China dominates humanoid robots market as wave of IPOs signals investor confidence in physical AI

Investors bet humanoid robots will transform industry and homes over the next decade

China is currently far outpacing the U.S. in the development of the technology, market watchers said. Softbank CEO Masayoshi Son told CNBC this week that physical AI and robotics were where he saw the next trillion-dollar company emerging from. Humanoid robots, designed to mimic human movement and capabilities, have been hitting headlines in recent years, from their use as baggage handlers at Japanese airports to Tesla's big bet on its Optimus humanoid. Market watchers have predicted that the machines will change the world over the next decade and forecast that the industry will grow 100-fold, as AI's physical capabilities evolve. One investor said consumer stocks were the path to unlocking value from it. Zornitza Todorova, head of thematic FICC research at Barclays and a co-author of the bank's "AI Gets Physical" report, told CNBC's "Squawk Box Europe" on Thursday that "it's the decade of the robot." "Humanoid robotics is really on an upward trajectory," she said. "The size of the market today is really small, it's 2 to 3 billion [dollars], but we see it going up to $200 billion in 2035." According to Todorova's report, published earlier this month, humanoids "are automation 3.0." The machines are designed to fill structural labor gaps, the report said, with ageing populations, urbanization and changing job preferences leaving "dirty, dull and dangerous" roles well suited to robots. "They're [already] doing simple, well-defined tasks like lifting boxes or picking things up from the assembly line, helping to fill roles where there are not that many humans that can do the jobs," Todorova told CNBC. "But that said, there is a lot to be done and the technology is maturing really, really fast," she added. "I think we are at the cusp of a transformation, we're just scratching the surface of what humanoid robots can do, and as the technology matures, as the models get better and faster at reacting to things in real time, I think we'll see a lot of applications in more services-oriented roles." The big opportunity in Western markets is going to be when physical AI reaches services-oriented roles, she added, which is where most of the economic growth in the West is generated. Barclays' report forecast two waves of humanoid deployment: the first is happening now and expected to last until 2030 in sectors like manufacturing, logistics, agriculture and construction, and the second after 2030 with the robots deployed in sectors including healthcare, elderly services, education and hospitality. The report also notes that China "is the world's robotics powerhouse and innovation lab," installing around half of all industrial robots globally -- nearly 300,000 versus 34,000 in the United States -- and lifting robot density by 600% to nearly 500 robots per 10,000 workers since 2016. China also "dominates the production and deployment of humanoid robots," and accounted for 85% of installations last year, the report added, saying China was producing robots "at roughly half the cost of Western competitors, typically in the $50k range." Jason Pidcock, who manages the £2.75 billion ($3.69 billion) Asian Income fund at asset management firm Jupiter, said that in a decade "the world will be completely different" thanks to developments in robotics. "In 10 years' time, there will be humanoid robots all over the place," he said during a meeting at Jupiter's offices in London on May 13. "You may have one in your home. You'll certainly have friends or family members that own a humanoid robot. Factories will be full of them. The armed forces, government departments will be full of them." Pidcock said that the rollout of the machines will dramatically improve productivity, saying that manufacturing the robots would require both hardware and software production. "Asia will be at the forefront of providing these things, and this is a big chunk of where we are investing," he said. In the year to the end of April, Pidcock's fund has gained 49.2%. Its top holdings include Mediatek, TSMC, Samsung, Foxconn, ST Engineering and Singtel. "We're looking for sectors that have companies in them that have the ability to evolve," Pidcock told the London event. "We're underweight consumer discretionary as a sector because our preferred way of playing the consumer is via the tech sector. So we think over the next few years, consumers will spend more of their discretionary spending on tech products, upgrading their phone, their computer, buying the first humanoid." Dan Ives, managing director and senior equity analyst at Wedbush Securities, told CNBC in an email that the company believes humanoid robots "could represent one of the biggest market opportunities in the AI Revolution." "This is the golden goose for physical AI and speaks to Tesla's grand vision on Optimus," said Ives. Ives manages Wedbush's AI Revolution ETF, which has gained 4.19% so far this year. The fund's top holdings are Micron, AMD, Broadcom and Nvidia. But he told CNBC that the core leading companies in the humanoid robotics space are still private. "We see China as right now the clear leader on this front. The U.S. is playing in catchup mode," he said. The market will be worth trillions of dollars over the next decade, Ives added, and "will change the way consumers and businesses operate over time." It will create a "massive production boost," he said, "but clearly there will be risks around robots that need to be carefully balanced by the industry and governments." Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Chinese humanoids are one step closer to IPOs

