Over the last decade, innovation has moved in clear waves. First came fire.
Maybe we should start a little closer to now.
Typewriters. Then technology and software sped up and out came electronic typewriters. For the kids in the back, these were machines that could “remember” enough to let you type ahead of the print head. A hop, skip, and jump later, software got to a point where we had household computers. Bet you wanted one of those Apple iMacs with their Blueberry, Lime, and Tangerine candy colors. You clearly see where we’re going with this.
Lately, we’ve seen software explode…in all ways, shapes, and forms. Honestly, it would be a disservice to your intelligence to write a sentence about how “transformational” AI is.
And right when things are moving out of the uncanny valley, the cycle is bringing us back to hardware. Yes, it’s becoming increasingly obvious that hardware is returning as the interface people care about most. Software remains the engine—the soul you can say—while its impact shows up through physical, tangible experiences.
You can see that shift showing up in the market. Per recent estimates,the Edge AI Hardware market is projected to grow from $26.14 billion in 2025 to $58.90 billion by 2030. And IDC forecasts AI PCs will account for nearly 60% of all PC shipments by 2027.
We saw it clearly at CES and Davos, and we see it every day in our work with firms like Qualcomm: AI has moved beyond discussion and superficial demos into experiences people can interact with, move through, and respond to. That means the “box” the AI is in matters.
Qualcomm CEO Cristiano Amon framed it this way for the Wall Street Journal at Davos: “AI is changing computers. The [AI] software will always find its most efficient computer, no matter what."
The technology is still maturing. Companies are experimenting, and results vary. The direction, however, is clear: innovation is becoming physical again.
Why people are drawn to hands-on experience
When it comes to emerging technology, belief comes from use. From trying to trip the robot, you could say.
Everyone knows people respond most strongly when they can put their hands on something. Touch it, feel it, see it (hopefully) working. Physical engagement removes the need for persuasion. The value becomes obvious because it’s experienced directly. Doing becomes believing.
This is where usefulness matters more than novelty. Technology sticks when it clearly helps in everyday life. That pattern holds beyond demos or conventions and reflects how people adopt technology in the real world: when comprehension and value meet, the belief follows.
Why companies are lagging behind
But we’re still a ways off from this playing out completely effectively.
Many companies fall behind due to a fundamental mismatch: hardware and software move on different timelines. AI evolves at lightning speed, while hardware is designed, manufactured, and shipped over years. By the time a device reaches the market, the intelligence layer it relies on may already be different.
“Hardware manufacturers are caught in an impossible position: their innovation cycles move at geological speed compared to AI's evolution, yet they're being forced to choose whether to become mere vessels for Google, OpenAI, or Apple's intelligence layers, or to fight a losing battle for software relevance they can't win alone,” said Yann Caloghiris, Exec. Director of Creative, Strategy, and Innovation.
That gap shows up in the products people experience. Incremental upgrades with slightly faster performance or marginal improvements feel increasingly interchangeable. (We’re looking at you, iPhone.) Software advances motivate hardware upgrades only when they translate into clear, hands-on value.
This places hardware manufacturers in a difficult position. They must choose between embedding external intelligence layers from companies racing to own the consumer interface, or competing for software relevance in a world with a million competitors leagues ahead of them.
What actually moves the industry forward
According to our founder and CEO Sarah Mehler, the way forward requires more than faster hardware or smarter software—it requires systems thinking. The organizations gaining ground are moving beyond treating AI as a feature layered onto existing workflows and instead designing for collective intelligence: the intentional choreography of human creativity, judgment, and cultural insight with machine speed, scale, and pattern recognition. When those systems are sequenced deliberately, AI stops being an add-on and becomes a force multiplier for how decisions are made, products are built, and value is created.
This shift requires leaders to think less about components and more about connection. Human intuition and ethical reasoning form one system. Machine intelligence forms another. Real progress happens when those systems move together with shared purpose. Research from BCG suggests enterprises that advance in this direction stand to unlock hundreds of millions in additional value by directing human intelligence where it matters most. In a hardware-driven era, the winners will be the ones architecting ecosystems where intelligence—human and machine—works in concert.
Who’s getting it right with hardware (and what’s next)
“This creates a unique opening for those who can architect across the divide—entities that work with both the ingredient brands building the physical devices and the software companies racing to become the consumer's singular point of contact,” said Yann. “The irony is that while giants fight to own the operating system of daily life, interoperability standards like Matter are quietly ensuring that victory won't come from dominance but from orchestration.”
With so many competitors (and so much investment), we know that many of the companies that win will be those that ground AI in hardware people can actually use. AI as spectacle becomes AI in action: tools that support memory, identification, notes, and context in everyday moments. When intelligence shows up this way, it earns its place.
Meta offers a clear example. Its wearables emphasize human connection: helping people create, understand one another, pay attention, and recall what matters. Google Home shows a similar pattern, where hardware is framed around a simple question: how does this really help you, day to day?
Industry leaders are increasingly clear about where this is headed. As Amon has warned, “The biggest risk is… people don’t understand the transformation that is happening… especially when you look at what’s happening with physical AI and industrial.” In his view, the hardware opportunity extends far beyond data centers. “And people who don't see that are probably going to be blindsided.”
Meanwhile, there’s OpenAI, who, until now, has been all about that software. They’ve finally revealed their first real step into hardware…with a speaker. For a company that’s consistently been at the front of the AI wave, the physical debut feels notably conservative. While software tends to burst onto the scene with confidence, this hardware move is tiptoeing into the room.
Either way, people know the next meaningful advances in AI will arrive in a body…however that body ends up looking and acting.