Why Physical AI Matters Now
Generative AI’s rapid rise has been nothing short of revolutionary. Just six months after it went viral, Bloomberg projected that the Generative AI market would reach $1.3 trillion by 2032 with a CAGR of 42%. Yet, as with many technology cycles, Generative AI has hit the “trough of disillusionment.” As a result, the focus has now shifted toward Agentic AI—set to power 33% of enterprise software by 2028—and beyond that, to the next transformative wave: Physical AI.
Physical AI promises new opportunities, especially for those ready to take the plunge now. As we’ll see, this evolution has the potential to bring the vision of the Internet of Things (IoT) to life in ways previously unimaginable.
The Integration Imperative
Historically, emerging technologies have evolved not in isolation but through strategic integration with other technologies. Mobile, cloud, and big data transformed industries not as standalone forces but by enhancing one another. AI, too, is poised to drive significant value when combined with the physical world—a principle known as integration equilibrium. For Agentic AI, this means avatars won’t just stay confined to digital tasks but will be instrumental in merging the virtual and the physical.
Enter Physical AI: A New Era of Smart Technology
In the coming years, Physical AI will bring IoT’s promise to fruition. Imagine personalized AI avatars controlling physical devices, from adjusting your car’s temperature to managing your home’s security systems. Physical AI represents digital avatars operating as seamless extensions of the physical world, based on data from sensors and actuators. As Tech Target describes, it’s AI that responds to its environment without waiting for human intervention.
The Rise of Humanoids: AI Meets Robotics
Perhaps the most recognizable example of Physical AI is humanoid robots. Once the stuff of science fiction, these robots are now gaining traction, fueled by the popularity and infrastructure created by Generative AI. The humanoid robot market is projected to hit $66 billion by 2032, growing at an impressive CAGR of 45.5%. Companies like Figure, Sanctuary, and UBTECH are pioneering life-size robots for industries from manufacturing to healthcare.
From Tech-Driven to AI-Centric Businesses
AI’s reach is pervasive, and to stay relevant, every company today must become an AI-driven entity. The shift is no longer about merely adopting technology but about becoming AI-centric. AI will soon be ubiquitous, and those not embracing it risk becoming obsolete.
Product Linking: Bridging the Physical and Digital Realms
One upcoming trend will be the emergence of small, agile AI companies focused on linking products and services across AI disciplines. This shift could mean fewer large enterprises and more specialized businesses connecting AI entities in the IoT landscape. As Steve Lantham notes, terms like “connected products” better capture today’s IoT evolution. By using AI to bridge the physical and digital realms, small businesses can thrive in a Physical AI world, linking robotics and other technologies to expand industry networks.
Take Action: Become an AI Company Today
The time to act is now. Moving into AI requires a proactive approach, with massive levels of effort to stay ahead of the game. As Grant Cardone, the well-known sales guru, says: “If you’re not first, you’re last.”
Positioning yourself now as an AI-centered business will provide a market advantage as Physical AI reshapes industries. If you’re ready to explore how to leverage AI, machine learning, robotics, and IoT, let’s connect. I’d be happy to discuss strategies tailored to your goals.