Sankaet Pathak, CEO and founder of Foundation, a company that builds a humanoid robot Phantom-01, poses for a photo during an interview with Reuters at his company’s factory in San Francisco, California, U.S., February 4, 2026.
Aleksandra Michalska | Reuters
Foundation Future Industries, a maker of military humanoid robots advised and backed by Eric Trump, failed to pay employees last month as its cash reserves dwindled, according to people with direct knowledge of the matter.
Workers have yet to receive paychecks after San Francisco-based Foundation missed payroll on Oct. 30, said the people, who asked for anonymity to speak candidly about a private company.
The situation has particularly angered some inside the startup because its CEO and co-founder, Sankaet Pathak, borrowed $4.6 million from the company last year to buy a luxury home, money that could have been used to pay workers, the people said.
Public records show that an LLC that names Pathak as sole principal purchased a $4.6 million Sausalito, California, property with “sweeping, cinematic views” of the San Francisco Bay in October 2025.
A spokesman for Pathak acknowledged receiving a detailed list of the major points from this story on Thursday, but didn’t respond to requests for comment. Pathak’s previous startup, a fintech firm named Synapse, collapsed in 2024, leaving thousands of Americans locked out of their savings accounts.
Foundation’s cash crunch comes at a precarious moment for the company, which Pathak has said is close to unveiling a next-generation, weapons-ready robot that will help the U.S. compete against Chinese rivals. At the same time, Pathak is seeking to raise hundreds of millions of dollars in funding at a $3 billion valuation.
The company has garnered headlines this year for Pathak’s claims that his robots could soon take on battlefield tasks in Ukraine or patrol the U.S. border with Mexico. Broadcast interviews and articles about Foundation also include claims that the company has won $24 million in Pentagon contracts.
“What we’re about to unveil in the next couple of months [is] going to be the strongest humanoid robot that exists anywhere in the world, including China,” Pathak said in an April television interview.
‘Plain sight’
That April interview introduced Eric Trump, the son of the U.S. president, as a Foundation investor and chief strategy advisor. It is unclear how large his stake is.
Eric Trump and his brother Donald Trump Jr. have invested in an array of defense firms, including makers of military drones and autonomous weapons. A July Washington Post investigation found that startups backed by investment vehicles linked to the brothers had secured at least $3.2 billion in government business.
“We have to win robotics in the United States of America,” Eric Trump said in April. “When you go up and interact with these robots … they fist bump you, they high five you, they follow your commands.”
Eric Trump’s involvement in Foundation drew the swift ire of Sen. Elizabeth Warren, D-Mass., who asked whether Foundation won U.S. defense contracts because of nepotism.
“Eric Trump went on FOX to brag about winning ANOTHER multimillion-dollar contract from the Trump administration,” Warren said in an April 23 social media post. “This looks like corruption in plain sight.”
Phantom-01, a humanoid robot developed by San Francisco-based startup Foundation for military purposes, sits at the company’s factory in San Francisco, California, U.S., February 4, 2026.
Aleksandra Michalska | Reuters
Eric Trump didn’t respond to requests for comment. His spokesperson recently told the Financial Times that Eric Trump had “no involvement in Foundation’s management, operations, strategic decisions or commercial activities, including the solicitation, negotiation, procurement or execution of any government contracts.”
While the Eric Trump announcement created speculation within Foundation that a Democratic-led Congress may look to investigate the company, Foundation itself didn’t actually win the $24 million in contracts, despite that assertion being widely reported across news outlets.
Instead, it acquired Florida-based Boardwalk Robotics in late 2024, and government research contracts won by that firm account for the claim, said a person with knowledge of the matter. Foundation used Boardwalk’s robot Alex as the basis for its first robot, the Phantom MK-1, this person said.
Foundation’s deal for Boardwalk included performance milestones for the robot that haven’t been reached, said a separate person with direct knowledge of the deal.
In 2024, CNBC reported that letters Pathak sent to prospective investors cited an imminent investment and $300 million purchase order from General Motors, claims the automaker rejected.
Foundation co-founder Mike LeBlanc said at the time he was “embarrassed” about the marketing materials.
Rescue loan?
Insiders fret that Foundation could soon fold if Pathak doesn’t secure fresh funding. Pathak has been seeking to raise hundreds of millions of dollars at a $3 billion valuation since at least January.
Pathak is Foundation’s sole board member, a structure that has raised concerns among prospective investors about corporate governance, said the people familiar with the matter. He also owns most of the firm’s shares.
That setup allowed Pathak to borrow $4.6 million last year, which he called a short-term loan at the time, the people said. Existing investors are aware of the loan through the company’s financial disclosures, the people said.
“This is what happens in a company with no governance,” said one of the people. “Are you just going to let it ride into the ground, and you ride off into the sunset?”
Foundation also ran out of cash for payroll in August, though employees only had to wait about two days to get paid after the company secured a bridge loan from an existing investor, the people said.
Pathak told employees this week in a memo that he was working on sourcing money to pay back wages.
The company was founded in April 2024 by Pathak, Tribe Capital CEO Arjun Sethi and LeBlanc, co-founder of Cobalt Robotics, a maker of autonomous security guards, according to a fundraising pitch at the time.
Foundation went on to hire dozens of robotics engineers and artificial intelligence experts, managing to lure some from Tesla and Amazon-owned autonomous vehicle company Zoox.
Missing money
Before Foundation, Pathak was known as the founder of Synapse, a kind of middleman that enabled fintech firms like Mercury, Dave and YieldStreet to offer savings accounts and credit cards with the help of small community banks.
Synapse was a behind-the-scenes player until its collapse left more than 100,000 Americans with a combined $265 million in deposits locked out of their FDIC-backed accounts.
While some customers received partial payments during Synapse’s bankruptcy proceedings, thousands remain without access to their money after more than two years. A bankruptcy trustee, the former FDIC chair Jelena McWilliams, said as much as $96 million in customer funds went missing.
The bankruptcy proceedings concluded last year without uncovering where the funds went; Pathak blamed a banking partner named Evolve, and Evolve blamed Synapse for the mess. U.S. regulators didn’t intervene until the Consumer Financial Protection Bureau sued Synapse last year, opening up a $55 million fund for customer relief.
Pathak withdrew $320,000 in loans from Synapse as it spiraled toward bankruptcy in 2024 amid disputes over unmatched ledgers, according to the consultant and independent journalist Jason Mikula.
Federal prosecutors convened a grand jury to investigate possible criminal misconduct at Synapse, the Wall Street Journal reported last year. The WSJ report didn’t mention Pathak specifically.
The controversy didn’t dissuade Eric Trump from investing in Foundation and Pathak, who he called a friend in the April broadcast interview.
“I walked into his factory, and I couldn’t believe what I saw,” Eric Trump said. “I’m telling you, he’s doing a phenomenal job.”
