Ottawa, Nov. 25, 2025 (GLOBE NEWSWIRE) — The global physical AI market was valued at USD 4.12 billion in 2024 and is projected to reach around USD 61.19 billion by 2034, reflecting a remarkable compound annual growth rate (CAGR) of 31.26%, according to a recent study published by Towards Healthcare, a sister firm of Precedence Research. The significant growth in this sector is largely attributed to rapid advancements in robotics, embodied intelligence, and sensor-rich AI systems, which are driving unprecedented automation across healthcare, manufacturing, and logistics.
The robust demand for physical AI solutions is transforming how businesses operate, allowing for improved accuracy, efficiency, and safety. This shift is not just theoretical; as AI algorithms are increasingly integrated with sensors, actuators, and robotics, physical AI is evolving from experimental technology to a commonplace operational tool.
In 2024, North America led the market, capturing 41.30% of the revenue, while the Asia-Pacific region is anticipated to experience the fastest growth over the next decade. The market’s expansion is further fueled by the rising implementation of AI-enabled robotic surgery systems, which emphasize minimally invasive methods that enhance precision and lead to better patient outcomes.
As technological capabilities advance—particularly in areas such as reinforcement learning, computer vision, and lidar—machines are becoming more adept at reading complex environments and acting autonomously. This evolution is creating substantial opportunities across various industries, including manufacturing and logistics, where automation is increasingly necessary to address labor shortages and improve productivity.
The demand for physical AI is not only driven by technological capability but also supported by government investments and policy initiatives aimed at fostering innovation. Public sector initiatives across North America, Europe, and Asia are accelerating funding and resources to enhance the development and deployment of physical AI technologies.
By 2025, the market is expected to grow to USD 5.41 billion, with projections indicating a substantial increase to USD 61.19 billion by 2034. Notably, the surgical robots segment, specifically robotic-assisted surgery systems, dominated the market in 2024 and is likely to continue its upward trajectory due to increasing adoption rates and advancements in surgical precision.
One of the most significant challenges facing the market is the high cost of investment and maintenance associated with these advanced robotic systems. The financial burden can deter smaller hospitals and mid-sized companies from adopting these technologies, compounded by a shortage of skilled professionals able to operate, program, and maintain these complex systems.
In the context of rehabilitation and physiotherapy, the adoption of AI-powered exoskeletons and wearable robots is gaining traction. These technologies are revolutionizing how rehabilitation programs are designed, enabling more personalized and data-driven approaches to patient recovery. The increasing prevalence of chronic conditions and mobility barriers is driving demand for such innovations.
Regionally, North America remains the largest market, largely due to the early adoption of surgical robots and smart manufacturing technologies. The presence of major companies and a favorable regulatory environment in the U.S. has bolstered the growth of the physical AI sector. Meanwhile, Asia-Pacific countries such as China, Japan, and India are rapidly advancing their physical AI capabilities in both industrial and healthcare contexts, supported by strong government initiatives.
China, in particular, is pushing for increased automation in its healthcare sector, with hospitals investing in robotic surgery systems to enhance service quality and address rising healthcare demands. The government’s focus on policies like “smart factory” and “Made in China 2025” is also fostering innovation and reducing barriers to adoption, enabling smaller healthcare facilities to acquire advanced technologies.
As physical AI continues to evolve, significant trends are emerging, including the integration of AI into embodied systems that allow robots to learn and adapt in real-time. The deployment of sophisticated perception sensors is also creating new possibilities for interaction in complex environments, particularly in healthcare, where AI-enabled surgical platforms are becoming increasingly common.
Overall, the physical AI market is on a trajectory of rapid growth, driven by technological innovations, increasing demand for automation, and supportive government policies. As these trends unfold, the sector is poised to contribute significantly to advancements across multiple industries, fundamentally changing operational paradigms and enhancing patient care.
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