All hail the rise of the humanoid robots
Color me confused. After years of being told not to associate the word 'robots' with "Terminator"-type androids, recent news is chock-full of reports of humanoid robots running half marathons or performing dances and other gymnastic maneuvers.
Not only do I have to redraw my mental image of those devices — I'd gotten comfortable with Robot from the 1960s TV show, 'Lost in Space" — but there is also news that robots can now build themselves.
There is good reason to be scared — or at least concerned — but as usual, it's not what you think. Robotics is another of the critical emerging technologies, mastery of which will be central to 21st-century economic leadership. In combination with artificial intelligence, robotics can, and likely will, reshape industrial production on a paradigm-shifting scale. The next industrial revolution will proceed in the footsteps of its robotic participants.
Robots are big business. There were an estimated 4.3 million operational robots in 2023 and another 5 million consumer service robots — like those in a cafe in Shibuya — in operation. Revenue numbers vary. According to one estimate, sales will hit $50 billion this year. But Market Research Future reckoned that global sales exceeded $71 billion in 2023 and projects 18.2% annual growth will grow the market to $200 billion by 2030.
Robots, especially the industrial variety, are old news. Assembly lines have become increasingly automated, an evolution that has been key to Asia's industrial trajectory and its manufacturing successes. Japan has long been a leader in this field.
The buzz today surrounds humanoid robots, machines that try to mimic human actions. An authoritative analysis by Bank of America released last month anticipates that global sales of those machines will explode. It forecasts global sales of just 18,000 units this year which will grow to 1 million units in 2030 and 10 million in 2035, an 88% annual growth rate over the next 10 years. By 2060, BoA expects there to be 3 billion in operation, or one robot for every three people on the planet.
China is likely to be the chief beneficiary of that extraordinary growth. A Morgan Stanley report earlier this year concluded that 'China continues to show the most impressive progress in humanoid robotics where startups are benefiting from established supply chains, local adoption opportunities and strong degrees of national government support.'
Key to that incredible trajectory is a cost structure that rapidly decreases as parts are commoditized and mass production spreads. Some scoff at the idea of an 88% growth rate, but there's precedent: The BoA analysts note that the compound annual growth rate of passenger electric vehicle sales in China reached 90% in the decade between 2013 and 2023.
Reyk Knuhtsen of SemiAnalysis, an independent research and analysis firm that focuses on semiconductors and AI, warns that the analogy is apt: 'China has the potential to replicate its disruptive impact from the EV industry in the humanoid space.'
China's success is another example of the vision of — and resources behind — Made in China 2025, the 2015 strategic plan to transform Chinese industry and position the country to lead in the most important and competitive sectors of the 21st-century economy. Robotics is one of five strategic initiatives in the plan, one that aimed to introduce smart manufacturing and digitalization. In 2023, China's Ministry of Industry and Information Technology identified humanoid robots as the 'new frontier in technological competition.'
Beijing isn't the only government with this vision. A quick survey of 10 countries' lists of critical and emerging technologies revealed that all included robotics. Unfortunately, noted Knuhtsen, only China is positioned to achieve the EV-style breakthrough.
That reflects the country's leadership in the field. The Australian Strategic Policy Institute's Critical Technology Tracker puts China as number one in advanced robotics (with 34.5% of high-impact research outputs), followed by the United States (19.7%), the U.K., Italy and Germany. There is some dispute around the ASPI's methodology, but all agree that China's lead in the development of AI algorithms, when combined with its superior manufacturing capability, make that country the pacesetter in this sector.
Moreover, experts note that when it comes to manufacturing, 70% of the components of humanoid robots are interchangeable with those of EVs. So once again, leadership in one field — electric vehicles — generates spillover effects in other key technologies.
This is where it gets really interesting. Humanoid robots are sometimes called 'embodied AI' because they are intended to escape the two dimensions of the screen and allow their hardware to interact with the environment. In so doing, the robot learns and evolves.
He Han, a member of the Chinese People's Political Consultative Conference (CPPCC) National Committee, China's top political advisory body, and CEO of Tianyu Digital Technology, told Beijing Review that 'This is an evolutionary revolution from mechanical shells to digital life forms.'
He added that 'Embodied intelligence deeply integrates AI into 3D physical environments, enhancing perception, comprehension, interaction and decision-making in real-world contexts. ... It vastly expands AI's depth and breadth of understanding, enabling more scientific, rational and adaptive decisions.'
It's only a slight exaggeration to call that "Terminator"-type material.
