AI vs Physical Technology: Why the Slowdown in Advancements? (2026)

The world is abuzz with the rapid advancements in artificial intelligence, but what about the physical realm? The divide between 'bits' and 'atoms' is a growing concern for many experts. While digital technologies like software, smartphones, and AI are progressing at an unprecedented pace, physical innovations, such as flying cars, household robots, and nuclear fusion, seem to be lagging behind. This disparity raises an important question: Is physical innovation slowing down while digital technology races ahead?

Personally, I think this is a fascinating and complex issue. The comparison between software and physical engineering is particularly intriguing. Hardware, as Dr. Sue Keay points out, is a challenging problem to solve. Building anything that interacts with the physical world requires careful design, manufacturing, testing, and certification, which cannot be achieved with a simple software update. In my opinion, this is why we are seeing a gap between the pace of digital and physical advancements.

One thing that immediately stands out is the importance of reliability in physical technologies. Robots that perform well in controlled laboratory settings may struggle in unpredictable real-world environments. This is a critical challenge that needs to be addressed before we can fully realize the potential of physical innovations. For example, while the cost of humanoid robots has decreased, safety concerns remain a significant barrier to their widespread adoption in homes.

What many people don't realize is that the pace of physical innovation is not necessarily slower, but rather different. Reusable rockets have dramatically reduced the cost of space travel, gene-editing tools have revolutionized biomedical research, and battery technology has steadily improved. However, these advancements often require significant investment and time to translate into everyday applications. In my view, this is why we are not seeing the same level of excitement and accessibility in physical technologies as we do in digital ones.

If you take a step back and think about it, the divide between 'bits' and 'atoms' is a reflection of the different timelines and challenges associated with each. Software and digital technologies can be rapidly developed and deployed, while physical innovations require a more deliberate and methodical approach. This raises a deeper question: How can we better align the pace and focus of digital and physical advancements to create a more cohesive and transformative future?

A detail that I find especially interesting is the role of investment in this debate. Business investment in machinery, equipment, and infrastructure is crucial for technological innovation. In Australia, for example, there has been a recent increase in spending on machinery and equipment, which is a positive sign. However, the country still faces challenges in translating research into large-scale manufacturing and globally dominant technology companies. This is a broader issue that needs to be addressed to ensure that physical innovations are not left behind.

In my opinion, the question of whether innovation has stopped is not as relevant as the question of how we can bridge the gap between digital and physical advancements. The excitement surrounding AI may be outpacing its economic impact, but that does not diminish its potential. The real challenge is to ensure that the benefits of AI and other digital breakthroughs are realized in the physical world, and that physical innovations are not left behind in the digital revolution.

AI vs Physical Technology: Why the Slowdown in Advancements? (2026)

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