Physical AI is becoming the next major inflection point in AI, as machine intelligence moves beyond cloud data centers and into robotics, industrial automation and other embedded systems that operate in the real world.

That shift is reshaping how chipmakers think about ecosystem investment, not just product roadmaps. Advanced Micro Devices Inc. has built out a three-layer strategy of organic research, acquisitions and ecosystem investing to compete in the AI infrastructure market, according to Sagi Paz (pictured), head of AMD Ventures at Advanced Micro Devices Inc.

“AI is team sports, so there are many different layers across the stack,” Paz said. “Whenever we have companies that AMD is uniquely positioned to add value to, that’s where we get excited about making investments. Each investment needs to stand on its own — it needs to be a very credible company, great team, differentiated product, big market. But having the angle in which AMD can provide unique value is where it gets us really excited.”

Paz spoke with theCUBE’s Dave Vellante and John Furrier at AMD Advancing AI 2026, during an exclusive broadcast on theCUBE, SiliconANGLE Media’s livestreaming studio. They discussed AMD Ventures’ investment thesis, portfolio construction and the rise of physical AI. (* Disclosure below.)

AMD Ventures targets physical AI as the next white space

AMD Ventures stays stage-agnostic, writing checks from $1 million up to tens of millions of dollars depending on engagement level and how much a company is raising, Paz explained. The firm takes observer rather than board seats in roughly half its portfolio to avoid fiduciary conflicts while maintaining close dialogue, he added. Paz pointed to an underexplored category tied to industrial robotics and embedded AI deployment as the area where founders should focus next.

“Definitely physical AI is something that is still out there,” Paz said. “You don’t have any company that is actually deploying at scale, but that is going to be the next inflection point. I do believe there’s going to be a ChatGPT moment for physical AI, and everyone’s going to recognize the value you can drive from that type of innovation.”

Stay tuned for the complete video interview, part of SiliconANGLE’s and theCUBE’s coverage of AMD Advancing AI 2026.

(* Disclosure: TheCUBE is a paid media partner for AMD Advancing AI 2026. Sponsors of theCUBE’s event coverage do not have editorial control over content on theCUBE or SiliconANGLE.)

Photo: SiliconANGLE