But it's the second dimension of this combination of hardware and AI that should keep you up at night. An important piece of that evolution is allowing robots to design the next generation of robots, a development that will transform production. For Knuhtsen, the impact of this is 'exponential compared to their last strategic industry captures.' He explained that 'robotics systems manufacturing more robotics systems, and with each unit produced the cost will be driven down continuously and the quality will improve, only strengthening their production flywheel. This will repeat ad infinitum.'
This process is under way. Tesla has a humanoid robot project, Optimus, that Elon Musk thinks could be a bigger business than his automobile venture. (Skeptics are skeptical.) Nvidia last month released GR00T N1, 'the first of a family of fully customizable models that NVIDIA will pretrain and release to worldwide robotics developers.'
For industry observers, however, China is setting the pace. Unitree Robotics, a Chinese company whose models can dance, as well as do standing front and side flips, has reportedly sold two humanoid robots and other Chinese manufacturers have announced plans to produce 5,000 units this year, which is also Optimus' goal. Other Chinese companies have introduced AI models that learn from watching videos.
Most significantly, Chinese supply chains are wholly domestic, uncoupled from foreign — read: U.S. — suppliers. That means that those companies capture the cost declines, a process we've already seen in the EV sector.
Industry observers warn of 'a DeepSeek moment' — when China's reduced costs, forecast to fall 70% over the next five years, upend traditional economic expectations for a new technology — or 'an iPhone moment' or 'a ChatGPT moment,' shorthand for the tipping point to mass consumption, and which is expected in three to five years.
And because this is a general purpose technology, one that is used throughout the economy, Knuhtsen warns that 'this time the disruption could extend far beyond a single industry, potentially transforming the labor force itself.' He concludes that this 'poses an existential threat to the U.S. as it is outcompeted in all capacities.'
Color me scared.
Brad Glosserman is deputy director of and visiting professor at the Center for Rule-Making Strategies at Tama University as well as senior adviser (nonresident) at Pacific Forum. His new book on the geopolitics of high-tech is expected to come out from Hurst Publishers this fall.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Japan Times
2 days ago
- Japan Times
BYD unleashes an EV industry reckoning that alarms Beijing
The price war engulfing China's electric vehicle industry has sent share prices tumbling and prompted an unusual level of intervention from Beijing. The shakeout may just be getting started. For all the Chinese government's efforts to prevent price cuts by market leader BYD from turning into a vicious spiral, analysts say a combination of weaker demand and extreme overcapacity will slice into profits at the strongest brands and force feebler competitors to fold. Even after the number of EV makers started shrinking for the first time last year, the industry is still using less than half its production capacity. Chinese authorities are trying to minimize the fallout, chiding the sector for "rat race competition' and summoning heads of major brands to Beijing last week. Yet previous attempts to intervene have had little success. For the short term at least, investors are betting few automakers will escape unscathed: BYD, arguably the biggest winner from industry consolidation, has lost $21.5 billion in market value since its shares peaked in late May. "What you're seeing in China is disturbing, because there's a lack of demand and extreme price cutting,' said John Murphy, a senior automotive analyst at Bank of America. Eventually there will be "massive consolidation' to soak up the excess capacity, Murphy said. A drone view shows a BYD vessel at the Itajai port in Santa Catarina, Brazil, on May 28. | REUTERS For automakers, relentless discounting erodes profit margins, undermines brand value and forces even well-capitalized companies into unsustainable financial positions. Low-priced and low-quality products can seriously damage the international reputation of "Made-in-China' cars, the People's Daily, an outlet controlled by the Communist Party, said. And that knock would come just as models from BYD to Geely, Zeekr and Xpeng start to collect accolades on the world stage. For consumers, price drops may seem beneficial but they mask deeper risks. Unpredictable pricing discourages long-term trust — already people are complaining on China's social media, wondering why they should buy a car now when it may be cheaper next week — while there's a chance automakers, as they cut costs to stay afloat, may reduce investment in quality, safety and after-sales service. Auto CEOs were told last week they must "self-regulate' and shouldn't sell cars below cost or offer unreasonable price cuts, according to people familiar with the matter. The issue of zero-mileage cars also came up — where vehicles with no distance on their odometers are sold by dealers into the second-hand market, seen widely as a way for automakers to artificially inflate sales and clear inventory. Chinese automakers have been discounting a lot more aggressively than their foreign counterparts. Murphy said U.S. automakers should just get out. "Tesla probably needs to be there to compete