PATEO Signs Strategic MoU with Arm to Advance Physical AI Innovation

SHANGHAI, Sept. 22, 2026 /PRNewswire/ -- PATEO (02889.HK) recently signed a strategic cooperation Memorandum of Understanding (MoU) with Arm to advance innovation in physical AI. As part of this collaboration, PATEO and Arm will explore innovative solutions for physical AI applications, including next-generation AI-enabled workloads for automotive that enable perception-driven and interaction-driven intelligence.

Industry Trend: AI is Moving into the Physical World, with Automobiles Emerging as a Key Platform

Physical AI is rapidly entering a new phase of industrial deployment, capable of real-time interaction between intelligent agents and the physical world and enabling machines to perform perception, understanding, decision-making, and action in a closed-loop system. This allows them to operate autonomously and continuously adapt in complex environments. As mobile intelligent terminals that integrate sensing, computing, connectivity, and control, vehicles are emerging as one of the most scalable application domains for physical AI.

As intelligent vehicles evolve from isolated feature innovations to holistic intelligent experiences, in-vehicle AI workloads are expanding beyond traditional applications such as voice assistants, navigation, and infotainment to encompass increasingly sophisticated scenarios, including multimodal perception, cockpit-driving integration, real-time interaction, and in-vehicle AI agents.

This evolution places greater demands on underlying computing platforms. In addition to delivering high computing power, these platforms also need to provide low power consumption, real-time responsiveness, reliability, and functional safety. Achieving this requires close collaboration across IP, chips, operating systems, algorithms, applications, and cloud platforms, supported by an open and thriving ecosystem. Computing innovation for physical AI is increasingly becoming an important direction for the next stage of competition in intelligent vehicle development.

Deepening Collaboration to Accelerate Innovation Across the Physical AI Stack

As a global leader in computing platforms, Arm brings extensive expertise in automotive technologies and a broad industry ecosystem. PATEO is a Tier 1 supplier with full-stack capabilities spanning intelligent cockpits and connected vehicle technologies, supported by an integrated technology platform covering software, hardware, chips, and cloud services.

The collaboration will further strengthen innovation between the two companies in intelligent vehicles and physical AI, while providing new momentum for PATEO's integrated "Software, Hardware, Chip, and Cloud" strategy.

Liang Chen, Vice President of PATEO, commented:

"Innovation has always been the core driving force behind PATEO's growth. Today, AI is rapidly evolving from the cloud to the edge computing and entering a new era of physical AI. We believe that open ecosystem collaboration is essential to accelerating the commercialization and adoption of physical AI technologies. The Arm compute platform is already widely deployed across the automotive industry, adopted by a broad software ecosystem, and the company shares a clear vision for the future of physical AI. We are delighted to partner with Arm to explore innovative physical AI applications and work together to foster innovation and growth across the industry."

Building Capabilities: Accelerating Progress Towards "AI-Defined Vehicles"

As an AI-driven company, PATEO has long recognized that AI is evolving from the cloud to the edge and from standalone capabilities to holistic vehicle intelligence. The company also foresaw that AI would increasingly become a defining factor in shaping vehicle experiences and competitive differentiation.

Based on this vision, PATEO established its "AI-Defined Vehicles" development philosophy and has continued to increase investment in physical AI in recent years, building a comprehensive foundation spanning technology architecture, product platforms, and mass-production deployment. Commercially, PATEO's AI-related business generated approximately RMB 209 million in revenue in the first half of 2026, representing year-on-year growth of 588.6%. This reflects the transition of AI commercialization from proof-of-concept to scaled deployment. At the same time, leveraging its extensive mass-production experience with products such as intelligent cockpit domain controllers, PATEO has developed end-to-end capabilities spanning technology development, platform integration, and large-scale deployment. These capabilities provide a strong foundation for bringing innovative physical AI solutions into real-world applications.

Looking ahead, PATEO will continue to embrace an open and collaborative approach, working closely with industry partners to advance physical AI innovation and accelerate its deployment in in-vehicle scenarios. Together, these efforts will help drive the evolution of intelligent vehicles toward more advanced levels of intelligence, delivering safer, smarter, and more efficient mobility experiences for users around the world.