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The takeaway: Physical AI is allegedly going to transform manufacturing once again. Arm CEO Rene Haas recently predicted that advanced robots powered by AI models will replace most human workers over the next few years. As for the ongoing issues with the global silicon supply chain? Haas suggested that we will simply have to learn to live with them.

Haas shared his views on the future of factory jobs in the age of agentic AI and robotics during the recent Brainstorm AI live event hosted by Fortune in San Francisco. The Arm executive is confident that human-shaped robots, powered by advanced AI systems, will take over most factory jobs within the next five to 10 years.

"I think in the next five years, you’re going to see large sections of factory work replaced by robots - and part of the reason for that is that these physical AI robots can be reprogrammed into different tasks," Haas stated during the event.

Physical AI is considered the next frontier of AI research applied to robots and other physical devices designed to mimic human workers. Nvidia explains that physical AI can give cameras, robots, self-driving cars, and other autonomous systems a much deeper "understanding" of the physical world. In theory, these systems can perceive, interpret, and act, performing complex tasks outside the virtual grid.

Automation already plays a major role in manufacturing. According to Haas, current robotics technology is still optimized for single-purpose tasks. Both hardware and software are built for specific workloads, which limits their ability to adapt easily to new jobs.

Thanks to physical AI, humanoid robots may eventually solve this limitation by "learning" what they need to do on the fly. Arm’s CEO envisions a factory environment where general-purpose robots can adapt to different tasks, allowing them to replace a significant portion of the human workforce that currently works alongside single-purpose robots.

Haas illustrated physical AI’s potential by pointing to autonomous taxi services. Waymo’s robo taxis still rely on extensive hardware systems, including radar, lidar, and multiple cameras. Over the next few years, he suggested, these hardware requirements may shrink as more advanced AI models take over, performing complex tasks with fewer sensory inputs.

Arm is currently designing SoCs and other silicon components used in many everyday devices. Haas noted that most people rely on 50 to 100 different Arm chips across their personal gadgets and home appliances, a testament to the efficiency and growing complexity of the technology. That same efficiency, he argued, could one day make humanoid robots capable factory workers in the not-too-distant future.

Haas was also asked about ongoing issues affecting major supply chains in the semiconductor industry, with market concentration being the most pressing. A handful of large corporations control critical resources, such as chip manufacturing (TSMC) and the production of silicon-etching machines (ASML). Haas’s proposed solution? The industry will simply need to learn to live with it.