What Is Physical AI? Nvidia Is the Stock I'd Buy to Own It.
A rival chipmaker agreed last month to pay $8.2 billion in shares to push further into this area of AI.
Physical AI is the term Nvidia employs for artificial intelligence (AI) designed to operate in the real world, as opposed to on a screen. Envision software enabling a warehouse robot to grasp a box, or a vehicle navigating traffic. While a chatbot merely generates a response, physical AI must perceive its surroundings and decide upon a course of action.
Competitors are also interested. On September 28, Advanced Micro Devices (NASDAQ:AMD) announced its acquisition of World Labs, a startup specializing in AI models of 3D spaces and tools for training robots, in an all-stock transaction valued at approximately $8.2 billion. Nevertheless, for Nvidia, the realm of physical AI remains a modest segment within a vast corporation.
Automotive revenue for Nvidia amounted to roughly $2.35 billion over the 12 months ending late January 2026 (Nvidia's fiscal 2026), representing around 1% of its total revenue of $215.9 billion. Even Nvidia's broader physical AI figure, approximately $6 billion in fiscal 2026, constitutes less than 3% of sales.
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