Good morning. Artificial intelligence is stepping out of the virtual world and into the real one — and that shift is called physical AI.
What does that mean? Instead of working only on computers or digital data, it enables machines to sense, think, and act in the real world. Physical AI was a key topic of discussion during a Fortune Brainstorm Tech dinner on Monday at CES 2026 in Las Vegas.
Andrew Nusca, editorial director of Fortune’s Brainstorm series and author of the Fortune Tech newsletter, hosted a fireside chat with Qualcomm President and CEO Cristiano Amon on the subject. Amon said he agreed with Nvidia CEO Jensen Huang’s prediction that physical AI will be the next major wave of artificial intelligence.
“It’s going to be massive,” Amon said. Physical AI is grounded in real-time sensor data. “You train on things that you see, things that you sense, things that you do,” he explained. This enables robots and self-driving cars, for example, to handle complex tasks, adapt to changing environments, and make split-second decisions while moving and interacting with the world around them.
Physical AI is emerging in automotive, Amon continued. When you think about assisted driving and autonomous driving, that’s a physical AI problem, he explained. You have sensors and cameras observing everything around you and telling the car where to go and when, he said. Qualcomm has transformed into a major automotive technology provider, positioning itself as a key player in the industry’s shift toward “software-defined vehicles.”
Qualcomm’s move into automotive was driven by the company’s recognition of increasing computing needs within vehicles—especially in processors for assisted driving, Amon explained. “You cannot put a server in the trunk of a car,” he said. It consumes too much power and takes away from the car’s energy, he added.
To meet those demands, Amon said, Qualcomm focused on creating power-efficient semiconductor designs capable of handling significant computing loads. Leveraging its consumer electronics experience, the company can integrate cameras, sensors, and connectivity features into a single piece of silicon—a design well-suited for modern vehicles.
“The same thing that made Qualcomm successful in automotive will make us successful in robotics,” Amon said. The conversation around physical AI, he added, naturally extends to robotics—and he believes its impact will go far beyond humanoid robots. At CES, Qualcomm announced a full suite of robotics technologies.
A 2026 tech trends report by Deloitte explores how AI and robotics are converging. “Robots powered by physical AI are no longer confined to research labs or factory floors,” the report states. “They’re inspecting power grids, assisting in surgery, navigating city streets, and working alongside humans in warehouses.”
According to Deloitte’s research, the industry, regulators, and potential adopters are working to eliminate barriers that slow large-scale deployment. As organizations overcome these challenges, AI-enabled robots are expected to move from niche applications to mainstream adoption.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Patti Kangwankij was appointed CFO of Marqeta, Inc. (NASDAQ: MQ), the modern card issuing platform, effective Feb. 9. Kangwankij will succeed Mike Milotich as CFO, who, as previously announced, was appointed Marqeta’s CEO in September 2025. Kangwankij joins Marqeta from real estate technology company Roofstock, where she serves as CFO. Before that, she was head of payments finance and strategy at Stripe. Kangwankij previously worked at JPMorgan Chase, starting in the investment bank, before serving as managing director and CFO for both the Co-Branded Credit Card and Merchant Services businesses during her nearly 15-year tenure.
Daniel Gabbay was appointed EVP and CFO of Healthcare Realty Trust Incorporated (NYSE: HR), effective Jan. 12. Since 2024, Gabbay served as a managing director in the Real Estate Investment Banking Group of RBC Capital Markets. Before RBC, he served as a managing director in the Real Estate Investment Banking Group at Barclays. During his nearly 20-year career in investment banking, Gabbay has provided advisory and capital markets services to clients across the real estate industry.
Big Deal
ADP released its latest national employment report on Wednesday. Private sector employment grew by 41,000 jobs in December, a reversal from November's losses, with gains led by health services/education and leisure/hospitality; however, it was slightly below expectations. Annual pay for job-stayers rose 4.4%.
"Small establishments recovered from November job losses with positive end-of-year hiring, even as large employers pulled back," Nela Richardson, chief economist at ADP, said in a statement.
The official government jobs report for December will be released on Friday.
Going deeper
"OpenAI launches ChatGPT Health in a push to become a hub for personal health data" is a Fortune article by Sharon Goldman
Goldman writes: "OpenAI announced the debut of ChatGPT Health — a dedicated experience inside ChatGPT where it says users can securely connect medical records and wellness apps such as Apple Health, Function, and MyFitnessPal to further personalize conversations. OpenAI said it would not train its models on personal medical data." You can read the complete article here.
Overheard
“The board unanimously determined that the Paramount’s latest offer remains inferior to our merger agreement with Netflix across multiple key areas.”
—Samuel A. Di Piazza Jr., chair of the Warner Bros. Discovery board of directors, said this in a statement on Wednesday about the board once again unanimously recommending that WBD stockholders reject the revised offer from Paramount Skydance announced on Dec. 22, and continuing to recommend that stockholders approve the deal with Netflix, Fortune reported.
