Embodied AI is artificial intelligence that has a body, usually a robot, and has to sense its surroundings and move within them. It must cope with gravity, friction, clutter and timing, problems a chatbot never meets.
You meet the term in robotics news, where labs describe models with “embodied reasoning”: the ability to judge where objects are, how to grasp them and what will happen when they move. Google, for example, reports scores on ERQA, an embodied reasoning benchmark it built.