🤖 Why China might lead the Robot Revolution

'Thanks to its manufacturing prowess, China is positioned for dominance in humanoid robotics much as it has with electric vehicles'

Mar 04, 2025

My fellow Up Wingers,

This slide from “Investable AI: Summary of Gen AI Industry Developments in 2024,” a recent report from the global quantitative derivatives and strategy team at JPMorgan, presents a rich font of essay ideas for me:

~Free AI: AI pricing and selection will be based on "smart enough" and reasonably priced models rather than "the best" models. AI will reduce costs significantly, increasing demand (Jevons Paradox).
Agentic AI: Corporations will use AI Agents, with limited consumer use initially due to security concerns (credit card details, logins, passwords, etc.).
Robotics Boom: More humanoid robots will emerge, with at least 34 humanoid models nearing production in 2025. 2026 might be the "Year of Physical AI."
Movies and DeepFake Boom: AI-generated pixel-perfect movies and realistic deepfakes will make custom video creation mainstream, raising concerns about the end of traditional video evidence.
Open Source Resurgence: Open-source AI models (like Llama, Graphite, Nemo, Mixtral, Phi, DeepSeek-R1, and Qwen 2.5) will narrow the gap with leading closed AI, potentially shrinking the gap to 12 weeks.
Closed Source AI Dominance in AGI/ASI: Advanced LLMs like GPT-o3 (alpha) and Gemini 2.0 with "Flash Thinking" will enable step-wise problem-solving, improving math, physics, and logic accuracy.
AI in Science: AI will drive breakthroughs in materials science, biology, longevity research, and custom cancer vaccines.
AI and National Security: AI firms will collaborate with national security agencies for border surveillance and intelligence, facing stricter regulations.
Competition for NVIDIA: IBM, Amazon, and AMD will invest in alternative hardware (e.g., Cerebus) to challenge NVIDIA’s dominance, especially in inference.
Quantum Advantage: Willow from Google will enhance error correction in quantum circuits, enabling larger-scale quantum computing. 2025 will be the International Year of Quantum Science and Technology.

So many options here, but let’s go with the third one, “Robotics Boom.” (Hardly surprising, I grant you, given the headline and the featured image.) It’s a prediction that I would guess is also broadly supported — at least directionally — by the specific industry analysts at the megabank.

As it turns out, JPM’s Hong Kong-based Infrastructure, Industrials & Transport team also just published an optimistic report on humanoid robots. I would note the geographic base of this team indeed says something important where industry leadership is coming from.

In brief:

China is positioned for dominance in humanoid robotics much as it has with electric vehicles. From the report: “Although the humanoid robot industry in China is still in its nascent stages, it is poised to gain significant growth momentum, potentially mirroring the success seen in the NEV and machinery industries."
Here we go again, as JPM’s analysis suggests that China's formidable manufacturing ecosystem, with its dense network of suppliers and technical expertise, is a massive advantages when it comes to churning out mass-market products.
It also doesn’t hurt that Beijing is all about robotics: “The 2025 China Spring Festival Gala, where humanoid robots from Unitree performed on stage, serves as a cultural endorsement and a key opinion leader channel, highlighting the government's strategic focus and commitment to developing the humanoid robot industry."
As for the US, JPM sees Tesla as the sector's frontier pusher, with Elon Musk's Optimus robot targeted for commercial production this year and projected to capture half the global market for humanoid robots, at least initially. The company’s ambitious plans call for a tenfold production increase by 2026/2027. (Musk, by the way, says the biggest potential return-on-investment from AI will be humanoid robots, and Optimus itself is a potential $10 trillion dollar potential revenue opportunity: “Like, it's really bananas.”)
The report stresses that America's advantage lies not in manufacturing scale — no surprise there — but in intellectual capital. The country's tech giants, such as NVIDIA, Google and OpenAI, are developing the sophisticated AI systems that serve as the "brains" to China's mechanical "brawn." These represent the highest-value components in the robotic supply chain.
That said, China's advantages in scaling production could prove decisive. The country's demographic headwinds — a shrinking workforce and rapidly aging population — add urgency to its robotic push. As production volumes increase, Chinese manufacturers' well-honed skills in driving down costs may ultimately determine who brings affordable humanoid robots to the world's factories, hospitals and homes.

So that seems to be the state of play right now. And here’s the bank’s “blue sky” forecast (and as context there are about 5 billion smartphone users worldwide):

We estimate a total addressable market (TAM) of 5 billion units for humanoid robots, based on demographic trends and labor force dynamics. The global working-age population is declining, particularly in developed countries and regions like China, Japan, South Korea, and Europe. Humanoid robots could replace or augment human workers in industries facing severe shortages, such as healthcare, logistics, and domestic services. Additionally, sectors like manufacturing, logistics, and warehousing are poised for higher adoption rates due to the nature of the work required. Humanoid robots also have potential in hazardous tasks, such as disaster rescue and nuclear reactor maintenance, where their mobility and technology offer significant advantages.

So it really seems like the robot momentum is with China here. But let's not totally dismiss what’s happening here in America — Tesla aside — where humanoid robots are stomping out of science fiction and into, initially, warehouses. At a Spanx distribution center in Georgia, Agility Robotics' "Digit" machines retrieve bins of shapewear. Though still limited in number — just two robots staff the facility — they offer good example of how anthropomorphic design offers inherent advantages. Earth’s artificial environment, crafted for bipedal hominids, us, features stairs, eye-level shelving and narrow passages ill-suited to conventional machines. Unlike their single-task cousins, these mechanical workers promise versatility.

“Humanoid robots are the first category of robots that can be doing completely different tasks based on the needs of the business or the time of the shift,” Adrian Stoch, chief automation officer of GXO Logistics, which owns and operates the distribution center for Spanx, tells The Wall Street Journal. “In the future, we could have Digit unloading a trailer in the morning, picking goods in the afternoon, and loading trucks in the evening.”

A key technological breakthrough, as noted in the JPM report, comes courtesy of AI. "The ChatGPT moment for general robotics is just around the corner," predicts Jensen Huang of Nvidia, a chipmaker. The robots' bodies, in other words, finally have brains to match. But what will matter more, being the leading country making the bodies or the brains?

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🤖 Why China might lead the Robot Revolution

'Thanks to its manufacturing prowess, China is positioned for dominance in humanoid robotics much as it has with electric vehicles'

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