Intel Is Joining Hands With Hitachi to Bring Physical AI to Life. It Needs to Bring the INTC Stock Valuation Down, Too.

Just as inference and agentic AI are rapidly becoming the next steps of the AI revolution, physical AI's day in the spotlight is also edging closer. In fact, one study by consulting firm PwC predicts that the physical AI market will grow to about $500 billion by 2030, with applications in healthcare, defense, mobility, and logistics, among others.

Amid its own newfound confidence, Intel (INTC) is looking to make a splash in this lucrative and rapidly growing market by partnering with a Japanese manufacturing legend in Hitachi (HTHIY). The duo has identified five strategic areas to focus on: foundry tools, quantum computing, energy optimization, custom silicon and edge-AI applications, and factory automation.