What Is Physical AI? Nvidia Is the Stock I'd Buy to Own It.
Key PointsAuto industry customers spent around $8 billion on Nvidia's AI systems for their own facilities in a recent 12-month stretch.
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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