Nvidia Corp. is working to make humanoid robots safer around people, arguing that they¡¯ll need to handle split-second decisions before they can be trusted to work closely with humans.

The chipmaker is offering software and semiconductors that will allow humanoids to enter the workplace and truly interact with people ¡ª even making physical contact if necessary. Nvidia¡¯s Halos software, developed from systems used for self-driving vehicles, will be the basis of computers that give robots a much better awareness of what¡¯s happening around them, the company said in a statement Monday.

Nvidia and its Silicon Valley peers are racing to develop technology for robotics, billing it as the next big market for artificial intelligence. The machines will evolve into a market with billions of devices, tech executives predict.

Humanoid robotics ¡ª technology designed to resemble people, with heads, torsos and limbs ¡ª will generate $200 billion in revenue by 2035, according to Barclays estimates.

But the industry will have to overcome some hurdles. Current safety systems force robots to stop or reduce speed when there¡¯s a chance they might come into contact with a human. That makes them less productive. The safeguards also hinder cooperative activities, such as handing an item to coworkers or helping them lift something heavy.

¡°If you think about safety in the context of a traditional robot, it is basically you need to put it in a cage or you need to have sensors which can detect there¡¯s an obstacle and the robot comes to a stop,¡± said Amit Goel, a senior director of product management at Nvidia. ¡°But that is not enough for a humanoid robot.¡±

Nvidia will provide technology for robots like Agility Robotics¡¯ Digit, allowing the machines to make their own decisions based on analysis of what¡¯s going on around them. That will require hardware that supports safety awareness, according to Nvidia. The company is offering up Halos as an operating system that runs on top of its IGX Thor hardware.

The machines will also have connections to external sensors. An autonomous forklift, for example, will be able to tap cameras in a warehouse to see what¡¯s around a corner and decide whether it can keep going full tilt or slow down to avoid a collision, the company said.

Nvidia, the world¡¯s most valuable company, generates much of its revenue from chips used in AI data centers. But it has gradually been expanding into other fields ¡ª often offering technology for free ¡ª in an effort to broaden the use of artificial intelligence.

In another step aimed at accelerating robotics adoption, Nvidia created a lab where robot makers and customers can run safety tests before going to regulators to get...