Accelerating Physical AI: Embodied Intelligence for the Next Frontier of AI-Powered Robotics

The European Innovation Council (EIC) is offering a grant opportunity under the Horizon Europe program titled "Accelerating Physical AI: Embodied Intelligence for the Next Frontier of AI-Powered Robotics." The call identifier is HORIZON-EIC-2026-AIC-01. It aims to support the development and commercialization of innovative solutions in the field of Physical AI and robotics, emphasizing the importance of embodied intelligence.

The opportunity is structured as a two-stage funding challenge. The call was opened on December 3, 2025, and the deadline for submissions is February 26, 2026. The total budget allocated for this funding is €6 million, with an expected 10 grants available at approximately €300,000 each.

Eligible applicants include single legal entities such as start-ups, small and medium enterprises (SMEs), and research performing organizations (including universities and research institutes). Larger companies that do not qualify as SMEs are not permitted to apply. This aims to focus efforts on early-stage innovators in the field.

The funding type involves direct grants structured as lump sum contributions, designed to simplify the funding process compared to traditional reimbursement models. Additionally, applicants will have access to Business Acceleration Services, which include mentoring, training, and networking opportunities.

The target sector for this challenge is Physical AI. The specific application areas encouraged include disaster response and civil security robotics, autonomous scientific discovery labs, and intelligent robotic assistants designed for professional or personal use. This initiative aligns with EU strategic goals including technological sovereignty and industrial competitiveness.

The project is divided into two distinct stages. In Stage 1, which lasts up to nine months, applicants must demonstrate technical viability and market potential through a series of milestones, aiming to reach a Technology Readiness Level (TRL) of 4 to 5. If successful, projects may transition to Stage 2, which can last up to 2.5 years and provides further funding of up to €2.5 million for comprehensive development and real-world testing, targeting a TRL of 6 to 7.

There is no explicit co-funding requirement for the Stage 1 grant amount, although evidence of stakeholder interest through letters of intent is encouraged. The success rates for funding are not clearly defined, but the estimated number of grants suggests a potential success rate below 10% given the anticipated application volume.

Overall, this funding opportunity is designed to cultivate substantial innovations in Physical AI, encouraging solutions that offer significant societal and economic impacts, while ensuring compliance with ethical and trustworthiness standards set by the EU. Interested applicants must demonstrate robust prototypes meeting specified conditions and address genuine market needs, establishing pathways for advancing the integration of AI-powered robotics into practical applications.

The EU's Horizon Europe program is offering the EIC Advanced Innovation Challenge, specifically targeting "Accelerating Physical AI: Embodied Intelligence for the Next Frontier of AI-Powered Robotics" under the call HORIZON-EIC-2026-AIC-01. This challenge aims to foster the development and commercialization of disruptive Physical AI solutions, enhancing Europe's technological sovereignty, sustainability, and global competitiveness. The call is structured as a two-stage competition, focusing on delivering scalable prototypes validated in real-world environments. The AI powered robotics models developed under this Challenge are expected to comply with the EU concept for Trustworthy AI and the relevant ethical principles with due attention paid to data quality, transparency and accountability, privacy, security and safety.

The total budget allocated for this topic is 6,000,000 EUR. The funding will be provided as HORIZON EIC Grants, utilizing the HORIZON Lump Sum Grant [HORIZON-AG-LS] model. The call is a single-stage submission process, opening on December 3, 2025, and closing on February 26, 2026, at 17:00 Brussels time. The indicative number of grants to be awarded is 10. The estimated contribution per grant is around 300,000 EUR.

The expected impact of this challenge includes strengthened European leadership in physical AI, reduced reliance on non-European technology providers, and contributions to EU priorities in sustainability, resilience, digital transformation, and industrial competitiveness.

The objective is to support solutions that demonstrate both novelty and applicability of Physical AI technology, while mitigating associated risks. Applicants to Stage 1 must demonstrate a clear outlook on the potential longer-term impacts of their solutions.

Stage 1 focuses on solution validation and benchmarking. Applicants with disruptive physical AI systems that have achieved a prototype (at least TRL 4) will be invited to refine and validate their prototype in a relevant environment, develop a methodology for performance assessment, assess ethical, data governance, and scalability considerations, identify challenges to integration, conduct initial performance benchmarking, and develop an initial market analysis, business plan, and model. The outputs of Stage 1 will be assessed against milestones including evidence of technical viability with initial performance data and a clear commitment from end users and stakeholders to further develop the solution in Stage 2.

Stage 2 focuses on development and user testing. Applicants selected for Stage 2 will be expected to further develop and validate their Physical AI system through activities such as building and testing a robust, integrated solution capable of autonomous operation in complex environments (reaching TRL 6-7), addressing scalability and manufacturability, conducting necessary testing and compliance activities towards certification or regulatory approval, organizing consultation meetings with stakeholders, and developing a roadmap to commercialization. At the end of Stage 2, projects will be expected to have delivered a robust, integrated solution capable of pilot deployment in a real-world environment, demonstrated reliability, adaptability, energy/resource efficiency, and safe human-AI interaction, and provided evidence of necessary testing and compliance activities.

The scope of the challenge includes proposals for developing disruptive Physical AI innovations that demonstrate at least two of the following characteristics: Intelligent Perception and Cognition, Adaptive Learning and Optimisation, Autonomous Decision-Making and Collective Intelligence, Human-AI Collaboration and Interaction, and Physical Integration and Innovation. The solutions must also focus on addressing pressing needs in at least one of the following application areas: Disaster response and civil security physical agents, Autonomous labs for Scientific Discovery, and Personal or professional robot assistants. The Physical AI solutions should adhere to principles of Responsible AI, Trustworthiness, Security, and Human Centrism.

