Two-thirds of organizations rate physical AI as a high priority for the next three to five years

79% of organizations are already engaging with physical AI[1], with 27% already deploying or scaling solutions
60% of executives believe that physical AI will enable robotics adoption in areas that were once impossible or impractical
43% of executives are interested in physical AI as an enabler of domestic production at scale

Paris, April 17, 2026 – The Capgemini Research Institute today published a report ‘Physical AI: Taking human-robot collaboration to the next level,’ which explores the impact of physical AI on robotics and the value it could unlock for businesses. Physical AI marks a shift in robotics from automation to autonomous action in the real world. The opportunity it represents is widely recognized by executives across sectors, from high tech (93%) to warehousing and logistics (69%) and agriculture (59%), as well as the globe: with nearly three quarters of executives in the US, and around two thirds in Europe, and APAC in agreement.

Moving from experimentation to business impact

Physical AI is at an inflection point as technological breakthroughs and market forces converge to accelerate real‑world deployment at scale. Advances in foundation models are equipping robots with the intelligence needed to operate autonomously in complex environments, while simulation technologies are compressing training cycles by enabling large‑scale learning.

An emerging AI‑robot‑data flywheel is reinforcing this progress, as deployed systems generate real‑world data that continuously improves performance and generalization. These gains are amplified by advances in edge computing[2] and batteries, falling hardware costs, new commercial models such as robotics‑as‑a‑service (RaaS), and connectivity breakthroughs including private 5G and precise wireless positioning.

The optimism is widespread, with 60% of executives saying that physical AI will enable robotics applications that were previously impossible or impractical. Use cases span hazardous operations, micro‑logistics, pick‑and‑place, and field inspection, as well as sector-specific applications such as dynamic assembly in manufacturing, healthcare and eldercare support in the public sector, and disaster-damage assessment in insurance.

Supporting reindustrialization and operational resilience

As reindustrialization efforts accelerate in Europe and the United States, physical AI is emerging as a key enabler of this transition. Indeed, 43% of executives say that reshoring and reindustrialization are increasingly driving their interest in physical AI as a means to support domestic production at scale, while two-thirds of organizations now rank physical AI as a high priority in their automation agenda for the next three to five years. More than half of business leaders cite autonomous mobile robots, industrial robotic arms and cobots as the fastest growing robot form factors in their organization in the next three to five years, well ahead of humanoids[3].

Workforce constraints are a central driver for the growing interest in physical AI. More than labor costs, the top driver of investment in physical AI is labor shortages , especially in the agriculture, retail, high tech, warehousing and logistics and automotive sectors. Geographically, Japan leads in prioritizing physical AI within automation strategies, with more than three quarters of executives identifying it as a priority over the next three to five years, ahead of the US.

Physical AI also supports the agility required to make reindustrialization viable over the long term. Nearly half of executives identify improved flexibility as a key benefit, highlighting the ability to reconfigure production systems and workflows more rapidly than with traditional robotics or fixed automation. Moreover, over half of executives highlight improvements in safety and reduced physical strain.

“Physical AI marks a shift from systems that describe the world to systems that can act within it. However, robotics has a long history of overpromising, as early breakthroughs created expectations the technology could not yet meet.” explains Pascal Brier, Chief Innovation Officer at Capgemini and Member of the Group Executive Committee. “What is different today is not the hype, but the convergence of AI, data, and engineering maturity. The opportunity is real, provided we focus on what works at scale. Deploying physical AI responsibly, safely, and progressively will be essential to building trust, with security by design, transparency, and human oversight at the core of sustainable human‑robot collaboration.”

Scaling physical AI and humanoid robots despite persisting barriers

Nearly two-thirds of executives expect physical AI to reach scale – in terms of moving from pilot projects to large-scale deployments – within the next five years, although only 4% say they are already operating at scale. In fact, scaling physical AI remains a challenge for nearly eight out of ten executives, primarly due to a lack of technology and operating readiness.

Near-term growth will be led by established robot form factors. Humanoid robots, despite strong interest, still face significant barriers and remain a longer-term bet: 72% of executives identified technical immaturity such as reliability and dexterity, while 63% were deterred by the high cost and 58% by the training challenges. In addition, more than six in ten executives are currently unclear on the ROI of humanoid adoption.

Societal acceptance is also a concern with more than six in ten executives believing that public resistance will be a critical obstacle to the adoption of humanoid robots. Public sentiment on this issue varies by region, with 68% of executives in France citing public resistance as a barrier compared with 56% in Spain.

