This was actually the approach that Vicarious AI took while I was there, and even $250m in VC funding wasn't enough to prove it out, although that may have been a problem of having too much money and not enough focus.

I think the problem (if it can be called that) is that LLMs are useful today, while we still haven't solved the embodiment problem. There's a lot more research before that'll work well, while LLMs have uses today. So the money goes to the LLMs. While it's pretty obvious that solving the problem would change society, it's also not clear how close we are to doing it. That makes it much harder to get the capital as it is a much larger risk.