Key Takeaways:
Humanoid robots will transform from a $2 billion niche to a $200 billion industry within a decade, reshaping labor markets and creating trillion-dollar investment opportunities.
The humanoid robotics market will surge from about $2 billion today to $200 billion by 2035, Barclays predicts, as physical AI fills structural labor gaps created by aging populations and changing job preferences.
"It's the decade of the robot," Zornitza Todorova, head of thematic FICC research at Barclays and co-author of the bank's "AI Gets Physical" report, told CNBC's "Squawk Box Europe."
The report forecasts two waves of deployment: the first through 2030 in manufacturing, logistics, agriculture and construction, and a second wave after 2030 in healthcare, elderly services, education and hospitality. China dominates production, accounting for 85 percent of humanoid installations last year and producing robots at roughly half the cost of Western competitors — typically about $50,000, according to Barclays. The country installed nearly 300,000 industrial robots last year, compared with 34,000 in the US.
Wedbush Securities analyst Dan Ives said the market could be worth trillions of dollars over the next decade, calling humanoid robots "the golden goose for physical AI." The opportunity has drawn major players including Tesla, which halted Model S and Model X production to repurpose its Fremont factory for the Optimus humanoid, targeting annual capacity of about 1 million units. OpenAI also entered the race, announcing a new robotics division focused on skilled labor and infrastructure applications.
The competition is intensifying rapidly. Softbank CEO Masayoshi Son told CNBC that physical AI and robotics represent where the next trillion-dollar company will emerge. Jason Pidcock, who manages the 2.75 billion-pound ($3.69 billion) Asian Income fund at Jupiter, said that in 10 years "the world will be completely different" thanks to robotics, with humanoid robots in factories, homes and government departments.
China's cost advantage reshapes the playing field
China's dominance in both production and deployment creates a structural cost advantage that Western competitors will struggle to match. The country has lifted robot density by 600 percent to nearly 500 robots per 10,000 workers since 2016, Barclays data shows. Chinese manufacturers produce humanoids at roughly $50,000, about half the cost of Western alternatives, giving them a pricing edge as the market scales.
Tesla plans to unveil Optimus Gen 3 between late July and early August, coinciding with the completion of its Fremont factory conversion. The company's Q1 disclosure revealed a $2 billion investment in SpaceX, as both entities collaborate on shared infrastructure projects including a Texas-based chip manufacturing facility. Ives has assigned an 80 percent likelihood to a Tesla-SpaceX merger occurring in 2027.
Where investors can find exposure
For investors, the humanoid robotics theme offers exposure through both public and private markets. Ives noted that the core leading companies in the space remain private, but public plays include Tesla, Nvidia and Asian suppliers such as TSMC, Foxconn and Samsung. Pidcock's Asian Income fund, which gained 49.2 percent in the year to April, holds Mediatek, TSMC, Samsung, Foxconn, ST Engineering and Singtel as top positions.
"The big opportunity in Western markets is going to be when physical AI reaches services-oriented roles," Todorova said, noting that services generate most of the economic growth in the West. Barclays sees the second wave of deployment after 2030 as the larger opportunity, with robots moving from factories into homes, hospitals and schools.
This article is for informational purposes only and does not constitute investment advice.
