Mumbai, India: Manufacturers are moving beyond AI pilots and beginning to integrate physical AI into real-world industrial operations, with warehouse automation emerging as one of the biggest transformation areas, according to a new report released by Tata Consultancy Services.
A growing number of manufacturers are preparing for a future where artificial intelligence is embedded directly into machines, robotics and factory operations rather than remaining confined to software systems. A new study from Tata Consultancy Services suggests that physical AI is rapidly gaining momentum across the manufacturing sector, although many companies are still in the early stages of adoption.
The Future-Ready Manufacturing: TCS Physical AI Readiness Report 2026 found that manufacturers increasingly view physical AI as a strategic priority as they look to improve productivity, resilience and operational efficiency. The study surveyed 300 manufacturing organisations across North America and Europe to assess how businesses are approaching AI-driven automation.
According to the report, warehouse operations are expected to experience some of the most significant changes, with 77% of manufacturers anticipating major transformation through physical AI technologies. Companies are also preparing to raise investments, with respondents indicating an average increase of 26% in spending related to physical AI initiatives.
Despite that momentum, large-scale deployment remains a work in progress. The report noted that 68% of manufacturers are still in the experimental phase, highlighting the gap between interest and full industrial implementation. Legacy infrastructure, integration challenges and governance concerns continue to slow broader adoption across production environments.
The findings indicate that manufacturers are increasingly viewing AI not just as a digital tool for analytics, but as a technology capable of directly interacting with physical environments through robotics, autonomous systems and intelligent equipment. As companies expand investment and move from pilot projects toward deployment, physical AI is expected to play a larger role in shaping the next phase of industrial transformation.
Source: This article is based on an official press release issued by TCS
TCS study reveals Physical AI is now mainstream as manufacturers scale AI implementation
