While the AI revolution depicted in movies showcasing a world of robots during everyday tasks for humans, physical AI sees the tech integrated directly into physical machines, enabling them to perceive reason and act within the real physical world in real time, and primary applications include humanoid robots, autonomous vehicles, and smart drones.
Currently, the global robotics market size stands at around $80 billion, According to Mordor Intelligence. Now, industrial robots hold the major revenue share at around 71%. While collaborative robots or bots represent the fastest growing segment, with an expected compound annual growth rate above 25%.
Well, joining me here at the New York Stock Exchange to break down the growing world of physical AI, is Matt Chang, CEO at Chang Robotics, an engineering and tech deployment firm. Matt, great to have you here. Thank you so much for joining me.
Hi, Remy. Great to be here.
Well, when we think about artificial intelligence, for most people out there in terms of consumers, they're used to seeing it on the screen. But we all know with the advent of robotics, humanoid robotics in particular, as well as autonomous vehicles, we are seeing it in the real world. So explain physical AI to us.
Yeah, physical AI is really just putting machine learning into robots. So back in the original days of robots, when you might have seen them in a car plant, for example, they were linear programing. So you tell the robot what to do and it repeats the same task. The promise of physical AI is that the robot can look at its environment, or since its environment, and then interpret what it's supposed to do next.
Yeah. So speaking of which, we know that there are a lot of fictional movies out there about what will actually happen when it comes to humanoid robots, but how do we get from point A to point B? And right now there are some thought leaders who are concerned about this. Should we be?
Yeah. I don't think there's any reason to be concerned from where I sit. Progress is happening and it's happening slowly. And I think that slowness is what's going to help people adapt to living in a world where they work with robots or see robots on a daily basis. Uh, some people do. Some people show up to work every day and work with robots right now.
So what? The key thing to understand is the world is so vast, and the humans are so capable that as robots start to do human like tasks, they're going to do it in very narrow niche verticals. So one example might be robotic surgery has really exploded, right. Um, another example might be performing certain functions that happen in a factory or warehouse, but it's going to be very narrow, and you're not going to see a robot that can do everything a human can do for a long time.
Yeah. So we shouldn't be concerned about a dystopian future involving humanoids.
No. Absolutely not. I don't see that.
Well, of course, when it comes down to it, it's also about ROI for organizations who are working and investing in this space. But also there's a question surrounding labor productivity. So if you have to dispel some of the myths out there and separate the noise and signal, what do you see in the future?
So what I see is that robots, the biggest opportunity that robotics and robotics systems add to America is that it's going to enable us to compete with the world on a labor basis. So what we need is really one American worker that's overseeing ten or even 100 robots on a factory floor, for example, because then we have the same cost basis or cheaper cost basis than China or some of our global competitors.
Um, what I don't think you're going to see is a replacement of humans. The reality is we already have a tight labor supply chain as it is today, and we don't have enough of the critical labor that it takes to make things like skilled trades and factory operators. So what we have to do is we have to take the existing workforce we have, and we have to be able to stretch it and do more, which means we need to give those operators the technology they need, like robots to go do more work?
Yeah, and it's no surprise that when it comes to artificial intelligence, in particular physical AI, there are concerns about national security and investment. So give us an idea of what your vision is as you move forward.
We're very big into privacy. That's probably the number one thing. Everything we do is on a cyber secure basis in a data privacy basis. So what we don't believe in is installing robots, which we do. We do co bots, we do autonomous robots. We do any type of robot you could imagine. But what we don't believe is that that information should then be sent away from your home or from your factory site to another company's data center where they store it, repackage that information, and perhaps sell that data model to another company.
We think companies and households deserve to own their data and have sovereignty over that.
Yeah. So expanding on that, what is the vision for your company?
Well, our goal is to always build one more factory for America, and we won't stop until we've built every factory in America. So our goal is to scale aggressively with this industrialization wave, which we're already doing, and then to just leave it so that America is the most competitive manufacturing location on Earth.
And so if there was any company that wants to produce products, we don't want them choosing between the US and a foreign market. We want them seeing the US as the most desirable place to establish their manufacturing operation.
Yeah. So you mentioned a key word there and that is opportunity. So when we're looking at the AI ecosystem, there are still many areas of opportunity. And we don't know how this is going to shake out say 5 or 10 years from now. So when it comes to investment, what areas do you think you're seeing under investment in right now?
Y yeah, the biggest area for investment for us is to install the base infrastructure. And the reality is most of our facilities in America, whether it be e-commerce or manufacturing or healthcare in hospitals, they don't have the base infrastructure to have data to even install AI and have it be meaningful.
So what we want to do is we want to get every customer of ours equipped with the base infrastructure of digital intelligence. So we have good data collection. That means that as the AI models are evolving, we can continue to upgrade them to the latest models. So they have the latest and greatest.
Yeah. And for retail investors out there who are watching right now and they are focused on the AI trade, which sectors within the ecosystem to actually invest in. What would you say to them when they're looking for opportunity and returns on their investment?
What they need to focus on is going very narrow into a niche, because right now the large AI companies, first, they're very highly valued and they're kind of maybe over invested already. But one of the things is they don't really have the cash flow in the real profits to show that they might ever be profitable.
So what what I think makes the most sense is to look for AI that works in a very narrow vertical or a regulated vertical, such as healthcare. Environmental would be two good examples, because there's a lot of regulations that you'd need to have a practitioner install the AI so they understand the regulatory environment.
And there you can be profitable and it can really move the needle fast for the economy.
Yeah. And finally, Matt, before I let you go, you mentioned some industries there. And of course, we're looking at robotics for surgery as well as other applications. But what industries do you think will be transformed beyond our imagination as we move forward?
Well, the autonomous vehicles are here. We you probably talk about it a lot on this show. They're there already around us with Tesla and Waymo and some of the other companies. So that's happening on the city streets. I think the next place is in our heavy industry. I think we because we're underinvested in American industry, we haven't made the automation leaps that we need to to be at parity with the rest of the world, but this is our chance.
As we do that, let's surpass everyone else and let's have best in class robotic systems enabled by AI.
Well, Matt, it was a pleasure having you on the show. Thank you so much for joining me today here at the New York Stock Exchange.
Thanks for being.
