The Race for Humanoid Robots: China Challenges Musk’s $10 Trillion Vision

Under the bright stage lights of China’s Lunar New Year gala, more than a dozen humanoid robots whirred to life, twirling red handkerchiefs and moving in sync to folk music. The televised spectacle, viewed by over a billion people, wasn’t just an entertainment feat – it was a statement. China is making bold strides in humanoid robotics, and the world is taking notice.

For years, Elon Musk has championed the future of humanoid robots, predicting his Optimus project could become a $10 trillion industry. But as videos of Chinese robots performing roundhouse kicks, backflips, and even riding bicycles flood the internet, it’s clear the competition is heating up.

A Global Bet on Humanoids

The vision of robots seamlessly integrating into daily life – handling household chores, working in factories, and even serving as caregivers – has drawn global tech giants into the race.

In the U.S., companies like Microsoft, Nvidia, and Amazon founder Jeff Bezos have invested in humanoid startup Figure AI, while Meta is reportedly planning major investments in the field.

China, however, has taken a state-backed approach, pouring billions into the industry in an effort to replicate its success in electric vehicles (EVs). Government funding, ambitious policy targets, and a relentless push for mass production have positioned Chinese firms as formidable challengers to Tesla, Boston Dynamics, and Figure AI.

“Everybody will need them, like automobiles, like cellphones,” said Xi Ning, a robotics professor at the University of Hong Kong. The potential market, he noted, is vast.

Goldman Sachs projects that by 2035, the humanoid robot market will be worth $38 billion, with consumer adoption expected to surge within a decade.

China’s Strategic Push

Unlike its Western competitors, China dominates industrial robotics, deploying more than the rest of the world combined since 2021, according to the International Federation of Robotics.

While industrial robots perform repetitive tasks in manufacturing, humanoid robots require more advanced AI and precision engineering. Though China entered the humanoid race later than the U.S., it is rapidly closing the technology gap.

Beijing has aggressively funded research and development, with local governments in major cities like Beijing, Shanghai, and Shenzhen committing at least 73 billion yuan ($10 billion) to robotics investments. In 2023, China’s Ministry of Industry and Information Technology set a goal for mass-producing humanoid robots by 2025.

Last month, President Xi Jinping chaired a high-profile meeting attended by top business leaders, including Unitree CEO Wang Xingxing, whose company created the viral dancing robots. The meeting underscored Beijing’s belief that humanoid robotics could drive China’s next wave of economic growth.

The Cost Advantage

China’s robotics firms aren’t just catching up – they’re disrupting the industry with lower prices.

Shenzhen-based Engine AI launched its PM01 humanoid for just 88,000 yuan ($12,175), while Unitree’s G1, capable of executing complex movements, followed at 99,000 yuan ($13,697).

By comparison, Musk has estimated that Tesla’s Optimus could cost between $20,000 and $30,000, making China’s offerings significantly more competitive.

With experience from EV manufacturing, firms like BYD and XPeng are leveraging their supply chain expertise to drive costs down and scale production up – a strategy that could accelerate the commercial viability of humanoids.

Challenges on the Road to Domination

Despite its momentum, China still lags behind in critical technologies.

A Morgan Stanley report notes that while 56% of the global humanoid robot supply chain is based in China, the country remains dependent on foreign-made components, including:

AI chips, crucial for perception and movement (dominated by Nvidia)
High-precision sensors (mainly from Japan, Europe, and the U.S.)
Robot operating systems, essential for software integration

U.S. restrictions on advanced semiconductor exports have further complicated China’s efforts to develop self-sufficient AI chips, pushing Beijing to ramp up domestic production.

However, experts say Chinese suppliers are already working with Tesla by sending prototype components for testing. Over time, lessons learned from Tesla’s feedback could enhance China’s own humanoid robotics industry.

A Solution to China’s Demographic Crisis?

Beyond economic ambitions, China sees humanoid robots as a potential solution to its shrinking workforce.

The country’s population has declined for three consecutive years, raising concerns about labor shortages in the future. If humanoid robots can fill gaps in industries like healthcare, manufacturing, and elderly care, they could play a critical role in maintaining economic stability.

“If humanoid robots can be scaled and deployed widely across the economy, they could help alleviate the labor gap,” said Brady Helwig, associate director at Special Competitive Studies Project, a U.S. think tank.

The Future of the Humanoid Race

While widespread adoption of humanoid robots may still be five to ten years away, their rapid advancement suggests a future where they become as commonplace as smartphones or electric cars.

With Tesla, Figure AI, and Boston Dynamics leading in AI innovation and software capabilities, and China racing ahead in affordability and mass production, the humanoid robotics industry is on the verge of a major transformation.

Whether Musk’s $10 trillion vision will become reality – or whether China will outmaneuver him on cost and scale – remains to be seen. But one thing is certain: the race to build the robots of the future is well underway.