Oct. 23, Faraday Future’s share prices showed a plunge of about 42.7%, dropping from $1.09 to $0.62 per share at close. The acquisition party, similarly, saw a 24.7% decrease from $1.50 to $1.13 a share during that time.
Jia and Wang took over as initial co-founders last year after former Chief Executive Matthias Aydt departed the company, turning to robotics and embedded AI systems in a bet to turn the ship around.
Physical AI and robotaxis
The physical AI industry is gearing up to be the next “major chapter” for AI, according to a 2026 PricewaterhouseCoopers report. The global physical AI market is projected to reach over $478 billion by 2030 across various sectors, including autonomous driving, robotics, industrial automation, medical uses, aerospace and defense.
Among these areas of growth, autonomous driving leads the way. The fast-growing industry is expected to account for just under 40% of the global market at about $190 billion, accelerated by development in perception, world models and large-scale fleet learning. That covers robotaxis, shuttles, trucks and delivery services – “the largest Physical AI opportunity,” the report said.
“Physical AI will not diffuse uniformly. The automotive sector will lead adoption,” it continued. “Modern semiconductors and Physical AI software now support the perception, planning, and control needed for safe deployment at scale.”
Within the domestic market for robotaxis, Waymo stood out as the leading powerhouse.
The sister subsidiary to Google Inc. is now serving 500,000 paid rides per week across 15 cities, doubling the count in less than a year, according to company posts on social media. Buying base platforms from established automakers, the company focuses on an integrated system of hardware and software as its core product.
Another player in the scene, Tesla, relies on a much simpler model that relies on cameras and machine learning to compete with Waymo’s full suite of sensors. It is currently operating in six cities in Florida and Texas with under 400 vehicles – falling short of Musk’s claim to upgrade the existing Tesla fleet to “a million robotaxis” by the end of 2020 with trained software.
Though the market is large, technical challenges remain significant. Youngjun Choi, leader of general robotics and physical AI at Ernst & Young, told the Business Journal over email that the vehicles still need to navigate unpredictable environments across jurisdictions. That makes further development highly difficult.
Though hardware and software are increasingly capable, whether an autonomous driving operator can scale will hinge upon its ability to integrate services, fleet operations, mapping, simulation, data and infrastructure all at once, he further pointed out. The system needs to be holistic and adaptive to existing infrastructure.
“I wouldn’t say the market is saturated. I would say it is highly competitive, but we are still early in determining where autonomy can create sustainable economic value at scale,” he said. “I don’t think the autonomous vehicle business will be won by hardware or software alone. The real competitive advantage is the integration of the entire autonomy stack to (the) operational environment, which can be in-property enterprise systems or public infrastructure.”
Scalability is key, Choi added. Crunchbase data showed a $21.4 billion in funds raised for autonomous vehicle startups this year through April 15, representing a staggering 262.17% boost compared to the $5.9 billion raised in the entire 2025 across the world. The capital is increasingly concentrated among a handful of “scale-ready” players, he said.
Faraday Future is projecting a positive outlook, though one where its future may depend on whether the robotaxi business succeeds as a whole. Taking a cautious approach, Wang said a larger fleet may come in two to three years, pending local regulations – at least, that’s the hope.
“If we can get a small piece following this new industry development,” he said, “we’ll be doing just fine.”
