Humanoid Robots: China's Next Big Tech Bubble?

Elon Musk's ambitions in humanoid robotics face stiff competition from over 150 Chinese companies rushing to enter the sector, as highlighted by the National Development and Reform Commission. On November 27, 2025, Li Chao, a spokesperson for the commission, emphasized the need to prevent market saturation that could stifle genuine research and development.

China's government has identified the humanoid robot industry as a critical driver for future economic growth in its latest five-year plan. The rapid development in this sector has been fueled by the popularity of dancing robots from Unitree, which captured national attention during the Spring Festival Gala.

Following this momentum, startups like AgiBot and Galbot have showcased humanoid robots performing tasks from running marathons to making coffee. Despite this, Li Chao warned of the risks of over-investment, drawing parallels to the overspending seen in the bikesharing and semiconductor sectors that have left many companies struggling.

CitiGroup projects that the global humanoid robot market could reach a staggering $7 trillion by 2050, with about 650 million humanoid robots expected to be in use, surpassing the current vehicle count of 1.2 billion.

However, Bloomberg cautioned that widespread adoption in households and factories remains years away. Musk claimed in mid-May that the global economy could potentially grow tenfold with the integration of robot labor, but critics question the practicality and economic sense of humanoid robots for consumers and companies alike.

The growing concern in China about a shrinking working-age population, projected to decline by 22 percent by 2050, is driving the push for humanoid robots to fill labor gaps, particularly in manufacturing.

Notably, UBTech Robotics has deployed its Walker S1 robot in iPhone assembly lines for Foxconn and over 500 units in various automotive factories to assist in tasks that carry health risks for human workers.

While the Chinese government is backing the humanoid robot initiative, not everyone is convinced of its necessity, with Romain Moulin, CEO of French startup Exotec, advocating for more utilitarian warehouse robots instead.

Musk's confidence in Tesla's humanoid robot development is challenged by the rapid advancements of Chinese firms, raising questions about whether Tesla can maintain its competitive edge in this emerging market.