Arm Creates ‘Physical AI’ Unit, Joining Tech and Auto Push Into Robotics
Published January 8, 2026
Chip technology firm Arm Holdings has reorganized to establish a new “Physical AI” business unit, aiming to expand its role in the robotics market, company executives told Reuters at the CES trade show in Las Vegas. The move comes as robots are a major theme at this year’s event.
Arm’s decision to form a robotics-focused unit coincides with a flurry of humanoid robot announcements at CES. Companies large and small demonstrated robots designed for tasks like building cars, cleaning toilets, and dealing cards, albeit slowly.
Reuters is first to report the creation of Arm’s Physical AI unit and the reorganization. The company will now operate three main lines of business: Cloud and AI; Edge, which includes mobile devices and PC products; and Physical AI, which will house its automotive business.
Robots and automobiles form the core of physical AI and share extensive existing sensor technology and other hardware. Automakers, including Tesla, are developing robots to automate warehouse and factory work.
UK-based Arm does not manufacture chips itself but supplies the foundational technology for most of the world’s smartphones and a growing array of other devices like laptops and data center chips. It earns revenue through licensing fees and royalties when its designs are used.
The expanded focus on Physical AI is part of a broader effort to grow the business. Since CEO Rene Haas took over roughly four years ago, Arm has developed methods to increase prices for its latest technology and is considering designing its own full chips.
Arm executives view robotics as a market with significant long-term growth potential. Drew Henry, head of the new unit, told Reuters that physical AI solutions could “fundamentally enhance labor, free up extra time” and may considerably impact gross domestic product as a result. The division plans to add staff dedicated to robotics, according to Arm Chief Marketing Officer Ami Badani.
The company combined automotive and robotics into one unit because customer requirements for factors like power constraints, safety, and reliability are similar, Badani said. Several automakers are also moving into humanoid robotics.
When asked about customers, Henry told Reuters, “We work with everyone.” Arm-based chips are used by dozens of automakers globally and by robotics companies such as Boston Dynamics, which is owned by Hyundai.
Hyundai and Boston Dynamics recently unveiled a production-ready Atlas humanoid robot that the Korean automaker said it will begin deploying in U.S. factories by 2028.
