The clock is ticking, the CPU has started its evolution into parallel processing, and it wont be too long before large scale physics is possible on the CPU, in fact I'd argue that it's possible to some degree already.
At what point does the CPU transform into a vector processor like the GPU itself?
Physics calculations require vector calculations. A vector processor or a part of the die allocated to it (like SSE, AVX) is needed here. Whether it's implemented as an add-on card (traditional GPU) or closer to the CPU (co-processor on HT link) or even integrated into the CPU itself, it is still the same thing in essence.
This is exactly what AMD and Intel are doing. The CPU is dead. Long live the CPU.