LAS VEGAS — Marching lockstep with an industry pursuing the robotics sector, Arm Holdings on Tuesday established a dedicated physical artificial intelligence (AI) business unit at the Consumer Electronics Show here.
The British semiconductor design firm, which provides the underlying technology powering most of the world’s smartphones, will now operate through three primary divisions: Cloud and AI, Edge — encompassing mobile devices and personal computers — and the newly formed Physical AI unit, which incorporates the company’s automotive operations alongside robotics initiatives.
Drew Henry, appointed to lead the Physical AI division, emphasized the transformative potential of the technology. He suggested that physical AI solutions could fundamentally reshape labor markets and potentially drive significant gains in gross domestic product by automating tasks and creating efficiencies across industries.
The decision to combine automotive and robotics operations reflects shared technological requirements between the sectors, according to Ami Badani, Arm’s chief marketing officer. Both industries demand similar capabilities in power management, safety protocols, and reliability standards. Several major automakers are already expanding into humanoid robotics, blurring traditional industry boundaries.
The announcement comes amid rabid interest in humanoid robots at CES, where the technology emerged as a central theme. Throughout the sprawling convention center, companies large and small demonstrated robots capable of automotive manufacturing, janitorial work, and even dealing poker hands, albeit at considerably slower speeds than human dealers.
Arm’s technology already serves dozens of automakers globally and robotics firms including Boston Dynamics, the Hyundai-owned company that recently unveiled its production-ready Atlas humanoid robot. Hyundai plans to deploy these machines in American factories by 2028.
The reorganization represents part of Arm CEO Rene Haas’s broader strategy to expand the company’s business since assuming leadership approximately four years ago. The company has implemented pricing increases for its latest technology and is exploring the possibility of designing complete chips rather than solely licensing underlying architectures.
Arm generates revenue through licensing fees and royalties collected when manufacturers use its designs. The Physical AI division plans to expand its workforce with robotics specialists to capitalize on anticipated market growth.
Other major technology firms are making parallel moves. Intel Corp.-backed autonomous driving company Mobileye announced plans to acquire robotics firm Mentee for $900 million, while NVIDIA Corp. introduced Alpamayo and additional physical AI tools designed to power next-generation autonomous vehicles.
Industry analysts suggest the true value emerges when companies integrate advanced machinery with sophisticated artificial intelligence systems. According to PwC’s U.S. automotive industry leader C.J. Finn, the meaningful investments are occurring where AI enhances precision, productivity, and manufacturing capabilities, transforming what machines can accomplish across industrial applications.
