An exploration of the next steps for AI as it moves beyond chat
“AI IS MOVING FROM SCREENS to the machines,” says Martyn Briggs, director, Thematic Investing, BofA Global Research. “It might be a robot, a car, a drone, essentially bringing that intelligence into the real world.”
As artificial intelligence (AI) rapidly evolves, its impact is expanding far beyond chatbots and digital applications. A new phase is emerging — one where AI moves into the physical world, powering machines, vehicles, logistics and industrial systems.
This shift is driving a surge in infrastructure investment and innovation, as companies and countries race to build the foundation that will support AI at scale. From semiconductors and data centers to transportation networks and autonomous systems, the implications are broad and increasingly tangible.
“We are witnessing the application of AI begin to drive profound advances across the economic landscape,” says Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank.
Watch the video above to understand how quickly physical AI is developing and how it could drive the next phase of economic growth and potential investment opportunity. In it, Hyzy is joined by a trio of BofA Global Research analysts: Martyn Briggs on the broader expansion into the physical world, Ken Hoexter on the impact on transportation and Vivek Arya on how semiconductors and infrastructure tie it all together. Together, they explore how AI is transitioning from software into the physical economy — the risks as well as potential opportunities — and what it could mean for markets, industries and investors.
For example, investment in humanoids, or robots, has grown 5 times in 7 years1, says Briggs. “The hardware is getting cheaper; we could move from 20,000 humanoids manufactured last year to maybe a million by the end of the decade and even 10 million in 2035.”
For more AI-related insights, watch Market Decode: How to add AI to your portfolio. AI Investment Opportunities: Industries Affected by AI.
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1 The Humanoid Guide, data as of 2/5/26.
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