Entry requirements include demonstrating the interest of potential end users and integrators, having an initial physical AI system prototype tested in the lab, access to appropriate infrastructure for data collection and testing, and a challenging use case formulated by a potential end-user, supported by a letter of intent.

The call is open for submission by a single legal entity established in a Member State or an Associated Country if the entity is a start-up, SME, or research performing organization. Larger companies that do not qualify as SMEs are not eligible to apply as a single legal entity. Proposal page limits and layout are described in Part B of the Application Form available in the Submission System. The list of eligible countries is detailed in Annex 2 of the EIC Work Programme 2026. Financial and operational capacity and exclusion criteria are described in Annex 2(C) of the EIC Work Programme 2026. Applicants should refer to the Model Grant Agreement (MGA) used for EIC actions under Horizon Europe. Specific conditions are described in Section IV of the EIC Advanced Innovation Challenges- Pilot of the EIC Work Programme 2026.

Additional relevant documents include the EIC Work Programme 2026, EU Financial Regulation 2024/2509, the Decision authorising the use of lump sum contributions under the Horizon Europe Programme, Rules for Legal Entity Validation, LEAR Appointment and Financial Capacity Assessment, the EU Grants AGA — Annotated Model Grant Agreement, the Funding & Tenders Portal Online Manual, the Funding & Tenders Portal Terms and Conditions, and the Funding & Tenders Portal Privacy Statement.

To apply, applicants must access the Electronic Submission Service through the Funding & Tenders Portal.

In summary, this EU funding opportunity targets SMEs, start-ups, and research organizations to develop and validate Physical AI solutions for robotics, with a focus on real-world applications, ethical considerations, and European competitiveness. The challenge is structured in two stages, starting with prototype validation and benchmarking, and progressing to development and user testing, with the ultimate goal of achieving scalable and commercially viable AI-powered robotic systems.

Eligible Applicant Types: Startups, SMEs, research performing organizations (universities, research or technology organizations, including teams, individual Principal Investigators and inventors) are eligible as single legal entities (mono-beneficiary). Larger companies (i.e., those not qualifying as SMEs) are not eligible to apply as a single legal entity.

Funding Type: Grant. Specifically, HORIZON EIC Grants and HORIZON Lump Sum Grant are mentioned as types of action and model grant agreement, respectively.

Consortium Requirement: Single. The call is open for submission by a single legal entity (mono-beneficiary), except for larger companies.

Beneficiary Scope (Geographic Eligibility): Member States and Associated Countries are eligible. The specific list of eligible countries is detailed in Annex 2 of the EIC Work Programme 2026.

Target Sector: This program targets the Physical AI sector, specifically focusing on AI-powered robotics and embodied intelligence. It aims to accelerate the development, integration, deployment, and commercialization of breakthrough Physical AI solutions. The target application areas include disaster response and civil security physical agents, autonomous labs for scientific discovery, and personal or professional robot assistants.

Mentioned Countries: No specific countries are mentioned, but the eligibility extends to Member States and Associated Countries of the EU.

Project Stage: The projects should have achieved a prototype stage (at least TRL 4) at the time of application for Stage 1. The aim is to reach TRL 6-7 by the end of Stage 2. The challenge aims to deliver scalable prototypes, validated in a relevant real-world environment.

Funding Amount: The budget for the topic is EUR 6,000,000 for the year 2026. The indicative contribution per grant is around EUR 300,000.

Application Type: Open call. The submission session is available electronically.

Nature of Support: Money. Beneficiaries will receive funding through HORIZON EIC Grants and HORIZON Lump Sum Grants.

Application Stages: 2. The competition is a two-stage challenge. Stage 1 involves solution validation and benchmarking, while Stage 2 focuses on development and user testing. Progress to Stage 2 is contingent on delivering a full proposal which will be assessed alongside the milestones achieved under Stage 1.

Success Rates: The indicative number of grants is 10. Given the estimated number of contributions (around 300,000), the success rate is expected to be below 10%.

Co-funding Requirement: This information is not explicitly mentioned in the provided text.

Summary:

This is a two-stage EU-funded challenge under the Horizon Europe program, specifically the EIC Advanced Innovation Challenge, aimed at accelerating the development and commercialization of Physical AI solutions. The goal is to strengthen European leadership in AI-powered robotics and reduce reliance on non-European technology. The challenge is open to startups, SMEs, and research organizations from EU Member States and Associated Countries. Larger companies cannot apply as single entities.

The challenge focuses on developing disruptive Physical AI innovations with characteristics such as intelligent perception and cognition, adaptive learning and optimization, autonomous decision-making, human-AI collaboration, and physical integration. These solutions should address pressing needs in areas like disaster response, autonomous labs, and robot assistants.

The process involves two stages. In Stage 1, applicants with Physical AI systems at least at TRL 4 will refine and validate their prototypes, assess ethical and scalability considerations, conduct performance benchmarking, and develop a business plan. Stage 2 involves further development and validation of the Physical AI system, building and testing a robust solution capable of autonomous operation, addressing scalability and manufacturability, conducting necessary testing for certification, and refining the commercialization roadmap.

The funding is provided as a grant, with an indicative contribution of around EUR 300,000 per grant. The total budget for the topic is EUR 6,000,000. Applicants must demonstrate the interest of potential end users and integrators and have an initial physical AI system prototype tested in the lab, access to appropriate infrastructure, and a challenging use case supported by a letter of intent. The application process is electronic, and the deadline for submission is February 26, 2026.