with those companies and understand what's going on, but there's a lot of risk there for them.' Others leave no room for doubt that BYD, China's No. 1 selling car brand, is the culprit. "It's obvious to everyone that the biggest player is doing this,' Jochen Siebert, managing director at auto consultancy JSC Automotive, said. "They want a monopoly where everybody else gives up.' BYD's aggressive tactics are raising concerns over the potential dumping of cars, dealership management issues and "squeezing out suppliers,' he said. The pricing turmoil is also unfolding against a backdrop of significant overcapacity. The average production utilization rate in China's automotive industry was mere 49.5% in 2024, data compiled by Shanghai-based Gasgoo Automotive Research Institute shows. An April report by AlixPartners, meanwhile, highlights the intense competition that's starting to emerge among new energy vehicle makers, or companies that produce pure battery cars and plug-in hybrids. In 2024, the market saw its first ever consolidation among NEV-dedicated brands, with 16 exiting and 13 launching. "The Chinese automotive market, despite its substantial scale, is growing at a slower speed. Automakers have to put top priority now on grabbing more market share,' Ron Zheng, a partner at global consultancy Roland Berger, said. Jiyue Auto shows how quickly things can change. A little over a year after launching its first car, the automaker jointly backed by big names Geely and technology giant Baidu began to scale down production and seek fresh funds. A BYD dealership in Beijing | Bloomberg It's a dilemma for all carmakers, but especially smaller ones. "If you don't follow suit once a leading company makes a price move, you might lose the chance to stay at the table,' AlixPartners consultant Zhang Yichao said. He added that China's low capacity utilization rate, which is "fundamentally fueling' the competition, is now even under more pressure from export uncertainties. While the push to find an outlet for excess production is thrusting more Chinese brands to export, international markets can only offer some relief. "The U.S. market is completely closed and Japan and Korea may close very soon if they see an invasion of Chinese carmakers,' Siebert said. "Russia, which was the biggest export market last year, is now becoming very difficult. I also don't see Southeast Asia as an opportunity anymore.' The pressure of cost cutting has also led analysts to express concern over supply chain finance risks. A price cut demand by BYD to one of its suppliers late last year attracted scrutiny around how the car giant may be using supply chain financing to mask its ballooning debt. A report by accounting consultancy GMT Research put BYD's true net debt at closer to 323 billion yuan ($45 billion), compared with the 27.7 billion yuan officially on its books as of the end of June 2024. The pain is also bleeding into China's dealership network. Dealership groups in two provinces have gone out of business since April, both of them ones that were selling BYD cars. Beijing's meeting with automakers last week wasn't the first attempt at a ceasefire. Two years ago, in mid 2023, 16 major automakers, including Tesla, BYD and Geely signed a pact, witnessed by the China Association of Automobile Manufacturers, to avoid "abnormal pricing.' Within days though, CAAM deleted one of the four commitments, saying that a reference to pricing in the pledge was inappropriate and in breach of a principle enshrined in the nation's antitrust laws. The discounting continued unabated.
Japan Times
02-05-2025
- Japan Times
Trump's trade war shakes dollar's haven status, opens door for Asian financial hubs
Amid the U.S. dollar's recent volatility, Donald Trump's trade war has left many analysts skeptical of its long-term viability as a haven. The first question in Asia is, how will the wealthy respond? The second: Where will they park their capital, Singapore or Hong Kong? A previous generation of the affluent Chinese diaspora, which had made its money in resources like rubber, sugar, palm oil and tin before and during World War II, stormed out of the British pound after its 1967 devaluation, choosing to leave behind a fading imperial master to embrace the preeminent post-colonial superpower. Trump's policies have thrust a similar decision on their progeny and the nouveau rich: real-estate moguls, startup billionaires, deep-pocketed dealmakers and industrial tycoons. Singapore and Hong Kong extend generous tax breaks to family offices or vehicles through which the uberprosperous manage their investments. Both centers also offer cash-for-residency pathways. To see which one of them may have an upper hand, consider first the historical record, before taking into account what's different now. In 1968, Singapore emerged as the No. 1 choice for Asian tycoons to execute their currency shift. That's because the city-state, eager to chart an independent economic destiny after its separation from Malaysia, quickly set up an Asian dollar market with the help of Dick van Oenen, a Dutch trader at Bank of America. It was essentially a separate set of ledgers in which banks recorded cross-border transfers into dollar-denominated assets during Asian trading hours. A more laissez-faire Hong Kong should have been the preferred venue for this business, but as Oxford historian Catherine Schenk has shown, it entered the contest too late because of resistance from bankers and local authorities; they feared outflows of local liquidity. The Singapore market grew with the influx of petrodollars in the 1970s. Even now, despite the huge wealth creation at Hong Kong's doorstep since China began to open up, intra-Asian movement of personal assets remains almost equally divided between the two financial centers. Expect some of the inertia to carry on: Indian family offices' list of preferred locations will more likely continue to include Singapore, alongside London and Dubai — all cities with significant populations of nonresident Indians. But Hong Kong will offer a compelling investment case. Should the trade war intensify, and U.S.