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Physical AI: The Next Frontier of Industrial Digitalization

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International Research Journal of Engineering and Technology (IRJET)

e-ISSN: 2395-0056

Volume: 12 Issue: 07 | Jul 2025

p-ISSN: 2395-0072

www.irjet.net

Physical AI: The Next Frontier of Industrial Digitalization Naresh Babu Goolla IMR Soft LLC., USA ----------------------------------------------------------------------------***--------------------------------------------------------------------------

Abstract Physical AI represents a transformative convergence of artificial intelligence with physical systems, heralding a new era in industrial digitalization. By seamlessly integrating AI capabilities with robotics, automation, and Internet of Things technologies, Physical AI creates intelligent systems that sense, learn, and act autonomously in real-world industrial environments. This integration enables unprecedented advances across manufacturing, logistics, energy, and other industrial sectors, fundamentally reimagining operational processes and business models. Despite implementation challenges, Physical AI offers compelling opportunities for organizations to enhance efficiency, resilience, and innovation capacity, positioning it as the definitive next frontier in the ongoing evolution of industrial digitalization.

Keywords: Industrial Digitalization, Physical AI, Intelligent Automation, Edge Computing, Cyber-Physical Systems. 1. Introduction to Physical AI 1.1 The Emergence of Embodied Intelligence Physical AI represents the culmination of multiple converging technologies, creating systems that bridge the digital-physical divide with unprecedented capabilities. This new paradigm transcends traditional automation by embedding intelligence directly within industrial infrastructure, enabling real-time sensing, analysis, and autonomous action. According to Citi Research's comprehensive analysis, the global market for Physical AI solutions reached $18.3 billion in 2023, with manufacturing and logistics sectors accounting for the largest adoption segments [1]. This integration creates what experts term "embodied intelligence"—AI systems that don't merely process information but physically interact with and manipulate their environments. The technological foundations established over the past decade have created fertile ground for these

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