Physical AI: The moment of acceleration
Around the world, 2025 may prove to be the year when Physical AI (PAI) – the merger of physical systems with AI – definitively moved out of the realms of science fiction and into mainstream business consciousness. What has long been regarded as something for the future is now emerging as a practical reality, driven by cheaper and more capable hardware, and by software that learns how to learn. The paper explores the pathway for creating value with PAI in industrial robotics – the proving ground to scale value from PAI.
Key findings
Deloitte's State of AI Survey 2026 shows that for most business leaders PAI's current impact remains limited, but the trajectory is becoming clear.
- 5% → 41% share of firms expecting PAI to transform their organisation today vs within 3 years
- 3% → 18% firms with PAI extensively integrated today vs within 2 years
- 41% cite cost and resource requirements as the #1 barrier to PAI adoption
PAI has reached a threshold of practical viability. Along with rapid technology advances, the surrounding ecosystem is falling into place. Capital is flowing, and the competitive and governance environment is accelerating adoption.
Yet PAI is not simply a technology to be installed but a capability that needs to be cultivated through operational discipline and organisational learning. Leadership in the next decade will come from organisations that can systematically align operational maturity with the accelerating technology frontier. It requires a dual lens that aligns technology application maturity with operational maturity and transformation readiness.
This paper provides a structured, practical framework for business leaders navigating PAI adoption – where to start, how to sequence investment, and what organisational foundations must be in place for technology to deliver its potential.
Those who move now will not just gain an operational edge – they will build the organisational learning that shapes competitive advantage for the next decade.
Scott Sun
Deloitte China Life Sciences Sector Leader,
Deloitte China Alibaba Cloud Alliance Leader
