Money might be flowing into AI agents, but physical AI isn’t far behind, according to new research from Capgemini, with the majority of industrial firms banking on the tech to unlock value in the shift from basic automation to autonomous action.

The Capgemini Research Institute’s report, Physical AI: Taking Human-Robot Collaboration to the Next Level, explores the impact of physical AI on robotics, an opportunity that over two-thirds of firms see as “game-changing”, especially across sectors like high tech (93%), warehousing and logistics (69%) and agriculture (59%).

This optimism is fueled by advances in foundation AI models, which are equipping robots with the intelligence needed to operate autonomously in complex environments, while at the same time, simulation technologies are compressing training cycles by enabling large‑scale learning.

Physical AI has reached a tipping point where firms are now looking at deployment at scale. Capgemini’s study, based on a global survey of more than 1,600 executives at enterprise firms, found 79% of organisations are engaging with physical AI, while more than a quarter (27%) are already deploying solutions.

Despite that enthusiasm, only 4% of firms are already operating physical AI at scale, with scaling remaining a challenge for nearly eight out of ten organisations.

A “AI‑robot‑data flywheel” is speeding progress, however, with deployed systems generating real‑world data that improves the performance of next-gen machines, gains amplified by advances in edge computing and batteries, and helped along by falling hardware costs. 

New commercial models, such as robotics‑as‑a‑service (RaaS), and connectivity breakthroughs, including in private 5G and precise wireless positioning, have also accelerated the development of physical AI systems.

It is widely expected that the combination of AI with robotics will present a sea change across industries, with 60% of executives saying that physical AI will enable applications that were previously impossible or impractical.

Use cases span hazardous operations, micro‑logistics, pick‑and‑place, and field inspection, as well as sector-specific applications like dynamic assembly in manufacturing, healthcare support in the public sector, and disaster-damage assessment in insurance.

That anticipated versatility means more than half of businesses now cite autonomous mobile robots, industrial robotic arms and cobots as the fastest growing robot forms in their organisation over the next five years, with two-thirds ranking physical AI as a high priority for investment.

Recommended reading

• “Physical AI” Market Tipped to Hit $200Bn by 2035
• Report: Policy Delays Holding Back £1.3bn Robot Opportunity
• Scottish Unis Develop Augmented Reality Tool for Old Robots

We are unlikely to see humanoid AI systems in the near future, however, with 72% of exes reporting concerns around technical immaturity, such as dexterity, while around 60% are deterred by high costs, unclear ROI, and concerns around public resistance.

“Robotics has a long history of overpromising, as early breakthroughs created expectations the technology could not yet meet,” said Pascal Brier, chief innovation officer at Capgemini.  

“What is different today is not the hype, but the convergence of AI, data, and engineering maturity. The opportunity is real, provided we focus on what works at scale. 

“Deploying physical AI responsibly, safely, and progressively will be essential to building trust, with security by design, transparency, and human oversight at the core of sustainable human‑robot collaboration.”