From robotaxis and surgical arms to warehouse swarms, AI is moving into machines that see, move, and act alongside people.
A New Phase: When AI Starts Moving Things, Not Just Words
For most people, AI has lived on screens—generating text, images, and code. But in 2026, the most dramatic changes are happening where AI meets motors, sensors, and metal.
This is the world of physical and embodied AI: robots, drones, vehicles, and smart equipment that don’t just reason about the world, but move through it. TechTarget defines embodied AI as systems that interact with and learn from their environments via sensors, actuators, and machine learning—think autonomous vehicles, humanoid robots, drones, and surgical systems. TechTarget
The money is following fast. MarketsandMarkets projects the global embodied AI market will surge from about $4.44 billion in 2025 to $23.06 billion by 2030, driven by robots that can perform complex, adaptive tasks with minimal human intervention. MarketsandMarkets A separate forecast pegs the broader “physical AI” market, covering intelligent machines in factories, logistics, and mobility, at close to $68 billion by 2034. Cervicorn Consulting
Consultants at McKinsey say these advances herald “robotic co-workers,” powered by embodied AI and foundation models, now being tested in warehouses, factories, hospitals, and even fields. McKinsey & Company NVIDIA, meanwhile, calls this shift physical AI—taking intelligence out of data centers and into robots, drones, and vehicles. NVIDIA Blog
Put simply: AI is leaving the chat window and stepping onto factory floors, operating rooms, and city streets.
Surgical Robots: From Augmented Hands to Semi-Autonomous Operators
Healthcare is one of the clearest examples of physical AI maturing fast. Surgical robots have been around for years, but AI is now making them smarter and more independent.
A 2024 NIH-backed report cited by the American Hospital Association notes that AI is being integrated into robotic surgery devices to automate tasks like suturing and tissue dissection, aiming to improve consistency and reduce surgeon workload. American Hospital Association In July 2025, Johns Hopkins reported that a robot trained on videos of human surgeons successfully performed a lengthy phase of a gallbladder removal on a realistic model without direct human control, adjusting in real time to voice instructions and unexpected events. The Hub
The business side is heating up too. Zimmer Biomet recently moved to acquire Monogram Technologies for about $177 million to expand its semi- and fully autonomous orthopedic robotics portfolio, including a semi-autonomous knee replacement system approved by the U.S. FDA in March 2025. Reuters Analysts expect the global robotic surgery market to hit around $16 billion by 2030, with AI-driven autonomy a key differentiator. Reuters
Governments are paying attention. In the U.K., Health Secretary Wes Streeting has put robotic surgery at the center of a 10-year NHS productivity plan, targeting a jump from roughly 1 in 60 surgeries being robot-assisted today to 1 in 8 by 2035. Financial Times That plan goes beyond operating rooms to robotics in pharmacies and administrative RPA, but the message is clear: AI-enhanced robots are moving from pilot projects to core infrastructure.
The near-term reality isn’t a robot operating solo in a theatre while humans watch from home. Instead, we’re seeing shared control: AI handling ultra-precise, repetitive actions, surgeons making high-level decisions, and hospitals rethinking training and safety around these hybrid teams.
Autonomous Vehicles: Robotaxis Edge Toward Normal
The most public face of physical AI is on the road. After a rocky decade marked by high expectations and painful setbacks, robotaxis are quietly entering a new phase of measured expansion.
Waymo, Alphabet’s self-driving unit, now runs fully driverless ride-hail services in multiple U.S. cities, including Phoenix, San Francisco, Los Angeles, and Austin, and has completed more than 10 million trips. Waymo The company recently announced plans to expand service to Las Vegas, San Diego, Detroit, and even London in 2026, while also rolling out purpose-built Zeekr-designed vehicles tailored for robotaxi use. Reuters
Amazon’s Zoox is also joining the fray. In September 2025 it opened its first public robotaxi service along the Las Vegas Strip, using compact, fully driverless vehicles built from the ground up without steering wheels or pedals. Car and Driver
Global momentum is building. A survey of robotaxi programs found commercial services running in several Chinese cities, with Germany planning deployment in 2025 and Japan targeting 2026. EV Magazine
Not every bet has paid off—General Motors shuttered its Cruise robotaxi division in late 2024 after safety issues and huge losses. The Guardian But the broader trajectory is unmistakable: embodied AI is now steering real vehicles with paying passengers, under increasingly strict regulatory regimes, in major urban centers.
The next frontier will be less about “can AVs drive?” and more about where they fit in urban mobility: feeding transit systems, reducing parking demand, or serving niche routes like airport links and dense downtown corridors.
Automated Factories and Warehouses: Swarms on the Shop Floor
If city streets are the most visible canvas for physical AI, warehouses and factories are where it’s scaling fastest.
The global warehouse robotics market is forecast to grow from about $6.51 billion in 2025 to $17.98 billion by 2032, roughly 15–16% CAGR, driven by e-commerce, labor shortages, and the rise of autonomous mobile robots (AMRs). Fortune Business Insights One analysis puts the autonomous mobile robots market itself at $2.8 billion in 2024, with a projected 17.6% CAGR through 2034 as AMRs spread from logistics into sectors like agriculture and hospitality. Global Market Insights Inc.
