Why Surface Art is built for physical AI prototyping in the Bay Area.

Physical AI is being built here

NVIDIA defines physical AI as AI that "enables autonomous machines, such as robots in factories and robotaxis," to sense and act in the real world. At CES in January 2025, Jensen Huang said "the ChatGPT moment for general robotics is just around the corner." Since then the capital has arrived.

Crunchbase counted about $15 billion in robotics startup funding in 2025, a record, and $9.9 billion in the third quarter of 2026 alone, against $4.3 billion a year earlier. PitchBook, using a broader "robotics and physical AI" category, counted $27.6 billion across 1,009 deals in 2025. Through 2026, Crunchbase puts US robotics startups at $12.1 billion, just behind China at $13.2 billion.

A large share of that work happens around the Bay. PitchBook data reported by the San Francisco Standard puts AI robotics funding in the region at more than $11.8 billion since 2020, the most of any metro. JLL notes that while San Francisco's robotics firms mostly lease offices, Silicon Valley firms prefer lab and industrial space. That's where the hardware gets built.

What's inside a robot: the boards you'll iterate

A humanoid isn't one board. Texas Instruments' application brief on humanoid motor control describes robots with up to 70 degrees of freedom, each with its own motor drive. A typical robot program iterates on several kinds of PCBA at once:

• Joint and actuator drives. Inverters, gate drivers, current sensing and encoder interfaces, linked to the main controller over CAN-FD or EtherCAT. TI's examples use real-time controllers in 9 × 9 mm and 10 × 10 mm BGA packages, because the electronics have to fit inside a human-sized joint.
• Power and battery management. TI describes a 48 V nominal bus; at the bottom of its range a 4 kW joint drive draws about 102 A rms. The robot's surface must stay under 55 °C, with no fans or liquid cooling.
• Sensors and cameras. Figure 03 puts cameras in its palms and tactile sensors in its fingertips. NVIDIA's Jetson Thor platform supports up to 20 cameras.
• Compute carrier boards. NVIDIA ships Jetson Thor as a module, and robot makers design the carrier board it plugs into. That board carries the high-density board-to-board connector, PCIe Gen5 and 25 GbE routing, camera deserializers and power sequencing. The NVIDIA chip itself stays on NVIDIA's module.
• Interconnect. Harnesses and cabling that run through joints that move all day.

For the assembler, that means fine-pitch BGAs on small, dense boards; controlled-impedance, high-speed carrier boards; and power boards that have to be built and inspected for reliability. Every one of them changes from build to build.

Robots break their boards, and that drives revisions

Physical AI hardware gets tested by the world, not just the lab. After an 11-month deployment at BMW's Spartanburg plant, Figure called the forearm its "top hardware failure point." Constant motion stressed the microcontroller-based PCB and cabling to the wrist. For Figure 03, the company "completely re-architected" the wrist electronics to eliminate the distribution board and the dynamic cabling.

That loop is now part of production. In April 2026 Figure said it had delivered more than 350 Figure 03s, ramped from one robot a day to one an hour, and was feeding field failures "back to the engineering team for hardware revisions." Figure also called the immature humanoid supply chain "one of the biggest hurdles."

For a team at an earlier stage, the lesson is the same: you will revise boards often, in small builds, under schedule pressure, and each revision is effectively a new first build. The partner that builds those boards has to review each revision fast, build it right the first time, and tell you what it found. Our post on NPI and high-mix, low-volume assembly covers why that kind of work suits a smaller, engineering-led shop.

2026 made "where it's built" part of the spec

Until recently, where a prototype board was assembled was a cost and convenience question. This year it became a product requirement for many robot and drone makers.

The FCC Covered List now includes robots and drones

On December 22, 2025, the FCC added foreign-produced drones and their critical components to its Covered List. The components include flight controllers, cameras and sensors, batteries and battery management, and motors. On July 28, 2026, it added foreign-produced mobile robots: humanoids, quadrupeds and autonomous mobile robots above 4.4 lb with perception, connectivity and autonomy. Fixed industrial arms are excluded. New covered models can't receive FCC equipment authorization, which they need to be marketed in the US.

