China's AI humanoids set to reshape manufacturing

The Sun

13-05-2025

SHANGHAI: In a sprawling warehouse in a Shanghai suburb, dozens of humanoid robots are manoeuvred by their operators to carry out tasks like folding a T-shirt, making a sandwich and opening doors, over and over again.
Operating 17 hours a day, the site's goal is to generate reams of data that its owner, Chinese humanoid startup AgiBot, uses to train robots it hopes will become ubiquitous and change the way humans live, work and play.
'Just imagine that one day in our own robot factory, our robots are assembling themselves,' said Yao Maoqing, a partner at AgiBot. The importance of humanoid robots to Beijing, as it looks for solutions to pressing issues including trade frictions with the US, population decline, and slowing growth, was underscored when Chinese President Xi Jinping inspected AgiBot's robots in Shanghai last month. Xi jokingly remarked during the visit that perhaps the machines could play in a football team. Another domestic developer of humanoid robots Unitree, was also present in a meeting Xi hosted for private firms earlier this year, where he urged them to help China's economy.
As the US negotiates with China over tariffs that President Donald Trump had imposed to help bring back US manufacturing jobs, Beijing is aiming for a new industrial revolution where many factory tasks would be performed by humanoid robots. In recent years, Chinese humanoid robots have demonstrated increasing feats of agility including performing somersaults, running a half-marathon, and even playing football, as Xi mused. But Reuters is reporting for the first time details about how China's advances in artificial intelligence, partly driven by the success of homegrown firms like DeepSeek as well as abundant government support, are allowing humanoid developers to pair the robots' already impressive hardware with the software needed to make them economically valuable.
Reuters spoke to more than a dozen people including Chinese humanoid manufacturers, investors, customers and analysts, who described how breakthroughs in developing robot 'brains' will allow these metallic machines to go from mere spectacles to productive and autodidact workers that could revolutionise the world's pre-eminent manufacturing power. China aims to build its edge by focusing on data training and the sophistication of its AI models, the people said, with some saying the prowess of DeepSeek was a big aid.
DeepSeek and the Chinese government didn't respond to requests for comment about their roles in the development of humanoid robots. A successful and widespread deployment of these robots in factory floors would enable China to keep driving economic growth and maintain its manufacturing superiority, making the field an area of competition with the US
Less clear is how Beijing plans to manage the looming threat of mass factory worker layoffs. State media has suggested that, as with previous industrial revolutions, the long-term gains in job creation and economic transformation would ultimately outweigh the short-term disruptions and hardships.
Chinese authorities are handing out generous subsidies for humanoid firms. More than US$20 billion (RM86 billion) has been allocated to the sector over the past year, and Beijing is establishing a one trillion yuan (RM588 billion) fund to support startups in areas such as AI and robotics, official announcements show.
The government is also a key buyer, according to a Reuters review of hundreds of tender documents. State procurement of humanoid robots and related tech jumped to 214 million yuan in 2024 from 4.7 million yuan in 2023.
Other state support includes a newly created 10 billion yuan AI and robotics fund by the southern city of Shenzhen.
Humanoid robot makers and component suppliers based in Wuhan are eligible for subsidies of up to 5 million yuan after reaching thresholds for procurement and sales targets, as well as free office space.
Beijing's municipal government created a robotics fund in 2023 that offered up to 30 million yuan for companies looking to accelerate construction of their first products. Some analysts predict that humanoids could follow the trajectory of electric vehicles, whose costs tumbled dramatically over the past decade as manufacturers rushed in and government subsidies spurred widespread adoption among the Chinese public.
The average bill of materials for a humanoid will be about US$35,000 by the end of this year but could fall to US$17,000 by 2030 if most of it is sourced from China, said Ming Hsun Lee, head of Greater China automotive and industrial research at Bank of America Securities, in a research note. Three Chinese humanoid manufacturers told Reuters they predicted a similar halving of costs, perhaps within a year. In comparison, the component cost for Tesla's Optimus robots, if all of their major parts are sourced from outside China, is currently US$50,000 to US$60,000, Lee added in the note. Tesla didn't respond to a request for comment.
'With its comprehensive supply chain, China has an edge in lowering the humanoid robot production cost significantly,' Lee told Reuters, estimating that global humanoid robot annual sales could reach 1 million units in 2030. 'This industry is still in its baby boom stage.'
The Chinese government is also investing heavily in data collection, which several executives said was the industry's main pain point but also an area where China had an advantage.
In comparison to generative AI, where tech companies have trained foundation models by drawing from massive online datasets of text, pictures and audio, the supply of data necessary to train AI models used to run humanoid robots, also known as embodied AI platforms, is far smaller.
Humanoids need to interact with a physical environment and train on datasets focused on tasks, such as stacking boxes or pouring water into a cup.
Last year, Shanghai authorities assisted in setting up AgiBot's data collection site, providing premises rent-free where about 100 robots operated by 200 humans work every day.
AgiBot's facility enables it to collect high-quality, targeted data, which it can use to train its embodied AI model, said Yao.
Similar sites are being built by governments in Beijing and Shenzhen, according to announcements.
Widening deployment of humanoids, especially into factories, is likely to accelerate data collection.
MagicLab, another humanoid startup, said in an interview that its focus on the robots' brains has allowed it to recently begin deploying prototypes in production lines for tasks such as quality inspection, material handling, and assembly. 'These breakthroughs lay the foundation for our focus in 2025 on real-world applications,' said CEO Wu Changzheng, adding that MagicLab has integrated its robots with AI models like DeepSeek, Alibaba's Qwen, and ByteDance's Doubao. – Reuters