Embodied Cognition
Sounds like they're taking seriously the new-ish direction that some philosophers and AI-ers have been exploring in Embodied Cognition (AKA the "Enactive Paradigm"). The idea that intelligence / mind /consciousness is not a disembodied property of an isolated collection of matter but rather is the "structural coupling" of an entity and its environment. Maturana & Varela were leading lights and I like where they were going ... but practical application? I think it's a bit early for that by a few centuries at least - DARPA's speciality