Technology is advancing unprecedentedly, and physical AI seems to be the next leap forward. That’s right, physical AI is going to be an incremental moment for mankind, where intelligent machines will have the ability to interact and manipulate their environment. Manifesting in robots and machines, these advanced systems can analyze their surroundings, use data to make decisions, and even physically interact with the world around them.
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This makes robotics makers, auto suppliers, and specialty semiconductor companies the next big winners in AI. While it initially started with search bots, technology is now moving to agentic AI, such as research assistants and customer service representatives. Naturally, the next focus is going to be technology that can interact with the physical world and act independently through artificial intelligence. According to analysts, this is where all the “big money” is going to be.
“As you go into 2025, agentic AI is that next inflection point here before you hit that physical AI moment … like with everything else in the world, you have to crawl before you can walk and then run. Gen AI hasn’t really seen much monetization thus far. So when you start thinking about agentic AI and robotics and what have you, there’s a real kind of belief out there — and expectation. You’ll see those use cases start to come about this year”.
-CFRA senior equity analyst Angelo Zino.
According to CNBC, Wall Street anticipates realistic AI-enabled agent applications to start appearing this year. Innovations in physical AI could begin coming out later, most likely beginning with self-driving cars.
Physical AI has created “an additional leg to the stool” to the AI build-out phase. “There’s an additional driver now that augments what’s going on today and AI broadly”.
-Goldman Sachs analyst Toshiya Hari.
According to CEO Jensen Huang, “the ChatGPT moment for general robotics is just around the corner”. He said that the company anticipates enabling the development of three key robots in the coming years: agentic agents, self-driving vehicles, and humanoid robots. In this respect, he has also introduced Nvidia’s Cosmos platform for companies looking to train and develop physical AI systems. According to a recent Nvidia press release, the Cosmos platform can generate physics-based videos from several inputs, like video, image text, as well as robot sensor and motion data.
Here is what Oppenheimer analyst Colin Rusch thinks about Physical AI:
“We see physical AI as a nascent interdisciplinary field poised to transform the industrial complex through increased asset productivity and labor efficiency. We see outsized investment return potential in sensing, sensor fusion, compute hardware & software architecture, connectivity, controls, and AI training strategies”.
-Oppenheimer analyst Colin Rusch
All in all, analysts believe AI is going to be a multi-trillion-dollar Total Addressable Market opportunity, particularly on the physical side of things.
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10. Datasea Inc. (NASDAQ:DTSS)
Datasea Inc. (NASDAQ:DTSS) is a software company offering innovative products and solutions in acoustic high-tech and 5G-AI multimodal digitalization. On January 6, the company announced a major milestone related to its acoustic high-tech business. It revealed that the company has signed agreements with 14 beauty industry service and management companies, such as Tianjin Chuangfukang Consulting Service Co., Ltd. and Tianjin Haideci Technology Co., Ltd. The agreements will allow Datasea Inc. to introduce its acoustic high-tech products in 263 beauty salons and body care stores across China, as well as offer its 5G AI Digital Beauty System to partnered stores. The company aims to sell 140,000 acoustic high-tech products by the calendar year-end of 2025. The acoustic products included are acoustic air sterilizers, sleep products, and the Company’s 5G AI Digital Service System specifically developed for beauty industry stores. The 5G AI Digital System will also enable Datasea to provide independent technical services to these stores.
“We are both pleased and excited to announce these partnerships with multiple beauty salons and body care retail stores in northern China. With these new partnerships, we believe we are strategically positioned to market our acoustic high-tech products and advance the adoption of our Digital System for Beauty industry, which opens up a new sales channel for our products. We expect the new cooperation agreements to contribute a total of approximately 140,000 units in sales of acoustic high-tech products by the end of 2025, potentially driving the sales of the Company’s acoustic high-tech products to over $11.0 million (Approximately RMB 77 million) in 2025. Over the next 2-5 years, we plan to further expand our customer channel to up to 10,000 beauty and body care stores, covering provinces in Tianjin, Hebei, Beijing and Inner Mongolia”.
– Ms. Zhixin Liu, CEO of Datasea