China's Embodied AI Startups Tripled Valuations During the National Day Holiday

China's embodied intelligence startups raised more than 900 billion yuan in the first half of 2026 — five times the total for the same period last year, according to data from IT Juzi. The money did not spread across the market; it piled into a handful of deals at accelerating valuations, and venture capitalists spent the National Day holiday chasing allocations they had rejected weeks earlier.

One investor, writing under the pseudonym Chen Ming in an account published by 36Kr's Rongzhong Finance, learned on October 2 that an embodied intelligence project he had passed on had tripled its valuation. A WeChat message from an early-stage hard-tech investor friend reached him on a Sanya beach: "Bro, let me tell you something, don't spread it around — that embodied intelligence project has tripled its valuation." Chen Ming's first thought, he recalled, was not congratulations but four words: "We missed it." His firm had reviewed the project in the previous round, found the price too high, and hesitated for two weeks. Two weeks, in this year's venture capital market, is long enough for a project to close two rounds of financing.

How fast did the market move?

Sun Qi, founding managing partner of DaoTong Investment, described the pace in a Moments post forwarded widely by peers: "One of our brain-computer projects has not yet completed the delivery, and the subsequent round of convertible debt has already raised 150 million yuan, with its valuation tripling within two months."

The industry circulated more extreme cases this year:

• Institutions issuing term sheets to projects with a single founder
• Startups closing two rounds of financing less than a week after incorporation
• Valuations rising on a "rocket ride" within two weeks

The IT Juzi data quantifies the frenzy. Financing events in embodied intelligence exceeded 300 in the first half of 2026, up 137% year-on-year, with March and June each recording more than 60 deals in a single month. The average single financing amount from RMB funds rose from 249 million yuan in 2025 to 550 million yuan — more than doubling. Unicorns valued above 10 billion yuan now include Lingxin Qiaoshou, Galaxy General, Kuwa Technology, Smart Square, Zibianliang, Qianxun Intelligence and Zhiyuan.

Why are investors begging for allocation?

An early-stage investor who led a deal in a leading star embodied project told media: "This year we have observed a very special development trend in the industry, which is also a rare phenomenon in the years of practice of practitioners — multiple capitals have formed a highly unified investment consensus on the embodied intelligence and robot track." In plain terms, everyone is crowding at the same door to grab the same shares.

Chen Ming experienced the shift firsthand. At the end of September, before his holiday, he told an embodied intelligence founder the offer was on the high side and said "let me think about it." On October 4, he called the founder from a resort hotel lobby, children screaming in the background, and asked: "Mr. X, our internal review has been approved, can you… reserve 5% of the share for us, we can send out the TS tomorrow." The founder laughed: "Mr. Chen, you said the price was too high just last week." Chen Ming's reply: "It is expensive, but now it's even more expensive."

Another anonymous early-stage investor described the current founder posture: "no due diligence accepted, no performance commitment accepted, only ask if you can transfer the payment today, the price won't be the same next week."

Chen Ming later wrote in his partner group: "Some assets that were originally 10-year dimension stories have been compressed by market expectations to be realized within 3 years, leading to excessive overdraw of valuation." Everyone agreed with the analysis. Nobody slowed down, because the price of slowing down is losing even the "overdrawn valuation." Days later he secured the allocation — at a price far above the one he had rejected.

What happens when the bubble deflates?

One investor proposed a simple test for whether a valuation is "ridiculous": if a large company bought the entire star project outright, would the price hold? His guess — for many companies valued at 10 billion or 20 billion yuan, an outright acquisition would force a large price cut, and in some cases no buyer would step in at all. The primary market is essentially "long-only": prices are set by the highest bidder, but liquidity covers only a small fraction of the paper value.

Few apply the test. By the time the calculation is done, the project has been snapped up with cash. The recent IPO wave reinforces the fear of missing out: Moore Threads, Muxi and Zhipu have gone public one after another in the past six months, with market values often reaching hundreds of billions of yuan, and tens of billions in paper returns now common. Unitree Technology completed its Sci-Tech Innovation Board review process in just 73 days.

Everyone knows there is a bubble, the account notes, but no one wants to be the investor who watches teammates eat meat while chewing grass. On the last night of the holiday, Chen Ming wrote an internal memo titled "Market Observation During National Day Holiday: Cold Thinking Behind the Crazy Surge of Valuation" — then deleted "Cold Thinking" and retitled it "What Else Can We Do." He did not have an answer. He only knew his first task back in Beijing would be opening the investment committee schedule, not sorting through seven days of holiday photos.