-listed Chinese stocks such as Alibaba Group Holding and Baidu are forced to delist, the only way to access them — as well as automotive powerhouses like BYD and promising AI startups like Zhipu — may be via Hong Kong and its links with onshore markets on the mainland. For similar reasons, Indonesian money, which has tended to favor Singapore over Hong Kong by 2 to 1, might also look more favorably toward the Chinese special administrative region. The yuan's limited convertibility is a hurdle and a possibility of its devaluation a near-term risk. But these aren't showstoppers in the long run. As I wrote recently, the greenback's monopoly in payments is already threatened. Digital currencies may be able to bypass the dollar to settle cross-border financial claims where neither party has a direct interest in American money. Hong Kong, which has opened its securities-regulation tent to accommodate tokenized assets, may be able to lure the rich to keep their crypto in custody with the city's banks. Trump's trade policies, even if substantially reversed, have sent a loud message to the Asian affluent classes. For all its post-World War II prosperity, America is no longer keen to continue with a system in which it habitually buys more goods from the rest of the world than it sells and pays for the difference by hawking assets. If Washington doesn't want its money to be a haven, then Asians have to look for alternatives. Despite the recent bounce, bearish dollar moves are "structural,' according to Bloomberg Intelligence. "Highly uncertain tariff policies and the associated question marks hovering around U.S. economic exceptionalism are contributing to an acceleration of de-dollarization,' note analysts Audrey Childe-Freeman and Thinh Nguyen. A corollary for Hong Kong as a financial center is that it will need to give plenty of yuan-denominated options to those parking their assets in the city. A deep pool of liquidity in the Chinese currency will be its advantage over Singapore. It may also be time, as my colleague Shuli Ren has argued, to start behind-the-scenes preparations to bring an orderly end to the local currency's dollar peg. In the late 1960s, the then British-run city was slow to latch on to the switch away from the pound; six decades later, the greenback mustn't come in the way of its fight for flows. Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia.
Japan Times
22-04-2025
- Japan Times
All hail the rise of the humanoid robots
Color me confused. After years of being told not to associate the word 'robots' with "Terminator"-type androids, recent news is chock-full of reports of humanoid robots running half marathons or performing dances and other gymnastic maneuvers. Not only do I have to redraw my mental image of those devices — I'd gotten comfortable with Robot from the 1960s TV show, 'Lost in Space" — but there is also news that robots can now build themselves. There is good reason to be scared — or at least concerned — but as usual, it's not what you think. Robotics is another of the critical emerging technologies, mastery of which will be central to 21st-century economic leadership. In combination with artificial intelligence, robotics can, and likely will, reshape industrial production on a paradigm-shifting scale. The next industrial revolution will proceed in the footsteps of its robotic participants. Robots are big business. There were an estimated 4.3 million operational robots in 2023 and another 5 million consumer service robots — like those in a cafe in Shibuya — in operation. Revenue numbers vary. According to one estimate, sales will hit $50 billion this year. But Market Research Future reckoned that global sales exceeded $71 billion in 2023 and projects 18.2% annual growth will grow the market to $200 billion by 2030. Robots, especially the industrial variety, are old news. Assembly lines have become increasingly automated, an evolution that has been key to Asia's industrial trajectory and its manufacturing successes. Japan has long been a leader in this field. The buzz today surrounds humanoid robots, machines that try to mimic human actions. An authoritative analysis by Bank of America released last month anticipates that global sales of those machines will explode. It forecasts global sales of just 18,000 units this year which will grow to 1 million units in 2030 and 10 million in 2035, an 88% annual growth rate over the next 10 years. By 2060, BoA expects there to be 3 billion in operation, or one robot for every three people on the planet. China is likely to be the chief beneficiary of that extraordinary growth. A Morgan Stanley report earlier this year concluded that 'China continues to show the most impressive progress in humanoid robotics where startups are benefiting from established supply chains, local adoption opportunities and strong degrees of national government support.' Key to that incredible trajectory is a cost structure