To access the full report: https://www.capgemini.com/insights/research-library/ai-in-robotics/

Methodology of the report

In January and February 2026, the Capgemini Research Institute conducted a global survey of 1,678 executives from organizations with annual revenue above $1 billion, across 16 countries across North America, Europe, and Asia-Pacific and spanning 15 industries. For aerospace and defense as well as government and public services, the threshold was $500 million. Executives surveyed were director level and above.

About Capgemini

Capgemini is an AI-powered global business and technology transformation partner, delivering tangible business value. We imagine the future of organizations and make it real with AI, technology and people. With our strong heritage of nearly 60 years, we are a responsible and diverse group of over 420,000 team members in more than 50 countries. We deliver end-to-end services and solutions with our deep industry expertise and strong partner ecosystem, leveraging our capabilities across strategy, technology, design, engineering and business operations. The Group reported 2025 global revenues of €22.5 billion.

Make it real | www.capgemini.com

About the Capgemini Research Institute

The Capgemini Research Institute is Capgemini’s in-house think-tank on all things digital. The Institute publishes research on the impact of digital technologies on large traditional businesses. The team draws on the worldwide network of Capgemini experts and works closely with academic and technology partners. The Institute has dedicated research centers in India, Singapore, the United Kingdom and the United States. It was ranked #1 in the world for the quality of its research by independent analysts for six consecutive times – an industry first.

Visit us at https://www.capgemini.com/researchinstitute/

[1]Physical AI represents the next major evolutionary stage in AI: AI that acts in the physical world. Robotics is among its most significant applications.

[2] Edge computing means processing data where it is created, such as directly on a robot, instead of sending it to a remote data center.

[3] In this report, humanoids refer to robots with human‑like form factors, including both full‑humanoid robots (with torso, head, two arms, and two legs) and human‑like robots that share some human features but may differ in structure (e.g., wheels instead of legs, fewer limbs, or simplified body plans).

Source link

Stephan Dorsey

Stephan is the sports journalist for the Maple Grove Report.

Subscribe to Our Newsletter

Get our latest articles delivered straight to your inbox. No spam, we promise.

Renee Good's widow seeks return of SUV

Can the IRS Ignore Your Request for an Estate Tax Valuation Explanation? – Houston Tax Attorneys

April 26, 2026

Conflicts and Technology Risk News — “Matters” Matter to Mediator Conflicts, Lawyer Program Involvement and Witness Status Creates Conflict Call and DQ Motion, LegalTech Ice Reputation Risk, AI Hallucinations in the Sky with Diamonds

April 24, 2026

Conflicts — Considering Conflicts Check Responsibilities, Plaintiff Relationships Create Conflicts Call for DQ Motion,

April 23, 2026

Can the IRS Collect When the IRS Owes the Taxpayer? – Houston Tax Attorneys

Can the IRS Ignore Your Request for an Estate Tax Valuation Explanation? – Houston Tax Attorneys

April 26, 2026

Conflicts and Technology Risk News — “Matters” Matter to Mediator Conflicts, Lawyer Program Involvement and Witness Status Creates Conflict Call and DQ Motion, LegalTech Ice Reputation Risk, AI Hallucinations in the Sky with Diamonds

April 24, 2026

Conflicts — Considering Conflicts Check Responsibilities, Plaintiff Relationships Create Conflicts Call for DQ Motion,

April 23, 2026

These Vizio TV Settings Can Make Your TV Look Even Better

Can the IRS Ignore Your Request for an Estate Tax Valuation Explanation? – Houston Tax Attorneys

April 26, 2026

Conflicts and Technology Risk News — “Matters” Matter to Mediator Conflicts, Lawyer Program Involvement and Witness Status Creates Conflict Call and DQ Motion, LegalTech Ice Reputation Risk, AI Hallucinations in the Sky with Diamonds

April 24, 2026

Conflicts — Considering Conflicts Check Responsibilities, Plaintiff Relationships Create Conflicts Call for DQ Motion,

April 23, 2026

Recent Reviews

Can the IRS Collect When the IRS Owes the Taxpayer? – Houston Tax Attorneys

The federal tax system provides various procedural safeguards to protect taxpayers while ensuring efficient tax collection. These protections become particularly important when taxpayers face immediate collection actions while simultaneously pursuing tax credits or refunds that could eliminate their tax debt.