Precedence Research reports that AMRs are the fastest-growing segment in AI robotics for warehousing, particularly in picking, packing, and inventory tracking. Precedence Research McKinsey’s “robots on the rise” analysis argues that, with modern perception and AI, robots can now handle tasks that once seemed too fiddly—selecting and placing irregular items, directing instruments, even safely operating handheld tools in industrial settings. McKinsey & Company
At the factory level, a separate McKinsey study on the robotics revolution notes that digital twins—virtual replicas of production lines—are helping de-risk automation. New robotic cells can be simulated, tested, and tuned in software first, then deployed to the physical plant with much higher confidence. McKinsey & Company
Hardware vendors are racing to build the muscle. At Automatica 2025, ABB unveiled its “Autonomous Versatile Robotics” vision, showcasing mobile robots that plan and execute tasks independently and switch operations in real time without direct human guidance. Global X ETFs Europe NVIDIA’s “three-computer” robotics architecture combines training, simulation, and edge inference systems to power humanoids, warehouse robots, and industrial equipment as part of its physical AI push. NVIDIA Blog+2NVIDIA Newsroom+2
For plant managers and logistics leaders, the question is shifting from “Should we try robotics?” to “How quickly can we scale embodied AI safely without breaking our operations—or our energy budget?”
Humanoids, Construction Bots, and the Next Wave of “Robotic Co-Workers”
Beyond wheeled AMRs and industrial arms, a broader class of general-purpose embodied robots is emerging—often humanoid or bipedal, designed to operate in spaces built for humans.
McKinsey’s recent work on embodied AI and general-purpose robots estimates that the market for these systems could reach about $370 billion by 2040 in a base-case scenario, with funding for general-purpose robots growing fivefold from 2022 to 2024 and annual investment now exceeding $1 billion. McKinsey & Company
Construction is a prime testbed. A McKinsey-linked report urges general contractors to begin planning for humanoid robots on job sites, building road maps for tasks like material handling, layout, and repetitive installation. Construction Dive In parallel, other field robots are moving into agriculture, mining, and energy—spots where unpredictable terrain and safety risks make embodied AI especially valuable.
Policymakers are starting to see embodied AI as a strategic asset. A Hudson Institute paper warns that allowing China to dominate embodied AI manufacturing—especially in robotics embedded in supply chains—could threaten economic competitiveness and national security, given the scale of Chinese robot deployment. Hudson Institute
The stakes are higher than a cool demo; they’re about who builds and controls the machines that do physical work at scale.
Challenges: Safety, Skills, and the Energy Bill
The boom in physical AI doesn’t come without friction. Three challenges are front and center.
Safety and regulation
When AI systems control scalpels, forklifts, or 2-ton vehicles, safety isn’t just a software issue—it’s policy. Regulators are tightening standards for automated driving, requiring AVs to match or exceed competent human driver performance, with rigorous testing and continuous oversight. AP News Hospitals and health authorities are wrestling with liability, data governance, and workforce impacts of increasingly autonomous surgical systems. American Hospital Association
Skills and workforce
McKinsey’s embodied AI reports highlight a looming skills gap: companies need technicians, roboticists, and AI-fluent line workers who can operate, maintain, and collaborate with robotic systems. McKinsey & Company The Robot Report That means new training programs, reskilling initiatives, and, in many cases, renegotiated labor arrangements that define how robots and people share tasks.
Energy and infrastructure
All this physical AI runs on compute-intensive models and electrified hardware. As autonomous systems proliferate in warehouses and factories, they add to already steep data-center and industrial power usage. Analysts warn that energy-efficient AI—smarter chips, smaller models, better scheduling—must become part of the design criteria, not an afterthought. McKinsey & Company+1
In short, the question isn’t just “Can we build it?” but “Can we scale it responsibly?”
Closing Thoughts and Looking Forward
Physical and embodied AI is where abstract intelligence meets friction, gravity, and risk. It’s also where some of the most tangible economic and social benefits are starting to show up—from shorter surgical waitlists and safer worksites to more resilient, flexible supply chains.
Autonomous vehicles, surgical robots, warehouse swarms, humanoid construction helpers—these are no longer science-fiction sketches. They’re pilot programs, commercial deployments, acquisition targets, and sometimes even political talking points. The embodied AI market is on track to grow by an order of magnitude this decade, and the robots it funds are moving steadily from fenced-off cells to shared spaces with humans. MarketsandMarkets+2EV Magazine+2
But as AI gains a body, the stakes rise. Every new deployment forces hard choices about safety, jobs, data sovereignty, and energy. Countries are beginning to treat embodied AI as a strategic industry; companies are realizing that robot adoption is as much about change management as it is about hardware; and workers are discovering that “AI skills” now include knowing how to work with machines you can bump into in the hallway.
If the last decade was about teaching AI to understand our words and images, the next will be about teaching it to move through our world—carefully, collaboratively, and under rules we can explain. Physical AI is here. The question is whether our factories, hospitals, cities, and laws can evolve quickly enough to meet it halfway.
References
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“What Is Embodied AI? How It Powers Autonomous Systems”
TechTarget – SearchEnterpriseAI
https://www.techtarget.com/searchenterpriseai/definition/embodied-AI -
“Embodied AI Market Worth $23.06 Billion by 2030”
MarketsandMarkets via PR Newswire
https://www.prnewswire.com/news-releases/embodied-ai-market-worth-23-06-billion-by-2030—exclusive-report-by-marketsandmarkets-302496541.html -
“Will Embodied AI Create Robotic Coworkers?”
McKinsey & Company
https://www.mckinsey.com/industries/industrials-and-electronics/our-insights/will-embodied-ai-create-robotic-coworkers -
“Robot Performs First Realistic Surgery Without Human Help”
Johns Hopkins University Hub
https://hub.jhu.edu/2025/07/09/robot-performs-first-realistic-surgery-without-human-help/ -
“Physical AI — What’s Driving the Robotics Revolution”
NVIDIA Blog – Three-Computer Solution for Robotics
https://blogs.nvidia.com/blog/three-computers-robotics/
Author: Serge Boudreaux – AI Hardware Technologies, Montreal, Quebec
Co-Editor: Peter Jonathan Wilcheck – Miami, Florida
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