Physical

• South Korea is launching a $10.3 billion financing initiative to accelerate the development of "physical AI" sectors. • The government has selected a subsea cable expansion project by LS Cable as the first initiative to receive support under this plan. • This push aims to integrate AI into manufacturing and industrial infrastructure to enhance national competitiveness in the global tech landscape.

• Japan has launched a major AI initiative, committing up to JPY 1 trillion (approximately US$6.2 billion) to develop a domestic AI foundation model. • The project will be led by a consortium headed by SoftBank, with a specific strategic focus on achieving leadership in "physical AI." • This investment aims to reduce Japan's technological dependence on the US and China while enhancing the nation's global manufacturing competitiveness.

• Japan has selected Noetra Corp., a new firm backed by multiple companies, to lead a "physical artificial intelligence" project. • The Japanese industry ministry will provide approximately 1 trillion yen ($6.2 billion) in government support for development outsourcing over the next five years. • Funding for the project is scheduled to begin with 387.3 billion yen allocated for fiscal 2026.

• SNS Telecom & IT reports that the private 5G market is projected to reach $6.6 billion, driven by the integration of "Physical AI" and mission-critical network requirements. • The growth is fueled by a shift from legacy systems, such as the GSM R railway networks, toward the 5G-based Future Railway Mobile Communication System (FRMCS). • This transition is significant as it moves private cellular networks from fringe solutions to core infrastructure capable of supporting high-reliability industrial automation and AI.

• GlobalFoundries is expanding its Singapore operations to serve as a primary hub for "physical AI" hardware, focusing on robotics, autonomous systems, and AI-driven infrastructure. • The chipmaker is increasing its investment in manufacturing capacity and developing next-generation semiconductor technologies to support these emerging fields. • This strategic shift aims to capture the growing demand for specialized chips that bridge the gap between digital AI and physical machinery.

• The Physical AI market is projected to experience massive growth, potentially expanding 16X by 2035 as artificial intelligence shifts from digital software to physical applications. • This transition involves integrating AI into hardware, driving a "trillion-dollar revolution" through advancements in robotics, autonomous systems, and smart infrastructure. • The trend is significant because it moves AI beyond virtual assistants and into real-world environments, enabling more complex physical interactions and automation.

• Tokio Marine Kiln has warned that Asia-Pacific manufacturers face a significant "damage gap" where cyber-attacks on industrial systems may result in uninsured physical losses. • The risk stems from a structural mismatch between traditional property insurance and cyber policies, leaving production lines and supply chains vulnerable to uncovered damages. • This issue is critical because the Asia-Pacific region has a high concentration of manufacturing risk, yet insurance protections for cyber-related physical damage have not kept pace.