that rapidly decreases as parts are commoditized and mass production spreads. Some scoff at the idea of an 88% growth rate, but there's precedent: The BoA analysts note that the compound annual growth rate of passenger electric vehicle sales in China reached 90% in the decade between 2013 and 2023. Reyk Knuhtsen of SemiAnalysis, an independent research and analysis firm that focuses on semiconductors and AI, warns that the analogy is apt: 'China has the potential to replicate its disruptive impact from the EV industry in the humanoid space.' China's success is another example of the vision of — and resources behind — Made in China 2025, the 2015 strategic plan to transform Chinese industry and position the country to lead in the most important and competitive sectors of the 21st-century economy. Robotics is one of five strategic initiatives in the plan, one that aimed to introduce smart manufacturing and digitalization. In 2023, China's Ministry of Industry and Information Technology identified humanoid robots as the 'new frontier in technological competition.' Beijing isn't the only government with this vision. A quick survey of 10 countries' lists of critical and emerging technologies revealed that all included robotics. Unfortunately, noted Knuhtsen, only China is positioned to achieve the EV-style breakthrough. That reflects the country's leadership in the field. The Australian Strategic Policy Institute's Critical Technology Tracker puts China as number one in advanced robotics (with 34.5% of high-impact research outputs), followed by the United States (19.7%), the U.K., Italy and Germany. There is some dispute around the ASPI's methodology, but all agree that China's lead in the development of AI algorithms, when combined with its superior manufacturing capability, make that country the pacesetter in this sector. Moreover, experts note that when it comes to manufacturing, 70% of the components of humanoid robots are interchangeable with those of EVs. So once again, leadership in one field — electric vehicles — generates spillover effects in other key technologies. This is where it gets really interesting. Humanoid robots are sometimes called 'embodied AI' because they are intended to escape the two dimensions of the screen and allow their hardware to interact with the environment. In so doing, the robot learns and evolves. He Han, a member of the Chinese People's Political Consultative Conference (CPPCC) National Committee, China's top political advisory body, and CEO of Tianyu Digital Technology, told Beijing Review that 'This is an evolutionary revolution from mechanical shells to digital life forms.' He added that 'Embodied intelligence deeply integrates AI into 3D physical environments, enhancing perception, comprehension, interaction and decision-making in real-world contexts. ... It vastly expands AI's depth and breadth of understanding, enabling more scientific, rational and adaptive decisions.' It's only a slight exaggeration to call that "Terminator"-type material. But it's the second dimension of this combination of hardware and AI that should keep you up at night. An important piece of that evolution is allowing robots to design the next generation of robots, a development that will transform production. For Knuhtsen, the impact of this is 'exponential compared to their last strategic industry captures.' He explained that 'robotics systems manufacturing more robotics systems, and with each unit produced the cost will be driven down continuously and the quality will improve, only strengthening their production flywheel. This will repeat ad infinitum.' This process is under way. Tesla has a humanoid robot project, Optimus, that Elon Musk thinks could be a bigger business than his automobile venture. (Skeptics are skeptical.) Nvidia last month released GR00T N1, 'the first of a family of fully customizable models that NVIDIA will pretrain and release to worldwide robotics developers.' For industry observers, however, China is setting the pace. Unitree Robotics, a Chinese company whose models can dance, as well as do standing front and side flips, has reportedly sold two humanoid robots and other Chinese manufacturers have announced plans to produce 5,000 units this year, which is also Optimus' goal. Other Chinese companies have introduced AI models that learn from watching videos. Most significantly, Chinese supply chains are wholly domestic, uncoupled from foreign — read: U.S. — suppliers. That means that those companies capture the cost declines, a process we've already seen in the EV sector. Industry observers warn of 'a DeepSeek moment' — when China's reduced costs, forecast to fall 70% over the next five years, upend traditional economic expectations for a new technology — or 'an iPhone moment' or 'a ChatGPT moment,' shorthand for the tipping point to mass consumption, and which is expected in three to five years. And because this is a general purpose technology, one that is used throughout the economy, Knuhtsen warns that 'this time the disruption could extend far beyond a single industry, potentially transforming the labor force itself.' He concludes that this 'poses an existential threat to the U.S. as it is outcompeted in all capacities.' Color me scared. Brad Glosserman is deputy director of and visiting professor at the Center for Rule-Making Strategies at Tama University as well as senior adviser (nonresident) at Pacific Forum. His new book on the geopolitics of high-tech is expected to come out from Hurst Publishers this fall.
