AI Operating System…

This statement introduces 'Physical AI,' in which artificial intelligence extends beyond digital tasks to engage with the real world through robotics, autonomous systems, and sensors. It acts as an intelligent layer that manages physical processes across fields such as retail, logistics, manufacturing, healthcare, and daily life, much like an operating system for software.

This "AI-native hardware" can learn, adapt, and operate in complex environments, transforming industries and enabling enterprises to innovate and redefine business models. However, this new world warrants caution, calling for discussions on safety, ethics, and cybersecurity within organizations.

Contributing to an AI-centric 'Operating System' is possible but may cause unpredictable effects across organizational, operational, financial, competitive, and human domains.

How AI is transforming into the operating system of the physical world:

Embodied Intelligence: AI shifts from screen interfaces to physical forms, enabling robots, drones, and vehicles to perceive, reason, and operate in real time.

Real-world automation: Automates physical tasks across sectors like logistics (store and warehouse robotics), agriculture, food innovation, and agricultural engineering.

System-Level Integration: AI moves beyond standalone tools by connecting with physical systems to provide a comprehensive, intelligent automation orchestrator.

Bridging Digital & Physical: Physical AI connects digital data with actions, enabling adaptive responses in unpredictable environments. This transforms “jobs to be done” and creates new roles to boost organizational productivity.

Are they examples of success today? Yes, and many more to follow:

Manufacturing: In 2026, over 40% of manufacturers have upgraded to AI-driven production scheduling.

Retail: Stores will become locations where digital and physical experiences converge. "Agentic commerce" enables AI not only to recommend products but also to negotiate attention and curate individual shopping journeys in real time.

Automotive & Mobility: 2026 is a milestone year for autonomous driving; Mercedes-Benz plans to deploy Alpamayo-equipped vehicles on public roads by the end of the year.

Home & Construction: The "Zero Labor Home" vision (e.g., LG's CLOiD) uses physical AI to coordinate appliances for automated chores.

Key implications & challenges:

Potentially three core outcomes:

A significant boost in productivity: Supercharges human labor and creates new possibilities.

Introduces an entirely new dimension of cybersecurity: Centered on vulnerabilities and ethical concerns (privacy, safety).

Demands the development and implementation of the digitally transformed organization.

Strategy • Operations • Technology

Driving Impact. Scaling Performance.