Chip design leader Arm Holdings Plc has launched a new division focused on Physical AI, targeting the development of semiconductors for advanced robotics and intelligent vehicles. This announcement was made at CES 2026, a major tech trade event in Las Vegas, which featured an array of robotic innovations across various sectors.
Presented at the trade show, numerous companies showcased robots designed for diverse applications, including warehouse operations, automotive manufacturing, restroom sanitation, and even gaming at poker tables. According to Reuters, Arm is separating its Physical AI unit from its Edge division, which centers on mobile device chipsets. The new division will also prioritize chip development for automotive technologies.
The decision to consolidate robotics and automotive chip design stems from their shared reliance on similar technologies, sensors, power management, and safety protocols. Although Arm does not engage in chip manufacturing, it excels in providing architectural designs and intellectual property that empower other firms to produce the majority of chips utilized in smartphones, laptops, and data centers. Revenue is generated primarily through licensing agreements and royalties.
Under the leadership of Chief Executive Rene Haas, who took the helm four years ago, Arm is shifting its business model towards offering more comprehensive chip designs, aiming to increase its earnings. Additionally, there are discussions about the possibility of developing its own complete chips for the first time.
Drew Henry, Executive Vice President of Physical AI, will lead the division, emphasizing the transformative potential of robotics to enhance labor and productivity. He expressed confidence that robotics could contribute significantly to the GDP growth of adopting nations, though he refrained from naming specific clients. Nonetheless, it’s known that Boston Dynamics, a prominent robotics firm previously owned by Google and now under Hyundai Motor Group’s umbrella, utilizes Arm’s chip designs in its products.
Boston Dynamics made headlines at CES with its new humanoid robot, Atlas, designed for autonomous industrial tasks. Standing at six feet three inches and weighing around 200 pounds, Atlas is already in production, with Hyundai as one of its first customers, utilizing the robots in its Savannah, Georgia vehicle manufacturing plant.
The tech industry is increasingly focused on the intersection of artificial intelligence and robotics, believing that enhanced AI capabilities can elevate robots to operate efficiently alongside human workers in various sectors. In a related development, Mobileye Global Inc., partially owned by Intel, announced its acquisition of Mentee Robotics Ltd. for $900 million. Similarly, Nvidia introduced Alpamayo 1, an open-source AI model at CES, aimed at enhancing navigation systems for autonomous vehicles.
