Artificial intelligence (AI) is often seen primarily as software that analyses data or generates text and images. However, AI is already taking its next big leap: learning to operate in the physical realm. Physical AI represents a new research field, which differs significantly from previous industrial automation, conventional robotics, and software-based AI.
What is physical AI?
“The robotics, sensors, machines, and software of physical AI can collaboratively react to the physical environment and learn from it. This is a step forward compared to traditional industrial automation, which performs pre-programmed, repetitive tasks. Physical AI systems can adjust and perform flexibly in various situations,” describes Vesa Korhonen, junior researcher at LUT Business School.
- Physical AI refers to systems where artificial intelligence is integrated with robotics, sensors, and mechanics.
- In addition to calculations and forecasts, physical AI observes its surroundings, makes decisions, and executes them through concrete tasks: moving, grabbing, collecting, and reacting to changing situations.
Finland well-positioned to utilise physical AI
People largely perceive AI as technology for knowledge work and the service industry, but the economy and well-being in Finland rely mainly on the industrial sector. International reports forecast that the development of physical AI will transform manufacturing, logistics, and maintenance services in the future. It could become one of the competitive advantages for Finnish industrial companies.
“Finland is well-positioned to utilise physical AI. We have strong technical expertise and traditions in machinery and equipment manufacturing, high-quality maintenance business, a trust-based work culture, and a great deal of production that requires flexibility and high quality instead of mass volumes,” says Industry Professor Mika Ruokonen.
Physical AI can also help companies that struggle to automate complex, varying, or custom and small-batch production improve their productivity and efficiency significantly in the future.
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Companies closely involved in physical AI development
Physical AI can enable more flexible production, higher quality, safer working conditions, and faster adaptation to changing circumstances in industrial enterprises. The role of humans will shift from heavy labour and repetitive, hazardous tasks to monitoring, problem-solving, system control, and collaboration with intelligent machines.
“If Finns perceive AI merely as a phenomenon related to digital applications or knowledge work, the risk is that the next industrial revolution will take place somewhere else. That’s why it’s essential that companies actively engage in the development of physical AI, and we’ve received funding for it from the TT foundation,” says Korhonen.
An LUT Business School project from 2026 to 2027 will examine physical AI. The study will explore the market potential, growth strategies, competitive advantages, investment planning, and organisational change related to physical AI. Funding for the project is provided by the Teollisuuden ja Työnantajain keskusliitto (TT) foundation. Industry partners include KONE Oyj, AMD Silo AI Oy, Kemppi Oy, Kempower Oyj, Halton Group and Oilon Oy.
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Mika Ruokonen
