TCS study reveals Physical AI is now mainstream as manufacturers scale AI implementation

The report reveals that as manufacturers increase their AI investments, the focus is shifting from standalone automation projects to larger physical AI ecosystems. It highlights that companies see physical AI as a people-first transformation. Instead of replacing the workforce, manufacturers are using intelligent systems to help employees work more safely, efficiently, and productively while supporting workforce redeployment where needed in a Human + AI Operating model.

The report also highlights how enterprises are preparing to scale physical AI across factories, warehouses, logistics networks, maintenance operations, and quality management environments. It provides insights into the strategies, challenges, and opportunities involved in adopting physical AI at scale. The study builds on TCS’ partnership with Google Cloud, following the March 2026 launch of the TCS Physical AI Gemini Experience Center in Troy, Michigan. The center helps manufacturers explore, test, and scale physical AI use cases for safety, quality, and operational efficiency with intelligence at the core.

The study surveyed CXOs and vice presidents from 300 manufacturing companies across North America and Europe between March and April 2026. Respondents represented sectors such as automotive, electronics and high-tech manufacturing, industrial equipment and machinery, process industries, and aerospace and defense.

Key findings from the study include:

Manufacturers are committing to long-term investment: No surveyed organization plans to reduce Physical AI investment, while 26% plan to increase spending. Manufacturers are preparing for longer value-realization timelines, underscoring sustained transformation over short-term pilots.

High impact expected in warehouse operations: 77% anticipate significant or transformational impact, followed by assembly and manufacturing operations at 75% and logistics and material movement at 72%.

Human-centric transformation is taking shape: 42% of manufacturers expect significant workforce augmentation through Physical AI by improving safety and supporting workers in complex, hazardous, or repetitive industrial environments.

Early-stage adoption, clear roadmap to scale: 68% of manufacturers remain in non-deployment or experimental stages, with legacy system integration, data infrastructure, and workforce skills identified as the primary paths to enterprise-scale deployment.

Governance is the next frontier: 44% report unclear or no formal accountability structure for Physical AI failures, and 40% are unprepared for emerging regulatory requirements, signaling where manufacturers should focus as deployment accelerates.

Anupam Singhal, President, Manufacturing, TCS, said, “Physical AI is taking intelligence beyond the screen and onto the shop floor, where machines sense, adapt and act in real time. The manufacturers that scale it successfully will define the next era of manufacturing. TCS’ ‘infrastructure to intelligence’ approach positions them to lead that transformation. With all the manufacturers in our study planning to either maintain or increase the investment, the direction is clear: towards more resilient, adaptive, and future-ready manufacturing enterprises.”

Kevin Ichhpurani, President, Global Partner Ecosystem, Google Cloud, said, “Physical AI is moving manufacturing from digital insight to autonomous real-world action. Through our partnership with TCS, we are bringing Gemini’s multimodal reasoning to the factory floor, enabling robots and systems to operate safely and intelligently in complex industrial environments.”