China's robotics sector is gearing up for a wave of IPOs as the country positions itself at the forefront of the next phase of AI. Unitree Robotics has secured approval for a Shanghai listing, while dozens of robotics firms are preparing to go public. Analysts expect IPO proceeds to accelerate R&D and support China's push for leadership in humanoid robotics and physical AI. China is pitching itself as the global fulcrum for the next phase of artificial intelligence and a legion of robotics companies is lining up initial public offerings to test investor appetite. Unitree Robotics, one of the most recognizable names in the industry after its robots practicing martial arts made headlines, on Monday received approval for a listing in Shanghai. Its IPO will serve as an early test for what could be a broader wave of offerings. Hong Kong alone has at least 46 robotics-related companies in the pipeline, more than 10% of applicants, according to a report. Companies that have filed IPO applications include Leju Robotics and Deep Robotics. "Chinese humanoids are one step closer to IPOs, igniting market interest on humanoids in the second half of 2026," Sheng Zhong, head of China industrials research at Morgan Stanley, wrote in a note. "Funds from most of the Chinese humanoids' IPOs will go toward R&D, especially robot models." The deep pipeline of robotics IPOs mirrors the fast rise of China's AI ecosystem, where an array of listings whipped up an investor frenzy in the past six months. It also aligns with Beijing's push to shift high-tech industries from innovation to large-scale deployment. China is rushing to set the pace of funding, industrialization and ultimately leadership in what Nvidia Corp. CEO Jensen Huang calls "physical AI." Shares of OneRobotics (Shenzhen) Co. jumped as much as 18% in Hong Kong on Tuesday, while component maker Leader Harmonious Drive Systems Co. gained as much as 11% on the mainland. "This is the decade of the robot - and it belongs to China," Barclays analysts, including Zornitsa Todorova, wrote in a note last month. "This leadership reflects a decade-long, state-guided push." The firm says China's robotics roll-out is already unmatched, accounting for 50% of global industrial robots and 85% of humanoids in 2025. Backed by coordinated industrial policy and tight supply-chain control, humanoids could reach about 3.8% of the nation's labor capacity by 2035, it estimates. Unitree got a nice shoutout from Nvidia's Huang on Monday, when he showcased his company's endeavors in robotic AI. The two companies have partnered to build humanoid "reference" machines, featuring five-fingered hands and built-in chips to replace cumbersome "Frankenrobots" in research labs. Some investors remain more cautious, though, when looking at the companies' fundamentals. Many robotics firms are expected to burn cash for years and concerns are mounting that valuations could run ahead of earnings. A gauge of humanoid robot stocks has fallen about 13% this year, after registering a 47% gain in 2025. ChinaAMC CSI Robot ETF, a major exchange-traded fund tracking robot-related stocks, has seen net fund outflows for most of this year. Valuations were also elevated, with the sector trading at about 40 times forward earnings, compared with about 14 times for the CSI 300 Index, according to Bloomberg-compiled data. "Investors trading at such elevated valuations are typically not driven by long-term fundamentals, but rather by the pursuit of short-term price gains," said Shen Meng, a director at Beijing-based investment bank Chanson & Co. "It indicates that sentiment is driven more by market dynamics than by conviction or long-term vision." The state-run China Securities Journal also struck a cautious tone in an editorial published Tuesday, warning that pre-IPO valuations may outpace fundamentals, with many firms still unprofitable, raising the risk of a sharp correction if growth or commercialization disappoints. Still, prospective issuers can look at the performance of China tech IPOs this year, with many listings thousands of times oversubscribed and producing big gains on their debuts. Two of those companies, AI model developers Knowledge Atlas Technology Joint Stock Co. and MiniMax Group Inc. last month gained inclusion in the Hang Seng Tech Index after massive rallies since their January listings. For investors, the robotics companies can also offer a way to benefit from the rapid expansion of a cutting edge industry, said Zhou Nan, founder and investment director of Shenzhen Long Hui Fund Management Co. "With continued advances in AI, the robotics sector is poised for substantial long-term growth," Zhou said. "Robotics is expected to become a key driver of enterprise value, and progressively complement or replace human labor across a wide range of use cases."