Capgemini Research Institute, the research division of the Capgemini, has published the report Physical AI: Taking human-robot collaboration to the next level, examining how advances in artificial intelligence are shaping robotics and the potential business value that may result.
The report describes physical AI as a transition from traditional automation towards systems capable of autonomous action in real-world environments.
According to the institute, this opportunity is widely recognised across industries, with high levels of interest reported in sectors such as high technology, warehousing and logistics, and agriculture, alongside broad regional agreement among executives in the United States, Europe and Asia-Pacific.
Capgemini Research Institute states that physical AI is moving beyond early experimentation towards tangible business outcomes, supported by a convergence of technological progress and market demand. The organisation notes that developments in foundation models are enabling robots to operate with greater independence in complex settings, while simulation technologies are reducing the time required for training by allowing large-scale virtual learning.
It further highlights the emergence of a feedback loop in which deployed systems generate data that improves performance over time. This progress is supported, according to the institute, by advances in edge computing, battery technology, declining hardware costs, new commercial approaches such as robotics-as-a-service, and improvements in connectivity including private 5G networks and precise wireless positioning.
The report from Capgemini Research Institute indicates that a majority of executives believe physical AI will enable applications that were previously impractical. Examples cited include hazardous operations, micro-logistics, pick-and-place tasks and field inspections, alongside more specialised uses such as adaptive assembly in manufacturing, support functions in healthcare and eldercare, and damage assessment in the insurance sector.
According to Capgemini Research Institute, physical AI is also becoming relevant to reindustrialisation strategies in Europe and the United States.
The organisation reports that a growing proportion of executives view reshoring efforts as a factor driving interest in physical AI, with many organisations identifying it as a priority within their automation plans over the next three to five years.
The institute notes that established robotic systems, including autonomous mobile robots, industrial robotic arms and collaborative robots, are expected to see the strongest growth in the near term.
Workforce constraints are identified as a key driver, particularly labour shortages across sectors such as agriculture, retail, high technology, logistics and automotive manufacturing. The report also suggests that physical AI may contribute to greater operational flexibility, enabling faster reconfiguration of production systems, while also improving safety and reducing physical strain on workers.
Capgemini Research Institute reports that while many executives expect physical AI to reach wider deployment within the next five years, relatively few organisations have achieved large-scale implementation to date. The institute identifies ongoing challenges, including limitations in technological and operational readiness, which continue to constrain scaling efforts.
It adds that although there is interest in humanoid robots, their adoption is likely to remain longer term due to concerns around technical maturity, cost and training complexity, as well as uncertainty regarding return on investment.
The report from Capgemini Research Institute also points to societal considerations, noting that public acceptance may influence the pace of adoption. It highlights regional variation in sentiment, with differing levels of perceived resistance across European markets.
“Physical AI marks a shift from systems that describe the world to systems that can act within it. However, robotics has a long history of overpromising, as early breakthroughs created expectations the technology could not yet meet.” said Pascal Brier, Chief Innovation Officer at Capgemini and Member of the Group Executive Committee.
“What is different today is not the hype, but the convergence of AI, data, and engineering maturity. The opportunity is real, provided we focus on what works at scale. Deploying physical AI responsibly, safely, and progressively will be essential to building trust, with security by design, transparency, and human oversight at the core of sustainable human-robot collaboration.”
