A new report from Deloitte shows how physical AI (PAI), the combination of artificial intelligence with physical machines, is quickly moving from testing phases to widespread implementation across industries.
The report, titled “Physical AI: The moment of acceleration,” highlighted industrial robotics as a key area where this technology is proving its value, and how early adopters in manufacturing and logistics are building the foundations needed to scale these systems across the value chain.
According to the Deloitte paper, while only 5% of companies report that PAI is currently transforming their organisation, a much larger portion (41%) expect it will do so within the next three years.
Similarly, only 3% of businesses have fully integrated PAI into their operations today, but this number is expected to reach 18% within two years.
The report pointed to a steady growth in the adoption of PAI among businesses worldwide. In 2024 alone, more than 500,000 industrial robots were deployed, with annual installations projected to reach 700,000 by 2028.
Collaborative robots, or machines designed to work alongside humans, made up nearly 65,000 of these installations in 2024.
In a media statement released today, Chris Lewin, AI lead for Deloitte Asia Pacific, emphasised the significance of this shift. “Physical AI marks the moment when intelligence moves off the screen and into the real world, transforming factories into learning systems that sense, decide and improve continuously. Organisations that are acting now will shape the operating models, skills and standards that define industrial leadership for the next decade.”
In its report, Deloitte identified several barriers to adoption, including cost and resource requirements (41%), challenges identifying use cases (36%), talent and skills gaps (33%), and technology or data availability (31%).
Adoption rates are projected to be highest in consumer goods, healthcare, telecommunications and industrial sectors.
The tech company stressed that successful PAI implementation requires more than installing technology.
“There are internal readiness factors that determine how effectively businesses can deploy and scale any PAI solution, today or tomorrow and critically, they are in the organisation’s control. Successful PAI implementation is as much about adapting as it is adopting,” Lewin said.
The report suggests three key questions for business leaders: Where are you on the technology maturity ladder? How ready are your operational fundamentals for PAI? And how are you shaping your human architecture for PAI?
To read Deloitte’s full report, click here.
