Nvidia (NASDAQ:NVDA) is expanding its focus beyond traditional AI applications to integrate artificial intelligence into real-world environments. CEO Jensen Huang recently highlighted the shift towards “physical AI,” a concept that moves beyond language-based AI models to systems capable of interacting with the physical world. This advancement has implications for industries such as robotics and autonomous transportation. At the same time, financial markets are reacting to the company’s earnings, reflecting both strong revenue growth and concerns over profit margins.
Nvidia has long been at the forefront of AI development, previously concentrating on agentic AI models that execute complex tasks autonomously. The company has now introduced Cosmos, a platform designed to simulate real-world environments for training AI models. This marks a progression from prior developments in AI that primarily focused on understanding and generating human language. Similar concepts have been explored by companies like World Labs, which has worked on integrating spatial intelligence into AI systems. With increasing competition in the AI sector, Nvidia’s expansion into physical AI aims to solidify its role in shaping future AI applications.
What Is Physical AI and How Does It Work?
Physical AI refers to AI systems that not only process information but also interact with real-world environments. These models must comprehend concepts such as friction, inertia, and object permanence. Nvidia’s Cosmos platform enables the simulation of realistic scenarios, allowing AI to be tested in virtual environments before deployment. This can be particularly useful for self-driving cars, which need to operate under diverse weather and road conditions, as well as for robotics companies looking to refine their products’ safety and efficiency.
Which Companies Are Using Nvidia’s Cosmos Platform?
Several companies have already integrated Cosmos into their research and development processes. Robotics firms such as 1X and Neura Robotics, along with autonomous vehicle makers like Waabi and Wayve, have adopted the platform. Additionally, Uber (NYSE:UBER) is exploring the use of Nvidia’s technology as it continues developments in the robotaxi sector.
“Just as language foundation models have revolutionized language AI, Cosmos is a physical AI to revolutionize robotics,” Nvidia’s CFO Colette Kress stated.
Despite Nvidia’s advancements in AI, financial markets have responded cautiously to the company’s earnings report. While quarterly revenue reached $39.3 billion, an increase of 78 percent from the previous year, and profit rose to $22 billion, concerns over the company’s gross margin outlook have influenced investor sentiment. Following the earnings announcement, Nvidia’s stock experienced a decline of over 3 percent.
“Someday, there will be 1 billion cars on the road, and every single one of those cars will be robotic cars,” Huang stated, emphasizing Nvidia’s long-term commitment to AI-driven transportation.
Nvidia’s move into physical AI represents a step towards integrating artificial intelligence into real-world scenarios, though this segment remains a small part of the company’s overall business. The automotive and robotics divisions generated less than 2 percent of Nvidia’s revenue in the last quarter, but expectations for future growth remain. Investors are weighing the company’s long-term AI ambitions against near-term financial performance, as concerns about profit margins persist. As AI technology continues to evolve, Nvidia’s ability to balance innovation with financial stability will be closely monitored by analysts and industry leaders.
