Speaking at the World Economic Forum (WEF) in Davos in January 2026, Nvidia CEO Jensen Huang described AI robotics or “Physical AI” as a once-in-a-generation opportunity for Europe, urging the continent to capitalize on its industrial heritage to lead the next technological revolution. According to Huang, while the United States dominated the software era, Europe’s manufacturing excellence positions it uniquely to dominate the future of intelligent machines.
What Is Physical AI?
Huang defines Physical AI as the fusion of artificial intelligence with real-world machines, allowing robots, vehicles, factories, and industrial systems to perceive, reason, and act autonomously. Instead of AI living only on screens, it becomes embedded in physical infrastructure what Huang calls “building the brains for the bodies Europe already makes best.”
This shift is driven by what Huang described as the largest infrastructure buildout in human history, with trillions of dollars being invested globally into AI data centers, robotics systems, and automation platforms.
European Companies Leading the Charge
Huang highlighted several European industrial giants already embracing Physical AI:
- Siemens is partnering with Nvidia to build the world’s first fully AI-driven adaptive manufacturing site and expanding AI copilots for industrial automation.
- Mercedes-Benz is working with Nvidia’s DRIVE and Omniverse platforms to create software-defined vehicles and digital twins for factory optimization.
- Volvo is integrating Nvidia DRIVE AGX Thor, powered by Blackwell architecture, for future autonomous vehicles.
- Schaeffler is deploying robotics and automation initiatives to boost industrial productivity.
These companies represent how Europe can leapfrog the traditional software economy and move directly into intelligent manufacturing and robotics.
The Two Critical Bottlenecks
Despite the optimism, Huang warned that Europe faces major challenges:
- Energy Supply: Europe has some of the highest energy costs globally. Huang stressed that governments must dramatically expand energy generation to power AI data centers which he called “AI factories.”
- Sovereign AI: Europe must build and own its own AI models, datasets, and computing infrastructure rather than relying entirely on foreign platforms to protect industrial competitiveness and data security.
Global Competition Is Intensifying
Huang’s remarks come amid fierce global competition. Tesla CEO Elon Musk recently predicted that 80% of Tesla’s future value will come from its Optimus humanoid robots, while Google DeepMind released advanced robotics-focused AI models in 2025. Meanwhile, robotics companies raised a record $26.5 billion in funding in 2025, signaling massive investor confidence in physical automation.
Why This Matters for Europe
If Europe solves its energy and infrastructure challenges, Huang believes it can become the global leader in AI-powered manufacturing, robotics, and automation. As the world shifts from software intelligence to physical intelligence, Europe’s industrial roots could become its greatest technological advantage.
