The United States and China are among the most closely watched countries in the emerging robotics race, although Japan represents a larger market than America in terms of its operating inventory of industrial robots. But that’s not really surprising, when you look at the broader AI race.
Competition, talent, and funding for AI models have been largely focused on the United States and China. But in this region, the United States clearly dominates China.
America attracted $109.1 billion in private funding for AI two years ago, versus $9.3 billion in China, although Beijing is partly offsetting a decline in private funding for government-led initiatives. The Era Capabilities Index showed that Chinese AI models have lagged behind US models since 2023 by an average of seven months.
The founders of artificial intelligence in the United States have been vocal about this topic. But the story is different when it comes to physical AI. Both tech nations are racing to lead the global robotics industry, but the goal lines appear to differ from country to country.
It’s too early to pick winners, however, as China is already doing better than the United States in numbers Operating industrial robots. It makes sense quickly when you look at what’s happening in the Chinese robotics ecosystem.
The state of the Chinese robotics ecosystem
China installed nearly 10 times more robots in its factories last year than the United States. The Chinese are expanding rapidly and making a large number of cheap robots, forcing American robotics companies, including South Korean ones, to impose tariffs to level the playing field for domestic manufacturers.
that Insight by Zhang Chia writer covering Chinese politics, society, and technology, explains why China is moving at this pace.
The result is that Beijing is keen to pursue robotics, or “embodied intelligence” as described in Chinese policy documents, even down to the provincial level.
Interest in robotics in China swelled right after the government began introducing embodied AI in its research paper, which it did in its latest “Five-Year Plan (2026-2030),” reviewed by the National People’s Congress earlier this month. Che wrote that professors were transformed into automatons. Students and venture capital wanted consulting. Even officials were equally keen on bringing robots to their areas.
It has turned into a kind of competition between local governments, with officials supporting local businesses for their own personal interests, since career advancement within the Communist Party is highly linked to measures of economic performance, such as GDP, investments, and industrial production, among others.
In one case, Chi mentioned Victor Wang, co-founder of PsiBot, who got unsolicited offers from municipal governments to help him set up remote operations centers to train robots. The collective outcome of competition between governments adds responsibility, if not alone, for the rapid development of robotics we see today in China.
But why is China turning to robots?
There are two reasons that immediately come to my mind, and they were even mentioned in government newspapers. The first is labor shortages, and the second is industrial automation.
China is facing one of the fastest rates of population aging in history. Moreover, its population continues to decline. Reuters reported a third consecutive decline in population in 2024, which means fewer workers and consumers overall. The country is expected to face a shortage of 50 million blue-collar workers. So, it is looking to industrial and humanoid robots to fill the roles that young people no longer want to work in.
The demographic crisis is closely linked to why China is also pursuing industrial automation, which is where Chinese robots are finding the most application — 295,000 robots were installed in Chinese factories last year, the highest annual total on record, according to the International Federation of Robotics.
China makes more useful industrial robots than it does for other purposes, and there’s a reason why. Beijing’s focus is on making trading robots that can find practical application in the real world. Remember, there are reasons why the government is aggressively pursuing robots in the first place.
There are marketing requirements tied to the financing provided to Chinese robot makers, Chi wrote. So, they can’t afford to chase crap, so to speak. This is where China differs from the United States in the global robot war.
The United States and China have different goal lines
For China, the focus is on making robots that are marketable and fit into the real economy. Chinese manufacturers mostly build humanoid robots and industrial robots that can perform one specific task very well, whether it’s mounting and handling car parts, sorting items, welding, or assembling parts.
However, the United States is racing toward general-purpose robots, humanoid robots capable of competing with humans, with a focus on homes and manufacturing. Figure 03, humanoid robot She accompanied US First Lady Melania Trumpto an event at the White House, is one example.
Figure 03 was created by Shape AI. The Chicago-based robotics company introduced the robot, its third generation of robots, in October for use in home environments and handling high-volume manufacturing. Tesla’s Optimus takes a similar direction, although the primary focus will be on the factory. Elon Musk said home use of Optimus would follow the success of the factory.
I’ve been working on my character pic.twitter.com/u7trMda7eM
— Tesla Optimus (@Tesla_Optimus) September 6, 2025
There’s a lot of promise with Optimus. Musk said in February that Optimus would be the “biggest product ever” and would make up 80% of Tesla. He went on to say that the solar-powered Optimus+ PV would become the first real version of sci-fi robots capable of replicating themselves with materials from space.
While the Chinese are already deep into deployments, the United States is only preparing for commercial production. Figure AI launched a large-scale manufacturing facility, BotQ, last year, with the capacity to manufacture up to 12,000 humanoids per year. Tesla is gearing up for its first production line later this summer. It aims to manufacture one million robots per year when large-scale production begins in 2027.
It also seems like most big-name US companies are mostly pushing humanoid robots as their main products. Aside from Figure 03 and Optimus, there are humanoids like Digit from Agility Robotics and Apollo from Apptronik. Boston Dynamics now also has an Atlas system. Earlier this year, OpenAI was reported to be building its own human lab.
It remains to be seen how successful the United States will be in pursuing general-purpose robots, but colleagues like Mark Cuban are not particularly optimistic. Cuban said during a live broadcast with TBPN that he believes humanoid robots “may have a lifespan of 5 years, and then they will fail miserably. Maybe 10.”
