A former employee of Deep Blue Robotics expressed frustration that wages remain unpaid more than a year after leaving the company. In September 2026, the fifth batch of employee creditor claims for Deep Blue Robotics (Shanghai) was disclosed in court records, revealing unpaid wages exceeding 23 million yuan, with salary and severance arrears surpassing 21 million yuan, excluding separate unpaid housing fund and social security contributions, affecting more than 100 employees. Earlier in May, the Shanghai Pudong Court accepted the company's bankruptcy liquidation petition, with Deloitte appointed to manage the process.
This company was not an insignificant player, as its parent firm Deep Blue Technology had once been valued at 14 billion yuan as an AI unicorn. At its peak, Deep Blue Robotics even secured a spot on the procurement list of South Korea's LG Group. Sources close to the company suggested the collapse stemmed from cash flow difficulties and prolonged salary delays, noting that many orders were never executed at scale because products failed to perform effectively in real-world scenarios and were only suitable for demonstration purposes. Around the same time, Zhicheng Power, a pool cleaning robot company backed by investor Li Zexiang, also approached bankruptcy court, likely due to similar funding shortages and broken cash flow.
Order backlog never materialized at scale
2021 marked the peak of Deep Blue Robotics' success, when it announced a partnership with LG on disinfection robots, with LG planning to purchase tens of thousands of units over three years based on global demand, officially disclosed at over 700 million yuan in order value. To fulfill these orders, the company expanded its production capacity and filled its product pipeline across indoor cleaning, outdoor sweeping, UV disinfection, delivery, plus lawn mowing, gardening robots, and manned AGVs. However, employees later indicated that this celebrated order failed to meet expectations, as demand for disinfection robots receded and the order was never executed at scale, with many products unable to achieve effective deployment in real settings and limited to display purposes.
With orders failing and cash flow unable to turn around, Deep Blue Robotics fell into wage arrears in 2023. According to Changzhou Human Resources and Social Security Bureau announcements, between May and October 2023, Deep Blue Robotics (Changzhou) owed approximately 718,300 yuan in wages to 30 employees, and the company refused to comply with or implement administrative penalty decisions. This Changzhou entity operated the once-bustling factory there. Subsequently, wage arrears issues multiplied, covering an increasingly broad group of employees, eventually prompting some staff to apply for compulsory enforcement. In early May, the Shanghai Pudong Court accepted the bankruptcy liquidation case for Deep Blue Robotics (Shanghai), and by late May all active employees had their labor contracts terminated. By July, administrators had identified 101 potential employee creditors.
Regarding whether employees have recovered their money, a former employee told the media that after compulsory enforcement, a small portion of workers had salaries settled, but the majority remain waiting, with unpaid housing funds also unresolved. On September 16, Deep Blue Technology responded to the subsidiary's bankruptcy, stating it had accelerated the elimination and liquidation of long-term loss-making traditional businesses, completing the separation of non-core operations with strategic value. Notably, Deep Blue Technology itself is facing similar turmoil. Public records show that Deep Blue Artificial Intelligence Technology (Shanghai) Co., Ltd. faced enforcement of 329,400 yuan on May 23, 2026, and a high-consumption restriction on May 28, followed by a final execution of 362,400 yuan on September 15, and another restriction on September 18 stemming from an arbitration ruling. A Shanghai Pudong New Area Court notice indicates creditors have petitioned for bankruptcy liquidation of the parent company.
More than just Deep Blue has fallen
Multiple investors described 2026 as a transitional year when previous fundraising rounds were nearly exhausted and new funding tightened, leading to a shift in investment approaches toward robotics companies during the second half of the year. Under such constraints, more than Deep Blue Robotics has succumbed to funding issues, with the prominent company Zhicheng Power also approaching bankruptcy. Zhicheng Power (Suzhou) Technology Co., Ltd., founded in September 2021 by the former CEO of Xiaomi ecosystem company Moxiang Network, focuses on pool cleaning robots. Its shareholder roster reads like a robotics hall of fame: Xianfeng Changqing invested within a month of founding, Qingliu Capital and Qingcheng Capital joined the Pre-A round, Li Zexiang's Qingshuiwan Fund and Gan Jie's Zhixing No. 1 Fund led the A round in March 2024, and Ecovacs contributed tens of millions via strategic investment in January 2025.
Similar to Deep Blue Robotics, Zhicheng Power's failure stems from capital mismanagement, compounded by the seasonal nature of pool cleaning robots, which tests a company's cash flow control, and its focus on European and American markets, adding overseas cost pressures. Despite ample star capital backing, its overseas orders failed to sustain cash flow. Over the past two years, the robotics sector has seen continued capital enthusiasm, yet more than just these two star companies have collapsed, including orthopedic surgery robot firm Longhui Medical, adjudicated bankrupt in January, and Suzhou Houzhi Robot, also accepted for bankruptcy by Xiangcheng Court that month. Even Darui Robotics, once valued at over 20 billion yuan with cumulative funding of approximately 5.4 billion yuan, has been listed as a dishonest debtor and subject to high-consumption restrictions in recent months.
An industry insider noted that many robotics companies' orders remain at the demonstration stage, with cash flow dependent on successive financing rounds, citing examples where a label like "world model plus professor or genius youth" easily secured massive funding earlier, yet most products cannot support sustainable growth, making collapse inevitable. Another robotics company leader remarked that current valuations in the sector are excessively high, far exceeding reasonable expectations.
PPT companies no longer viable
Investors are becoming increasingly selective, as illustrated by venture capitalist Chen Yu during a robotics roundtable discussion, who contrasted 2023, when the concept of embodied intelligence was just emerging and funding was relatively accessible with just a tech team and concept, against 2026, when conditions have shifted dramatically. He noted there are now at least two to three hundred embodied intelligence companies, creating investor fatigue, with final investment decisions reduced to "checking boxes," essentially treating the sector like a broad ETF. By the second half of 2026, even this scattergun approach is tightening, with insiders sensing a slowdown in financing momentum, as investors now scrutinize specific product scenarios, commercial contracts, and customers rather than just PPT narratives, with some companies unable to present even these basic elements.
Another seasoned investor believes humanoid robots remain far from true maturity, while the real successes lie in collaborative robots for production lines. He emphasized that landing is not difficult, but making money is, and predicted that humanoid robot integrators would need at least three to five years to become profitable. This partly explains why a wave of former star robotics companies has collapsed this year, as their orders remain stuck at the demonstration stage, unable to secure stable customers and repeat orders, leaving cash flow reliant on next-round financing, which, once interrupted, renders survival impossible. Public data shows that funds flowing into the embodied intelligence track have not diminished, with approximately 93.4 billion yuan raised in the domestic sector during the first half of 2026, already exceeding the full-year total for 2025. However, capital is no longer uniformly directed at every company bearing the "genius youth plus world model/physical model" label, but rather evaluated across multiple dimensions. As one industry insider observed, the sector may quiet down for a period, which, while disruptive, is ultimately beneficial for the industry's health.