The India-based consultancy behind a new study claims the report shows that manufacturers have scaled their AI investments so much that their focus has shifted from standalone automation to a larger physical AI ecosystem, meaning the kind of artificial intelligence that interacts with sensors and physical processes has gone “mainstream.”

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And more broadly, according to Mumbai-headquartered Tata Consultancy Services from its Future-Ready Manufacturing: TCS Physical AI Readiness Report, these manufacturers are using physical AI in people-first digital transformations, meaning that instead of the processes 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 plus AI operating model.”

TCS said their study surveyed C-suite-level people and VPs from 300 manufacturing companies across North America and Europe in March and April. Respondents included sectors such as automotive, electronics and high-tech manufacturing, industrial equipment and machinery, process industries, and aerospace and defense.

TCS is in partnership with Google Cloud and, in March, launched its Physical AI Gemini Experience Center in Troy, Michigan, which helps manufacturers explore, test, and scale physical AI use cases for safety, quality, and operational efficiency.

Some top-line findings from the new TCS report:

Respondents said their enterprises are preparing to scale physical AI. This will stretch across factories, warehouses, logistics networks, maintenance operations, and quality management environments.

Manufacturers are committing to long-term investment. No organization surveyed by TCS plans to reduce physical AI investment, while 26% plan to increase spending. They are preparing for longer value-realization timelines. This, according to TCS, underscores sustained transformation over short-term pilots.

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A high impact is expected in warehouse operations. Of the respondents, 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. Also of the respondents, 42% said they 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.

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“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,” said Anupam Singhal, president of manufacturing for TCS.

“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.”