The Coming Revolution in Physical AI

Fresh from meetings with nearly 30 Silicon Valley experts, Xpeng Motors chairman He Xiaopeng sees artificial intelligence entering its most transformative phase yet - but not where most people expect. While chatbots dominate conversations, He believes physical AI - systems that operate in the real world - will drive the next wave of innovation.

From Screens to Streets

"We're still at ground zero," He observed about current AI development. "Digital applications like OpenAI's products represent just 0 to 0.1 on the maturity scale." The real action, he contends, will shift to autonomous vehicles and humanoid robots capable of interacting with physical environments.

Self-driving technology could leapfrog intermediate stages entirely. "Don't be surprised if we go straight from today's limited autonomy to near-full L4 capabilities," He predicted. Similarly, robotic abilities might advance several generations in just three years.

East vs West Approaches

The Xpeng CEO noticed striking differences between Chinese and American robotics strategies:

• Chinese firms typically start with hardware - perfecting joints, motors and control systems
• U.S. companies often prioritize software models first The divergence creates complementary strengths that could accelerate global progress.

"Humanoids will become trophy projects for tech giants," He suggested. "But specialized robots offer wide-open opportunities." From warehouse logistics to elder care, focused applications may prove more immediately practical than general-purpose androids.

AGI: Promise vs Reality

While excited about physical AI's potential, He tempers expectations about artificial general intelligence:

"Today's systems excel at imitation learning - copying what humans do," he explained. "True creativity requires understanding why we do things."

The missing pieces? Multimodal comprehension (processing sights, sounds and context together), continuous learning without forgetting prior knowledge, and long-term planning abilities. These breakthroughs remain years away despite recent hype.

Valuation Divide Reflects Different Priorities

The contrast between U.S. and Chinese tech investment reveals much about each market: | Market | Focus | Valuation Approach | |--------|-------|---------------------| | U.S. | Cutting-edge research | Premium pricing for potential | | China | Practical applications | More grounded in near-term uses |

The gap may narrow as physical AI matures. "Digital transformations happen fast," He noted. "But changing the physical world brings bigger impacts - it just takes longer."

Key Points:

• Physical AI (robotics, autonomous vehicles) poised for explosive growth
• Expect major leaps in capability within three years
• Humanoid robots will become status symbols for tech giants
• Specialized robotics offers better near-term business opportunities
• True artificial general intelligence remains distant despite hype