"Foreign-produced" uses the Buy American test: the product has to be manufactured in the US, and domestic components have to make up more than 65% of component cost, rising to 75% in 2029. The manufacturer's nationality doesn't matter, and US design alone doesn't qualify. As Fenwick put it, imported subassemblies count against the threshold, "so a bill of materials audit is important." Electronics are a meaningful share of a robot's bill of materials. Where those boards are assembled may matter to how your product is classified, so ask your counsel how the rule applies to your design.

Tariffs on drones, and an investigation into robots

A Section 232 proclamation in August 2026 put 25% to 100% tariffs on imported drones and their critical components, effective September 3. A separate proclamation on October 28, 2026 found that imports of robots, industrial machinery and their parts threaten national security. No tariffs have been set yet, and an update is due in about six months.

No more duty-free prototype shipments

The $800 de minimis exemption has been suspended for all countries since August 29, 2025, and the suspension was made indefinite in June 2026. Every small lot of boards shipped from overseas now needs a customs entry and pays duty. Boards assembled in San Jose never cross a border, although many of their components still do.

The honest trade-off

Shenzhen is fast. Robotics founders who build there report board iteration cycles of a week or two, and at volume, offshore manufacturing usually wins on unit cost. We won't pretend otherwise.

The case for prototyping in the Bay Area is different. Your engineers can walk the line and look at the first board the day it's built. A DFM question gets answered the same afternoon instead of the next morning. Your design data stays in the country. And for robots and drones sold in the US, the 2026 rules mean the location of your electronics supply chain is part of the product. Prototype close to home, learn fast, and make the volume decision on its merits once the design settles.

What Surface Art brings to a robot prototype

Surface Art is a printed circuit board assembly and system manufacturer in San Jose, building since 1995 for programs that include satellites and drones, along with aerospace, defense and medical work.

• Review before the first part is placed. Every package gets DFM, DFT and a BOM scrub, and we pull the datasheet for every part. Before quoting, we send clarifying questions and state our assumptions.
• The parts physical AI boards use. 01005 passives, 0.4 mm-pitch BGAs, 0.25 mm CSPs, fine-pitch QFNs and high-layer-count boards up to 18" × 24", on four Juki SMT cells with nitrogen reflow.
• Inspection you can see. AOI on every build, X-ray for hidden BGA and QFN joints, flying probe for low-volume electrical test, and functional and in-circuit test fixtures as programs mature.
• Beyond the board. Cable and harness assembly, box build and system integration, for when a prototype becomes a fleet.
• Built for defense-adjacent work. ITAR-registered, ISO 9001:2015 and ISO 13485 certified, building to IPC-A-610. For programs that need it, we build on bare boards fabricated by US fabs.
• Numbers you can check. 99%+ first-pass yield and under 1% internal rework. We publish our on-time delivery and RMA rates every six months: 99.81% and 0.02% for January–June 2026.
• Room to grow. When your volumes fit our line, the team that built your prototypes can build your production run. When they don't, we'll tell you early.

More detail: quick-turn prototype and NPI assembly, BGA assembly and X-ray, box build and ITAR-registered assembly.

Questions to ask any prototype partner for robot electronics

• Will you review DFM, DFT and the BOM on every revision, not just the first build?
• What's the finest BGA pitch and smallest passive you build routinely, and how do you inspect hidden joints?
• How do you handle high-current power boards and controlled-impedance carrier boards?
• Can you build the cables and harnesses, and integrate subassemblies, as well as the boards?
• Where are the boards assembled, and where are the bare boards fabricated? Can you document both for a Buy American or Covered List review?
• Can my engineers visit the line during a build?
• Do you publish your actual on-time delivery and return rates?
• If my volumes grow, can you build production, and will you tell me honestly if you can't?