Agentic And Physical AI — A Multitrillion Dollar Economy Emerges

For centuries, human innovation has been driven by a singular pursuit: to augment our physical strength. From harnessing the power of animals to the industrial revolution’s embrace of coal and steam, we have relentlessly sought to replace human muscles with machines. But 2025 marks a profound inflection point. The focus now shifts from amplifying our physical capabilities to augmenting our cognitive abilities.

Nvidia CEO Jensen Huang’s bold proclamation at CES 2025 – that AI agents represent a multi-trillion dollar opportunity – has reverberated across the business world.

The age of agentic AI has arrived. Spanning the virtual and physical realms, we stand at a pivotal moment where human ingenuity will be amplified by intelligent machines. This convergence of agentic AI, intelligent software agents capable of independent learning. actions and tasks, with physical AI, encompassing robots and machines interacting with the physical world, is poised to fundamentally reshape the global economic landscape.

The Rise of Intelligent Agents: Transforming Work and Life

The impact of agentic AI extends far beyond simple work tools automation. These intelligent agents are going to transform how we work, live, and interact with the world around us.

• Workplace Transformation: Multiple industry forecasts, corroborated by extensive research across sectors, predict that AI agents will automate up to 70% of office work tasks within the next decade. This transformative shift promises to significantly enhance productivity and efficiency while fundamentally redefining the nature of work. While a significant portion of roles could be automated, most will evolve to prioritize nuanced, creative, and critical thinking skills. This transition will likely emphasize human strengths such as relationship-building, trust-building, and cultivating deeper emotional intelligence. Interestingly, by automating routine tasks, AI agents may inadvertently foster stronger human connections and encourage us to prioritize these uniquely human qualities in our interactions.
• Democratizing Access: The rise of AI agents will democratize expertise to anyone how can access it. Due to it’s multi-modal format (text, picture, audio, video) anyone, regardless of their digital proficiency will be able to converse and access the wealth of knowledge that comes with an agent app on your smart phone or desktop. Small businesses and individuals will gain access to powerful AI tools and resources previously available only to large corporations. This democratization of knowledge will foster innovation and empower entrepreneurship on an unprecedented scale.
• The Agent Economy: We are entering a new era where individuals and businesses will interact with and manage (or, for some be managed by) a network of AI agents. These intelligent assistants will handle routine tasks, administrative duties, and project setup, freeing people to focus on higher-level functions such as creative thinking, building relationships, and fostering trust in business development. This shift marks the emergence of an agent economy where AI augments human capabilities, driving innovation across all sectors.

Physical AI: Bridging the Digital and Physical Worlds

The power of agentic AI extends beyond the digital realm, seamlessly integrating with the physical world to unlock new frontiers in automation and efficiency, offering multi-trillion dollar opportunities in industries from transportation to healthcare:

• Autonomous Systems: For several years, self-driving vehicles have been slowly making progress from research and development to pilot projects and programs. Not all have made it, and most have been stopped due to financial and computer power limitations. However, this year marks a turning point, with companies like Waymo leading the world on the path to commercialization with almost 200,000 weekly paid trips in it’s robotaxi ridehail service. Autonomous drones for delivery and support services are on track to begin scaling, and robotic assembly and collaborative support systems are being introduced into every part of the economy. All three will scale over this next decade. These robotic agents will be powered by sophisticated AI algorithms that are emerging in key sectors like transportation, logistics, and manufacturing
• Smart Cities and Regions: AI-powered infrastructure, encompassing smart grids, intelligent traffic management systems, and predictive maintenance for utilities, will optimize urban and surrounding regional resource allocation where more than half of the world lives today. Furthermore, these AI systems will enhance the prediction of stress points, enabling proactive emergency preparedness in the face of increasing extreme weather events. For example, tools like Firesat, developed by Google’s AI teams, can detect wildfires as small as a classroom with high-resolution updates every 20 minutes, providing critical information to agencies and residents for timely action.
• Healthcare Advancements: From robotic surgery systems to AI-powered diagnostic tools, physical AI is poised to dramatically change healthcare delivery. This transformative technology is being applied to adjacent industries and is poised to alleviate current healthcare system bottlenecks, enhancing transparency and efficiency while simultaneously improving patient outcomes and expanding access to quality care.

Unforeseen Opportunities: The Hidden Economies of Agentic AI

While the impact on traditional industries is well-documented, the true potential of agentic AI lies in unlocking “hidden economies” that have yet to be fully explored.

• Predictive Weather Modeling and Disaster Response: AI agents can analyze vast datasets of weather patterns, climate models, and real-time sensor data to predict and mitigate the impact of natural disasters. This can lead to more effective disaster response, improved infrastructure resilience, and reduced economic losses. Insurance companies, public agencies and local governments will come to utilize this technology more and more to make the hard decisions about rebuilding or retreating from extreme weather prone areas.
• Personalized Travel Experiences: AI-powered travel agents can curate personalized travel itineraries, anticipate traveler needs, and provide real-time assistance along the entire customer journey from door-to-door, enhancing the travel experience and boosting tourism revenue.
• Precision Agriculture: AI agents can optimize agricultural practices and systems by analyzing vast data sets from soil conditions, weather patterns, and crop health data. Combined with local farmer knowledge and indigenous practices, regions can manage more sustainable yields, reduce costly external inputs and minimize resource consumption. These practices can also be utilized at the local level for improved food access and security.

The Road Ahead: Navigating the Challenges and Embracing the Future

While we are still in the early stages of this AI revolution, 2025 marks a significant inflection point. Although I’ve tested and reviewed over a dozen AI agents across various industries (take a look at Do Browser), and while they’ve made significant progress compared to a year ago, they are still in their infancy and have limitations. That’s ok, it means that today’s versions represent their least capable state. Similar to how early mobile apps evolved rapidly, AI agents will undergo significant improvements with each update, and newer, more advanced agents will emerge, surpassing their predecessors. This rapid evolution will create even greater utility for business customers.

I believe that from this year onward, we will begin to witness a rapid acceleration in the development and deployment of agentic AI and physical AI systems across various sectors. This rapid evolution will undoubtedly bring about both excitement and apprehension. As with any emerging technology, progress will not be linear. There will be setbacks, unexpected challenges, and initial implementations that may fall short of expectations.

However, history has shown us that transformative technologies, from the radio and television to the internet and smartphones, have consistently reshaped our world in ways we could not have initially imagined. New industries emerged, new roles were created, and while some jobs became obsolete, new opportunities arose. This decade will be defined by the rise of AI, and it is crucial to approach this transition with a curious and open mindset and a critical perspective, embracing the potential while proactively addressing the challenges.

The rise of agentic AI and physical AI presents both unprecedented opportunities and significant challenges. The future of work, business, and society is inextricably linked to the advancement of these technologies. By embracing these technologies responsibly and strategically, focusing on ethical development, investing in workforce training, and establishing robust regulatory frameworks, we can unlock a future of unprecedented prosperity, innovation, and human potential. This journey will require continuous adaptation, collaboration, and a commitment to ensuring that the benefits of AI are shared equitably across society.