Physical AI is the New Bet as Semiconductors Become the New Oil

India’s semiconductor ecosystem witnessed rapid growth over the past decade, aided by ample funding and government support for innovation. Taking its initiative a step further, the Union cabinet, in July, approved the Research, Development, and Innovation (RDI) scheme, which aims to scale up private sector participation in research and innovation across strategic and emerging domains.

The scheme, backed by a ₹1 lakh crore corpus, is poised to offer long-term financing or refinancing at low or nil interest rates. It is in these circumstances that MIPS, a leading supplier of AI and processor IP headquartered in the US, is staking its future in physical AI. 

Physical AI, also known as ‘generative physical AI,’ enables autonomous systems to perceive, understand, and perform complex actions in the real world.

In a recent conversation during his visit to India, MIPS chief executive Sameer Wasson told AIM: “Today, AI is used for photo sharing, food delivery, and hack placement. When we start talking about AI in terms of security, safety, autonomy and health, that’s the wave I’m interested in.”

‘The New Oil’

Wasson believes semiconductors have entered a defining moment and agrees with the analogy that terms them “the new oil,” essential for autonomy, robotics, and national security. MIPS, once a startup in RISC-V computing, is now moving faster after its recent acquisition by GlobalFoundries (GF).

The deal gives MIPS more credibility with customers who were hesitant to commit to a smaller player. “The boat is now big. You definitely have seemingly unlimited fuel and better ability to execute,” Wasson said.

Wasson said he does not see catalogue AI solutions as the future, and would rather compare those to one solution that fits everything. In contrast, the company’s approach is to focus on customisation. “Our DNA tends to be application-specific. We’re going to extend that to customisation for certain applications and then take it to the next level,” he said. 

Wasson’s view aligns with that of industry leaders. At Computex 2024, NVIDIA chief Jensen Huang said, “The next wave of AI is here. Robotics, powered by physical AI, will revolutionise industries.” He went further at GTC 2025: Robotics powered by physical AI could become the “largest industry of all.”

SiMa AI founder Krishna Rangasayee echoed the same message during his last visit to India, stating that physical AI will be the driver for India. His firm raised $85 million to expand across robotics, automotive, aerospace, healthcare and more.

Wasson insisted that MIPS is aligned with this shift. “The potential of what lies ahead of us in bringing AI to physical space is just extreme.” He sees robotics, drones and real-time control as near-term opportunities. “Everyone’s focusing on the AI in robots. We’re focusing on stabilising the robot,” he said.

Analog Devices India (ADI) sees itself firmly in the physical AI space: providing sensors, power management, and motor control that bridge digital AI and the physical world.

“ADI is actually in the physical world. Our chips are the interface between the digital world and the real world,” Vivek Tyagi, MD at ADI, told AIM. He pointed to others like GreyOrange and Addverb in warehouse automation as proof that India is already moving toward physical AI.

Plans for India

India features heavily in MIPS’ plans, both as a talent base and as a future market. “Nowhere else on the planet can you grow as rapidly as you can in India. This is not a cost statement. This is just about the talent available,” Wasson said.

Contrary to critics, he does not believe there is a shortage of skilled workers. “There is plenty of talent. The world’s best talent is abundantly available,” he argued, while stressing on the importance of fundamentals, as talent evolves on that foundation.

Silicon Labs senior vice-president Manish Kothari agreed with Wasson’s observation as he said that India should focus on building gradually. “As India’s end market explodes in scale, smart metering alone is adding nearly 100,000 new connections daily. The pull for local manufacturing will only grow,” he said in an exclusive interaction.

Kothari sees assembly and testing (OSAT) as the natural first step before large fabs. His firm has partnered with IIT Delhi, IIIT Hyderabad, and others to help bridge the gap between fundamentals and applied learning.

Starting Small

Wasson also takes a measured view of manufacturing. “Starting big with unsteady investment isn’t going to get us there. You have to start small and stay steady.”

Rajiv Mody, founder, CEO and CMD of Sasken Technologies, believes that the essence of building resilient technology companies lies in the depth of engineering and the willingness to take risks. He emphasised to AIM that while “semiconductors are the new oil,” fabs alone will not secure India’s future. 

Real competitiveness will come from strengthening design, IP creation, and analogue expertise, with tech transfer serving only as a temporary bridge rather than the final destination.

MIPS differentiates itself by targeting application-specific computing, rather than the general-purpose processors where Arm dominates. Networking, autonomy, and AI-driven infrastructure are its strongholds.

“If it’s a data-oriented problem and it’s application specific, we tend to perform,” Wasson said. The company aims to scale faster under GF’s ownership. “Our ambition is to be the number one viable alternative to Arm,” Wasson said. For him, semiconductors are not just about markets, but also about impact. “Our job is not done until we deliver something.”

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