The field of physical AI, where artificial intelligence meets physical devices, is rapidly expanding, with over 4.7 million industrial robots in operation in 2024, a figure increasing by over 500,000 annually. This represents a significant shift from deterministic machines to robots capable of varied, complex tasks and responsive to changing circumstances, expanding their utility beyond car manufacturing to small-scale and dynamic operations. Benefits include reduced danger in physical jobs and improved efficiency, with Siemens reporting that AI-enabled robots reduce automation costs by 90% in assembly lines.
AI is enabling robots to perform tasks they previously couldn't, driving demand in new markets. For instance, Amazon utilizes over 1 million robots in its fulfillment centers, with AI capabilities allowing autonomous mobile robots to navigate obstacles and robotic arms to handle millions of different items. China is a major adopter, installing 54% of all new robots in 2024, more than six times Japan's total. Investment is robust, with 381 deals transacted in Q1 2025, a 20% increase from Q1 2024, and Softbank's acquisition of ABB's robotics arm for $5.4 billion highlighting industry consolidation.
In the US, companies like Agility Robotics are contributing to a potential manufacturing renaissance by building advanced robots domestically. Agility plans to produce 10,000 Digit model bipedal robots annually for warehouse and logistics work, with its RoboFab in Oregon being the "world's first factory" for humanlike robots. This US-based manufacturing leverages advances in 3D printing and AI, supported by government initiatives like President Biden’s $1 trillion infrastructure bill.
While robots fill labor gaps in dangerous jobs or markets with shrinking workforces, the increasing capabilities of AI-powered robots raise concerns about job displacement. Non-AI robots have already replaced between 6 million and 9 million manufacturing jobs globally since the 1980s. Experts predict further job cuts in manufacturing due to AI, with roles like production-line workers, quality-control assessors, and machine operators being most at risk, as AI-powered machines offer greater precision and consistency.
