Chip design company Arm Holdings Plc announced the establishment of a new Physical AI business unit aimed at advancing semiconductor technology for robotics and intelligent vehicles. The unveiling occurred today during CES 2026 in Las Vegas, where a significant focus has been placed on the integration of robotics and physical AI enhancements across various applications.
The trade show showcased a wide array of robotic innovations, with companies demonstrating machines capable of performing tasks ranging from warehouse operations to autonomous car assembly. Arm’s new unit separates its robotics and automotive chip design efforts from its existing Edge division, which primarily services mobile device chips, as reported by Reuters. The company also maintains a Cloud and AI unit, broadening its technological reach.
Arm’s decision to unify its robotics and automotive chip design endeavors arises from the shared technological frameworks and safety requirements inherent in both sectors. While Arm does not manufacture chips directly, it excels in providing architectural designs and intellectual property utilized by a multitude of corporations to produce chips for the majority of the world’s smartphones, laptops, and data center processors. The company generates revenue through licensing fees and royalties from its designs.
Under the leadership of Chief Executive Rene Haas, who has been at the helm for approximately four years, Arm is evolving its business model by offering more comprehensive chip designs to select clients, demanding higher prices in the process. The company is also contemplating the development of its own complete chips for the first time, marking a significant shift in strategy.
The newly formed Physical AI unit will be led by Executive Vice President Drew Henry, who emphasized the transformative potential of robotics to “fundamentally enhance labor” and create time-saving efficiencies. He anticipates significant contributions to national gross domestic product from countries that effectively adopt such technologies.
While Henry refrained from disclosing specific client partnerships, he indicated that Arm is prepared to collaborate with a broad range of businesses. Notably, Boston Dynamics Inc., a prominent robotics firm previously owned by Google LLC and currently under the umbrella of Hyundai Motor Group, employs Arm’s chip designs in its robots.
Boston Dynamics has been a highlight at CES, unveiling a new humanoid robot named Atlas, which can operate independently in industrial environments. Atlas measures six feet three inches tall and weighs around 200 pounds, with production already underway. Hyundai has committed to employing Atlas robots in its vehicle manufacturing facility in Savannah, Georgia, to streamline production.
As advancements in artificial intelligence continue to shape the future of robotics, industry leaders are optimistic about integrating smarter technologies that allow robots to work alongside humans. Tesla Inc. CEO Elon Musk has articulated the importance of the company’s Optimus humanoid robots, suggesting they could eventually generate revenue surpassing that of its electric vehicles.
In a related development this week, Mobileye Global Inc., partly owned by Intel Corp., announced plans to acquire the robotics firm Mentee Robotics Ltd. for $900 million. Concurrently, Nvidia Corp. introduced a new open-source AI model named Alpamayo 1 at CES, which it aims to utilize for training navigation systems in autonomous vehicles.
As the robotics and automotive sectors increasingly intersect with AI advancements, Arm’s creation of the Physical AI unit underscores a strategic pivot to harness emerging technologies that could redefine labor and productivity across industries.
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