Arm Pushes Beyond Smartphones With New 'Physical AI' Unit, Tying Robotics To The Next Wave Of AI Growth

Arm Holdings (NASDAQ:ARM) is reorganizing its business to create a new "Physical AI" division, signaling a deeper push into robotics and automotive technology as humanoid robots dominate the spotlight at CES 2026.

Arm Reorganizes To Focus On Robots And Cars

Chip design firm Arm Holdings has launched a new business unit called Physical AI, aimed at expanding its footprint in robotics and automotive markets, company executives told Reuters.

The move reflects growing industry interest in AI systems that interact with the physical world rather than operating solely in software or the cloud.

As part of the reorganization, Arm will now operate three core divisions: Cloud and AI, Edge—which includes mobile devices and PCs—and Physical AI, which will house both its automotive and robotics efforts, the report noted.

Why Robotics And Automotive Are A Natural Fit

Arm executives said robots and vehicles share many of the same technical requirements, including power efficiency, safety, reliability and advanced sensor integration.

Those similarities prompted the company to combine automotive and robotics under a single umbrella.

Several automakers, including Tesla Inc. (NASDAQ:TSLA), are increasingly exploring humanoid robots for factory and warehouse automation.

CES 2026 Highlights A Surging Robotics Race

This year's CES has been dominated by humanoid robots, with dozens of companies showcasing machines that can sort items, perform factory tasks or interact with people—albeit often at slow speeds.

Industry leaders such as Nvidia Corp (NASDAQ:NVDA), Tesla, Boston Dynamics and Mobileye are all investing heavily in physical AI.

Price Action: Arm shares closed Wednesday at $115.68, up 0.13% and edged higher in after-hours trading to $115.75, according to Benzinga Pro.

According to Benzinga Edge Rankings, Arm's price trend is negative across short, medium and long term. Click here to see how it compares to companies like Tesla and Nvidia.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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