As robots dominate the spotlight at CES, Arm Holdings is repositioning itself to ride the next phase of AI-driven automation.

The chip technology firm has reorganised its business to create a dedicated “Physical AI” unit. This aims at expanding its presence in robotics and automotive technologies. Arm executives told Reuters the move reflects growing interest in humanoid and industrial robots across the tech and auto sectors.

Following the overhaul, Arm will operate three core segments: Cloud and AI, Edge—which includes mobile and PC products—and Physical AI. The new unit combines robotics and automotive businesses. Both rely on similar requirements such as power efficiency, safety, reliability, and sensor technology.

Arm does not manufacture chips but licenses its designs, which power most smartphones and an increasing number of laptops, data centre chips, vehicles, and robots. The company earns through licensing fees and royalties.

The focus on Physical AI is part of a broader growth push under CEO Rene Haas. The company sees robotics as a long-term opportunity to boost productivity and automate tasks across factories and warehouses. Several automakers and robotics firms, including Boston Dynamics, already use ARM’s technology.

CES this year has underscored the surge in interest around robots, with companies showcasing AI-powered machines for industrial and commercial use. Alongside Arm, firms such as Tesla, Nvidia, and Mobileye have also announced fresh initiatives. This signals that physical AI is emerging as a key frontier in the next wave of automation.

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