Sereact, Otto Group bring NVIDIA-powered physical AI to returns processing

Sereact and Otto Group announced a two-phase approach for AI-controlled robots to manage the inspection and sortation of returned customer orders.

The companies said that initially, 10 AI-controlled dual-arm systems will be deployed at Otto Group’s logistics center in Poland. In a second phase, 15 more robotic arms are planned to be added based on initial results, scaling the program to a total of 25.

The two companies said that they are jointly developing and refining the technology as part of the project, with Otto Group evaluating the potential for a broader rollout across its logistics network if the second phase is successful.

Automation in returns processing applications

Sereact and Otto Group said that few processes in e-commerce are as hard to automate as returns - items come back folded, crumpled, repackaged and the assortment of a multi-category retailer never stops changing. The companies said that traditional automation depends on known products and predictable presentation, neither of which exists in returns.

Sereact said that Cortex, the company’s physical AI model, is built for exactly this challenge: it generalizes objects it has never encountered and decides in real time how to grasp each item, assess its condition and route it accordingly.

“A robot that only knows yesterday's catalog is of little use in a returns center,” said Dr. Ralf Gulde, co-founder and CEO of Sereact. “Cortex has to deal with whatever comes out of the next parcel. Every return the systems handle makes the model better at the next one.”

Sereact said that Cortex is built on NVIDIA’s physical AI stack. The company uses NVIDIA Isaac Sim and NVIDIA Isaac Lab to turn real picks from the returns line into thousands of simulated variants, and NVIDIA Cosmos world foundation models to re-render them across garment states, packaging, materials and lighting. Sereact said that new policies are post-trained on NVIDIA Blackwell GPUs and tested against held-out cases before they reach the robots. When a robot struggles with an item, Sereact said that the fix can come back as a tested update within days instead of weeks.

Multi-phase deployment details

The companies said that Sereact’s robots will be introduced in stages over the course of the project. Each stage will generate operational feedback that the partners can use to improve the systems and adapt them to the requirements of large-scale returns processing. Sereact and Otto Group said that this shared development process is intended to establish whether the technology can meet the reliability, flexibility, and quality standards required for broader use.

“Our customers expect returns to be simple and fast - behind that lies a process that is time-critical and laborious, both for customers and for our business,” said Martin Umland, group vice president, supply chain management at Otto Group. “Returns are notoriously hard to automate, and physical AI has the potential to change that. This project lets us find out, at real scale, how far physical AI can take us - an important step towards a more flexible and resilient supply chain.”

Otto Group said that the partnership builds on its series of investments in robotics across its logistics operations and forms part of the company’s medium-term commitment to invest €350 million in technology and AI.

In July 2026, Sereact announced a deployment with CEVA Logistics for returns handling at Zalando sites in Germany and Poland.