Forget about large language models and chatbots, Physical AI is where the action will be for the next few years – everything from humanoid robots to kitchen appliances… and self-driving vehicles. A long time ago, I used to attend the Consumer Electronics Show (CES) in Las Vegas every year.
I was living in LA at the time and was involved with various companies that were producing hardware and content at the intersection of tech and entertainment. It was great fun, but mainly restricted to games, toys and gadgetry. The CES has grown into the most important venue to show hot-off-the-press, breakthrough consumer innovations across every field imaginable – all fuelled by advanced tech, including AI.
This is the stuff that will soon end up on neighbourhood shelves, showroom floors and in virtual stores, replete with prices, return policies, customer support, terms and conditions and fancy packaging. CES 2026 has just been held in Las Vegas. This year’s event sprawled across more than 2.5 million net square feet of exhibit space, hosting more than 4,000 exhibitors and attracting an estimated 140,000 industry professionals and sometimes overwhelmed buyers from 150 countries.
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Like most years, the show has attracted its own buzzword: “Physical AI.” (To be fair, the term has been in common use within AI for some time, but the consumer power of the CES drops it loudly into the centre of the public sphere). Things that use AI to operate and move in physical space are all the rage, from humanoid robots to kitchen appliances to toys to… autonomous vehicles.
It is this last sector that deserves some unpacking, largely because it is a raging battlefield with no victor yet in sight. First, we need to back up. Self-driving vehicles have long been a dream, going back as far as Da Vinci (sort of – it was a sketch of a programmable spring-powered cart).
This was followed much later by plans and prototypes in pretty much every decade of the 20th century. In the early 2000s, the US military (Defense Advanced Research Projects Agency, DARPA) realised that academic and corporate progress was stalling. So they launched a series of desert and urban races that became the “Big Bang” of modern AV technology.
While Elon Musk and Tesla have received most of the headlines since, the first serious AV attempt was cloaked in secrecy. It was Google, and it was 2009. The first public reveal was in 2010, and in 2016 the AV team was spun out as Waymo – now an independent Google-owned company and considered the leader in the field by most analysts.
Musk first made mention of his AV aspirations in 2013 and went into full gear with his development programme for a driverless Tesla in 2016, right around the time that Waymo spun out. That’s the potted history of the field. We leap forward to CES 2026 and the landscape is completely different, partially due to the arrival (unsurprisingly) of several Chinese entrants.
It’s a noisy and sparkling mess. Innovation after innovation. An embarrassment of riches, perhaps.
Hyperbolic claims. Lots of flash and gloss and bluster. Also, some real on-the-road successes.
And while many of these vehicles have reached “Level 4” (truly driverless in extensively mapped and constrained urban areas like Waymo/Phoenix, or on freeways), no one has yet reached “Level 5” (driverless anywhere, anytime, under any conditions), which has been optimistically promised by some for 2026. But wait, there’s more. Korea-based Hyundai recently acquired humanoid robot maker Boston Dynamics and is now talking to Nvidia about their AV aspirations.
And China! I won’t even try to go too deep into the bustling crowd, some of whom were on display at the CES; the feature list is too long. A list of the major AV car manufacturers in China will give the gist: Geely, BYD, Xiaomi, Huawei, Pony, WeRide and presumably others that no one in the West has heard of.
Finally, the keynote address from Jensen Huang of Nvidia, who, while commenting enviously on the goldmine of data owned by Tesla, also announced Nvidia’s “Alpamayo”. It is a major new market for the company. It represents their move from providing just the “hardware” and “low-level software” for cars to offering a full “Physical AI” ecosystem that teaches vehicles to think and reason like humans. Huang described Alpamayo as the “ChatGPT moment for physical AI”, where machines transition from just reacting to their environment to actually understanding and reasoning through it.
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