The biggest unlock in physical AI is system-level intelligence—a heterogeneous mix of machines communicating and optimizing together, not just individual autonomous vehicles.
The speaker argues that the real value comes from connecting entire fleets of different machines (in a port, mine, or quarry) so they can communicate and optimize in real time, rather than just making individual vehicles autonomous. ✦ AI generated
Speaker 1 · a16z Podcast · 2026-07-21 · original ↗
starts at this moment · 7:05
The thing that we're not talking about is we're all talking about intelligence almost like within a system but the system level intelligence is where the unlock is and we're already doing work like that where you say hey let's take an entire port let's take an entire mind let's take an entire query and this heterogeneous mix of machines they're all can talk to each other.
verbatim transcript · starts at 7:05
7:05doing work like that where you say hey let's take an entire port let's take an entire mind let's take an entire query and this heterogeneous mix of machines they're all can talk to each other and they can optimize and be efficient when one machine goes down or one machine has an issue the rest of the mind doesn't have to stop when it's human-driven. event we don't even know the machine's
7:25going to go down because there's no analysis the human is not plugged into the core uh systems of the machine. So like a simple thing like knowing when a break system is going to break >> is actually huge because you can start preparing for it in advance. Oh this wear and tear is higher than in other mines. Just using an example but like the the other macro point is if you look
7:46at agriculture as an example you know average American farmers 58 years old the there's that the number something like under 35 it's like less than 10% of farmers are that young. So what's going to happen? the need for food growth is continuing to grow. The need for uh rare earth materials is contin so these these demands are only growing but the humans who are the bottleneck are decreasing.
8:09>> Trucking is the same way. Um and so you can you can really just unlock a lot more efficiency. So I mean one way to think maybe think about this is like imagine if the cost for food decreases because it's way way more efficient. What what's the downstream impact? the imagine for goods being transported let's say you know instead of a few dollars a mile it's 20 cents a mile and
8:33suddenly it's it's I think that the unlock is very very very big um and that isn't ne I think doesn't necessarily need for all the machines to be redesigned from the ground up >> right right got it makes sense and then maybe just one one more question would be just give give it give us a sense of parameterized like the scope and scale of a company today
8:48>> yeah uh uh north of a thousand engineers and those engineers are you know obviously the classic you know uh uh uh software and AI uh engineering teams, but we also have engineers who really know safety systems. Uh we also have engineers who really know hardware because the important thing that we we're kind of just uh tipping around stepping around is all this stuff is hard because it ultimately has to meet