Many businesses have recently found themselves in this situation after filing amended returns to claim COVID-relief tax credits. In these employee retention tax credit cases, the IRS owes the taxpayer for several tax periods, but the taxpayer may owes the IRS these or other tax periods. The question arises: can taxpayers prevent the IRS from collecting while their credit claims are being processed? What if the IRS is just inept and doesn’t do its assigned job function to process the tax returns showing the credits? Should that play into this issue to the taxpayer’s detriment?

The recent case of Peoplease, LLC v. Commissioner, T.C. Memo. 2025-21, provides an opportunity to consider this situation.

Facts & Procedural History

The taxpayer in this case owed employment tax liabilities for Form 941 taxes for the quarterly tax period ending December 31, 2021. By late 2023, their outstanding liability had grown to over $11.2 million. After receiving notices about their unpaid tax debts, the IRS moved forward with collection actions by issuing a Final Notice of Intent to Levy.

The taxpayer responded by requesting a hearing through the IRS Office of Appeals, where their tax attorney explained they had submitted Form 941-X claiming the Employee Retention Tax Credit. When investigating this claim, the Appeals Officer discovered additional documentation was needed. Despite multiple requests for this information through the tax litigation process, the taxpayer never responded, ultimately leading to a determination sustaining the levy action.

Collection Due Process Rights Under Section 6330

Section 6330 of the tax code establishes the foundation for taxpayer rights during collections. This section requires the IRS to notify taxpayers of their right to a hearing before proceeding with levy actions. The statute outlines specific requirements about notification timing, hearing procedures, and permissible issues that can be raised during these proceedings.

Taxpayers who owe back taxes to the IRS understand all too well that these hearings serve as a critical checkpoint in the collection process. While these hearings can provide a remedy in some circumstances, they are not a complete remedy. The code specifically details what issues may be raised, including appropriateness of collection actions, collection alternatives, and challenges to the underlying liability in certain circumstances.

Limitations on Tax Court Authority in Collection Cases

When taxpayers pursue tax litigation involving collection disputes, they must understand the boundaries of Tax Court jurisdiction. The court’s authority stems directly from Section 6330(d), which provides specific parameters for reviewing collection determinations. This is particularly important when it comes to tax attributes, such as tax credits, from other periods.

The tax code establishes strict requirements for claiming and verifying tax credits. These requirements are particularly important when taxpayers attempt to use pending credit claims to affect ongoing collection actions. Understanding how the IRS processes credit claims helps explain why unprocessed claims cannot halt collection activities.

The Employee Retention Credit and Jurisdiction

The Employee Retention Credit presents a unique challenge in CDP cases. The Tax Court in Peoplease addressed this issue head-on, making two critical determinations about ERTC claims in the collection context.

First, the court emphasized that it lacks jurisdiction in CDP cases to determine overpayments or credits from other tax periods. This jurisdictional limitation means that even if a taxpayer has potentially valid ERTC claims for other quarters that might satisfy the liability under collection, these claims cannot prevent current collection action.

Second, and perhaps more importantly, the court held that unprocessed credit claims do not constitute “available credits” that can be considered in determining whether a tax liability remains unpaid. The taxpayer had argued that its submitted ERTC claims for other quarters would ultimately resolve the liability at issue. However, the court rejected this argument, holding that mere claims for credit – even substantial ones – cannot be used to challenge the appropriateness of collection actions. This aligns with the longstanding principle from Weber v. Commissioner that potential future credits or refunds cannot serve as a basis for halting current collections.

What this misses is that the IRS is, admittedly, not processing ERTC claims. It has a statutory obligation to do so, but has administratively decided not to fulfill its delegated government obligation to process these returns. So unfortunately, with the tax court holding, the answer is that the IRS apparently can simply refuse to follow the law that requires it to process tax returns, and at the same time pursue taxpayers for collections in other periods even when the net balance is actually owed to the taxpayer and not the IRS.

The Takeaway

This case explains that taxpayers cannot rely on unprocessed credit claims, even potentially substantial ones, to prevent IRS collection actions. This principle applies broadly to all types of credit claims, including the Employee Retention Tax Credit–but it is particularly problematic for ERTCs. This does not mean that the extension of time that the CDP hearing provides is not helpful. But for taxpayers facing collection while awaiting credit processing, pursuing immediate collection alternatives may provide a more achievable remedy given this case.