Chip designer Arm enters robotics with new 'Physical AI' division
08 Jan 2026

Chip technology giant Arm Holdings has announced the formation of a new unit, Physical AI, as part of its restructuring efforts. The move is aimed at bolstering its presence in the robotics sector.

The announcement was made during CES 2026, where humanoid robots were a major highlight.

The new division will be one of three main business areas for Arm, along with Cloud and AI as well as Edge (which includes mobile and PC products).

Arm's Physical AI unit to house automotive business
Business restructuring

The Physical AI unit will also include Arm's automotive business. This is because robotics and automobiles share a lot of common sensor technology and hardware.

Tesla and Hyundai, for example, are developing robots to automate tasks in warehouses and factories.

Arm's increased focus on Physical AI is part of a broader strategy to grow its business.

The UK-based firm sees robotics as a long-term growth market with huge potential.

Physical AI solutions could enhance labor, says Arm
Impact on GDP

Drew Henry, the head of Arm's new unit, told Reuters that Physical AI solutions could "fundamentally enhance labor, free up extra time." He also said they could have a significant impact on gross domestic product (GDP).

The division plans to hire dedicated robotics staff.

Ami Badani, Arm's Chief Marketing Officer, explained that automotive and robotics were combined into one unit due to similar customer requirements such as power constraints, safety and reliability.