TL;DR
Ex-Tesla Optimus lead Jay Li settled a trade secret lawsuit with Tesla and raised $11M to ship dexterous robot hands from his startup Proception.
Proception, a robotics startup founded by former Tesla Optimus engineer Jay Li, has settled a year-long trade secret lawsuit with Tesla and raised an $11 million seed round led by First Round Capital to build dexterous robotic hands. The company told TechCrunch it is now shipping the first batch of its high-dexterity hand to researchers and robotics companies while opening to wider orders. Y Combinator and early-stage fund BoxGroup also participated in the round.
Tesla sued Li and Proception in federal court in Northern California in June 2025, accusing Li of downloading confidential files related to robotic hand actuation onto personal devices before resigning and founding the startup six days later. The lawsuit alleged that Proception’s hands bore “striking similarities” to Tesla’s internal designs. After months of legal proceedings, the two sides reached a settlement and Tesla dismissed the case earlier this month.
Li told TechCrunch he views the experience as “a resilience test, or pressure test” and believes the company emerged stronger for having survived it. He also said he would not be surprised if Tesla eventually comes to Proception for help with its own hand problem. Tesla did not respond to a request for comment.
Dexterous manipulation, the ability to grasp, rotate, and manipulate objects with human-like precision, remains one of the most stubborn unsolved problems in robotics. Even Elon Musk has called robot hands one of the biggest engineering challenges yet to be solved. Kevin Lynch, the director of Northwestern University’s Center for Robotics and Biosystems, told the Wall Street Journal last year that his team believes it will be a decade before robot hands become functional and useful enough to do what humans do.
Li thinks Proception can move faster, largely because of how it collects training data. Most companies training humanoid robots use teleoperators, where a human wearing a virtual reality headset controls a robot remotely and the system learns from the commands. A key drawback, according to Li, is that the operator receives no tactile feedback from the objects the robot touches, and the approach is limited to however many robots a company has available.
Proception’s alternative is a sensor-laden glove that captures human hand interaction data without requiring a robot in the loop. The same glove also serves as the sensor-packed “skin” on the robotic hand Proception is developing, which has 22 degrees of freedom and multiple joints per finger. Li argues this combination of scalable data collection and high-dexterity hardware is what the market is missing.
The dexterous hand market has attracted significant capital this year. China’s Linkerbot, which holds 80 percent of the global market in high-degree-of-freedom hands, is targeting a six billion dollar valuation after shipping more than 1,000 units a month. Genesis AI, a European startup, raised $105 million for a wheeled robot with dexterous hands, and Chinese competitors like Xynova have raised nearly one billion yuan.
Proception is betting that most humanoid robot companies will buy hands rather than build them in-house, mirroring how the automotive industry treats specialised components. First Round partner Bill Trenchard, who led the investment, told TechCrunch that dexterous manipulation is “the last mile of getting these robots to be truly performant.” He also praised Li’s leadership under the pressure of the Tesla lawsuit.
Tesla has discussed producing Optimus at its Shanghai Gigafactory and has deployed more than 1,000 Gen 3 units across its own facilities, but the robot’s hands remain its weakest link. Musk has set a target price of $20,000 to $30,000 per unit and projected production scaling to tens of thousands by 2028. Whether Tesla builds its hands internally or eventually sources them from companies like Proception is one of the open questions in the humanoid robot supply chain.
More than 150 companies are now chasing the humanoid robot market, with billion-dollar valuations common and only 23 percent of enterprise buyers satisfied with the products available. In that environment, a startup selling the component everyone agrees is the hardest to get right has a clear pitch, even at the seed stage. Whether Proception can scale from its first batch of shipments to a position where it shapes how an entire category of machines uses its hands is the bet First Round Capital just made.
