Interesting, will have to wait to see if it pans out.
The big challenge gpu physics show me as a gamer today, is that currently it's not impressive and bring little to the game and the performance hit is ridiculous for what little it does. This is speaking to physx, perhaps if they actually do this, they will implement it in a way that it can deliver more game-changing elements but use less resources.
Clearly gpu physx has been an absolute failure. In five years there are 16 games that use it, four of which are actually decent. The best example of which is Mafia 2 and it does not bring too much if anything not seen on the CPU and is a huge resource hog.
If AMD can get physics to the point where I can knock down and destroy all objects in the game world and that manipulation then correlates to a direct change in how I now interact with the game world, it will be worthwhile. Plus, it can't require it's own dedicated $200+ card just to be passably playable.