What happened in China At the World Artificial Intelligence Conference (WAIC) 2026 in Shanghai, the shift from abstract cloud-hosted software to physical, on-device AI became undeniable. The event opened with over 100 chip companies showcasing their latest hardware, alongside 64 consumer AI products deployed across three Shanghai zones. This massive display of physical AI integration highlights a strategic pivot that European founders and investors can no longer afford to ignore. Among the most significant developments, Alibaba launched its Tongyi Qianwen AI agent clip-on earbuds, which feature real-time translation and health tracking. This is not just another software update; it is a dedicated consumer hardware integration designed to bring AI agents directly into the physical world. Simultaneously, autonomous driving pioneer WeRide released WITT, a physical AI foundation model designed to unify multimodal scene understanding for autonomous driving and robotics. On the infrastructure and model front, the scale of development continues…