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Tesla announced it will cease production of Model S and X cars to convert its Fremont factory into a robotics production facility. This shift emphasizes the rise of physical artificial intelligence (AI), which integrates AI into physical objects like self-driving cars and robots.

Notable examples include Tesla's Optimus and surgical robots like Da Vinci. Investment opportunities in physical AI include Nvidia's platforms, Alphabet's Waymo, and the newly launched WisdomTree Physical AI ETF, which focuses on key players in the sector.