AI Investors Demand Answers as $675M Factory AI Deal Lands

Major institutional investors are demanding greater oversight of how companies govern artificial intelligence, even as billions of dollars continue to flow into AI deals across the industrial and legal sectors.

The California Public Employees' Retirement System (CalPERS), one of the largest pension funds in the United States, is joining a growing group of institutional investors seeking clearer rules for AI use at the companies they fund. These investors want to know how companies manage risks such as bias, data privacy, and automation's impact on jobs. They are also pushing for board-level accountability, signaling that AI governance is shifting from a technical issue to a core concern for shareholders managing long-term money.

The push for oversight comes as AI investment accelerates. Japan's Omron has agreed to buy US-based OnLogic for $675 million as part of its push into physical AI—machines that use artificial intelligence to work in the real world, such as robots and factory equipment. OnLogic makes rugged industrial computers built to run in factories and other tough environments, and Omron wants that hardware to help build smarter machines.

In another sign of the sector's expansion, a new private-equity firm called Aldaron has closed its first fund and made its first investment, specializing in helping companies adopt artificial intelligence. Its co-founders come from Palantir and Carlyle.

The legal industry is also seeing AI expansion. Harvey, a US startup that builds artificial intelligence tools for lawyers, will open an office in Japan in 2027, its CEO said. The move marks the company's first major push into Asia. Harvey makes AI software that helps law firms and companies draft contracts, research cases, and review documents.

Not all AI-related moves are expansions. Airtable's new owner, Italian tech company Bending Spoons, announced it is laying off a "large part" of the software company's staff as part of a plan to rebuild Airtable around smaller teams and AI features. Bending Spoons bought Airtable for $1.28 billion in August. Airtable product lead Alessandro Savarese wrote in a blog post that the company plans to improve its core platform and invest in AI features.

Meanwhile, a San Francisco startup named Niobia is launching new technology to help factories spot defects instantly, focusing on makers of batteries and computer chips. The company aims to identify errors on the assembly line before they become expensive problems.