The Next Destination for VC Funds: "From AI Infrastructure to Physical AI" [Weekend Money]

"AI Application Market Driven by Policy Funds" Report

Samsung Securities: "Rising Interest in AI Agents and Physical AI"

Venture capital (VC), reinvigorated by policy-driven funds such as the K-Growth Fund, is currently putting greater emphasis on investing in artificial intelligence (AI). While investment initially focused on AI infrastructure, application potential is rapidly emerging as a key factor, leading to projections that the focus will shift toward AI applications, including physical AI and AI agents.

Samsung Securities, in its report "Growth of AI Applications Driven by Policy Funds," analyzed that "within the mainstream of VC investment—namely, the AI sector—the center of gravity is moving from infrastructure investment aimed at securing scale to the application sector, where real value is created through AI."

The VC market is being revitalized by the K-Growth Fund, into which the government is injecting 40 trillion won annually for five years starting this year. As of July, VC fund managers (GPs) overseeing a combined total of 4 trillion won were selected across two rounds. Most of the selected GPs are completing fund arrangements at levels double their target fundraising, and are expected to embark on full-scale investment activities in the second half of the year.

In this environment, domestic venture investment in the first half of the year reached a record high of 8.9 trillion won for the first-half period. Korean AI investments have focused on NPU infrastructure—such as Furiosa, Rebellions, Exyna, and POINTETechnology—as well as foundation-model-oriented infrastructure, including Upstage and Twelve Labs. Samsung Securities stated, "The government's independent foundation model development and the Everyone's AI Project are the key drivers behind domestic AI investment being concentrated on NPUs and foundation models."

Up to now, domestic VC investment in the AI sector has largely been concentrated on such AI infrastructure. However, Samsung Securities projects that the center of gravity will expand toward application domains such as 'AI agents' and 'physical AI.' The firm noted, "As AI model performance becomes more standardized and token costs fall, corporate interest is shifting from 'which AI is smarter' to 'which AI performs real work more effectively.' Now that high-performance AI models are available as general-purpose infrastructure, the significance of agents and application companies that can generate value in actual work is coming to the fore."

The report also stated, "With global aversion to blue-collar work, demographic aging, and soaring labor costs, physical AI has emerged as a critical survival factor for companies. In the long term, as humanoid adoption expands, the value of software layers such as AI models and data—as well as hardware—is also expected to increase."

The global market already recognizes strong growth potential in these two AI industries. McKinsey & Company projects the global vertical AI agent market to grow from $13 billion in 2026 to $74.5 billion in 2033, representing a compound annual growth rate (CAGR) of 28.3%. Regarding the global physical AI market, IBM predicts it will expand from $5 billion in 2025 to $82 billion in 2035.

Samsung Securities stated, "Global VC investment is already expanding into AI agents and physical AI, and next-generation AI unicorns are emerging from these sectors. In Korea as well, given the structural trend of a declining working-age population, demand from both the public and private sectors for AI agents to automate work and for physical AI to replace labor is expected to increase further."

This content was produced with the assistance of AI translation services.