Physical AI

Physical AI development is fragmented. While giants like OpenAI focus on large models, Hitachi and Siemens champion domain expertise. Hitachi’s approach emphasizes foundational understanding of physics and industrial equipment, citing projects with Daikin and JR East as proof of concept. Their R&D also targets accelerating software development and ensuring safety through integrated design. Hitachi Vantara is also leveraging NVIDIA hardware for advanced digital twins, aiming to create robust physical AI systems.

Alibaba has launched RynnBrain, an AI model for robotics, to enhance robots’ environmental understanding and object recognition. This strategic move places Alibaba in the competitive “physical AI” sector, alongside global giants like Nvidia, Google, and Tesla, all racing to advance AI in robotics. By open-sourcing RynnBrain, Alibaba aims to accelerate its adoption and innovation in this rapidly expanding field.

Autonomous trucking startup Waabi has raised $750 million in Series C funding, with an additional $250 million commitment from Uber. This significant capital will fuel Waabi’s expansion into the robotaxi market and accelerate the development of its “physical AI” driverless systems. The funding, co-led by Khosla Ventures and G2 Venture Partners, and supported by investors like Nvidia and Volvo, highlights confidence in Waabi’s safety-focused, capital-efficient approach to autonomous technology.

Nvidia CEO Jensen Huang sees AI-powered robotics as a “once-in-a-generation” opportunity for Europe, leveraging its strong industrial base. This “physical AI” could allow Europe to lead beyond the current software era. Major European manufacturers and tech giants are investing heavily in robotics, with significant global investment flowing into the sector. However, Huang stressed that Europe’s high energy costs and the need for robust energy infrastructure are critical challenges that must be addressed to fully capitalize on this AI robotics boom.

At CES, Las Vegas transformed into a hub for advanced humanoid robots, showcasing impressive dexterity in tasks from retail to gaming. Nvidia’s CEO highlighted how AI infrastructure is fueling this progress, with new models like Gr00t designed for robotic control and Cosmos for reasoning. While fictional robots have long captured imaginations, generative AI is now bridging the gap to reality. Major tech players are heavily investing in physical AI, with significant market potential projected. Despite impressive demos, widespread commercial deployment is still some way off, though companies are offering comprehensive development ecosystems to accelerate innovation. Early consumer models are emerging, alongside entertainment-focused bots, signaling a future of increasing human-robot integration.

Hangzhou is emerging as a global AI hub, driven by a dual focus on advanced “physical AI”—robotics and autonomous systems—and more whimsical applications. The city’s tech scene, featuring companies like Manycore, Unitree, and Deep Robotics, is fueling China’s national AI strategy, which prioritizes embodied intelligence. While competition intensifies with the US, Hangzhou’s ecosystem benefits from lower energy costs and an open-source approach to AI development, fostering diverse innovation from practical solutions to creative digital companions.

Tuya Smart launches “Hey Tuya,” a next-gen AI life assistant designed for ubiquitous integration into daily routines, mirroring J.A.R.V.I.S. This multi-device system learns user habits and anticipates needs, offering proactive support across home, work, and personal life. Powered by Tuya’s proprietary PAE engine and a global network, Hey Tuya aims to advance physical AI by enabling seamless interaction and control of smart devices, fostering an open ecosystem for AIoT innovation.

At the 2025 Litui Speech, AAC Technologies showcased its “Physical AI” strategy, aiming to redefine human-machine interaction. AAC’s approach focuses on sensory solutions that prioritize human experience, translating reality with “Physical AI” and establishing a “Perception Haute Couture” trust label. This involves integrating sensory devices with AI to enable machines to understand and respond to their surroundings, as demonstrated by applications in mobile concert halls, in-car ecosystems, and robot dexterity. AAC envisions a future where senses have algorithms and space can be decoded, expanding human perception through technology.