Unitree’s G1 robot at the Mobile World Congress 2025 in Barcelona, Spain, on March 6, 2025.
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American tech giants like Tesla and Nvidia are racing to develop humanoid robots, stressing their importance to the future economy. But analysts warn they are already at risk of losing out to China.
So-called humanoid robots — artificial intelligence-powered machines designed to resemble humans in appearance and movement — are expected to provide a range of use cases, such as filling industrial and service sector jobs.
Investor excitement surrounding the robots has been mounting amid increased mentions from tech leaders like Nvidia’s Jensen Huang, who ushered in “the age of generalist robotics” earlier this month when announcing a new portfolio of technologies for humanoid robot development.
In the manufacturing of the robots themselves, Tesla’s humanoid robot project, Optimus, appears to be leading in the U.S., with CEO Elon Musk announcing plans to produce about 5,000 units this year.
While Musk’s ambitious plans could give it a leg up on U.S. competitors like Apptronik and Boston Dynamics that are yet to hit the mass market, he will face stiff competition from a familiar source: China.
Jensen Huang, co-founder and chief executive officer of Nvidia, speaks about humanoids during the 2025 CES event in Las Vegas on Jan. 6, 2025.
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Hangzhou-based Unitree Robotics last month briefly sold two humanoid robots to consumers on the e-commerce platform JD.com, as per local media. Meanwhile, Shanghai-based robotics startup Agibot, also known as Zhiyuan Robotics, has matched Optimus’s goal to produce 5,000 robots this year, according to the South China Morning Post.
As Chinese electric vehicle companies like BYD begin outpacing Tesla’s growth and undercutting its prices, experts say a similar dynamic could play out in humanoid robotics.
“China has the potential to replicate its disruptive impact from the EV industry in the humanoid space. However, this time the disruption could extend far beyond a single industry, potentially transforming the labor force itself,” said Reyk Knuhtsen, analyst at SemiAnalysis, an independent research and analysis company specializing in semiconductors and AI.
Dancing on the competition?
In a research note in February, Morgan Stanley estimated that current building costs of humanoid robots could range from $10,000 to $300,000 per unit, given different configurations and downstream application requirements.
However, Chinese companies are already undercutting U.S. competitors in terms of price thanks to superior economies of scale and manufacturing capabilities, according to Knuhtsen.
For example, Unitree released its G1 humanoid robot for consumers in May with a starting price of $16,000. In comparison, Morgan Stanley estimates that the selling cost of Tesla’s Optimus Gen2 humanoid robot could be around $20,000, but only if the company is able to scale, shorten its research and development cycle, and use cost-effective components from China.
Unitree made a major splash in the robot’s space in January when 16 of its highest-performing H1 humanoid robots joined a group of human dancers to celebrate the Lunar New Year in a demonstration broadcast on national television.
But there are signs that China’s progress in robots go much further. Morgan Stanley’s February research note found that the country has led the world in patent filings mentioning “humanoid” over the past five years, with 5,688 patents compared with 1,483 from the United States.
Large players such as Xiaomi and EV makers, such as BYD, Chery, and Xpeng, are also involved in the humanoid robot space.
“Our research suggests China continues to show the most impressive progress in humanoid robotics where startups are benefitting from established supply chains, local adoption opportunities, and strong degrees of national government support,” the note said.
Beijing has increasingly backed the space, with government departments promoting their development. In 2023, the Ministry of Industry and Information Technology issued guidelines for the space, calling for “production at scale” by 2025.
According to Ming Hsun Lee, head of Greater China automotive and industrials research at BofA Global Research, China sees humanoid robots as an important industry because of their potential to mitigate looming labor shortages.
“I think in the short-term, three to four years, we will see humanoid robots initially applied in production lines to compare some workers, and in the midterm, we will see them gradually spread into the service industry,” he said.
Musk predicted that he’d have over 1,000, or a few thousand, Optimus robots working at Tesla in 2025. According to Chinese state media, EV makers like BYD and Geely have already deployed some of Unitree’s humanoid robots at their factories.
Lee said that increased adoption will coincide with a “very fast” decline in component costs, also noting that China owns around 70% of the supply chain for these components.
According to a report by SemiAnalysis earlier this month, the Unitree G1 — “the only viable humanoid robot on the market” — is entirely decoupled from American components.
The report warns that China is the only country positioned to reap the economic awards of intelligent robotics systems, including humanoid robots, which “poses an existential threat to the US as it is outcompeted in all capacities.”
“To catch up, U.S. players must rapidly mobilize a strong manufacturing and industrial base, whether domestically or through allied nations … For Tesla and similar firms, it may be wise to begin reshoring or ‘friendshoring’ their component sourcing and manufacturing to reduce reliance on China,” said SemiAnalysis’ Knuhtsen.
Bank of America analysts predicted in a research note this month that the deployment of humanoid robots will accelerate rapidly, aided by the development of AI, with global annual sales reaching 1 million units by 2030 and 3 billion humanoid robots in operation by 2060.
Co-founder and chief executive officer of Nvidia Corp., Jensen Huang attends the 9th edition of the VivaTech trade show in Paris on June 11, 2025.
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Nvidia CEO Jensen Huang has downplayed U.S. fears that his firm’s chips will aid the Chinese military, days ahead of another trip to the country as he attempts to walk a tightrope between Washington and Beijing.
In an interview with CNN aired Sunday, Huang said “we don’t have to worry about” China’s military using U.S.-made technology because “they simply can’t rely on it.”
“It could be limited at any time; not to mention, there’s plenty of computing capacity in China already,” Huang said. “They don’t need Nvidia’s chips, certainly, or American tech stacks in order to build their military,” he added.
The comments were made in reference to years of bipartisan U.S. policy that placed restrictions on semiconductor companies, prohibiting them from selling their most advanced artificial intelligence chips to clients in China.
Huang also repeated past criticisms of the policies, arguing that the tactic of export controls has been counterproductive to the ultimate goal of U.S. tech leadership.
“We want the American tech stack to be the global standard … in order for us to do that, we have to be in search of all the AI developers in the world,” Huang said, adding that half of the world’s AI developers are in China.
That means for America to be an AI leader, U.S. technology has to be available to all markets, including China, he added.
Washington’s latest restrictions on Nvidia’s sales to China were implemented in April and are expected to result in billions in losses for the company. In May, Huang said chip restrictions had already cut Nvidia’s China market share nearly in half.
Last week, the Nvidia CEO met with U.S. President Donald Trump, and was warned by U.S. lawmakers not to meet with companies connected to China’s military or intelligence bodies, or entities named on America’s restricted export list.
According to Daniel Newman, CEO of tech advisory firm The Futurum Group, Huang’s CNN interview exemplifies how Huang has been threading a needle between Washington and Beijing as it tries to maintain maximum market access.
“He needs to walk a proverbial tightrope to make sure that he doesn’t rattle the Trump administration,” Newman said, adding that he also wants to be in a position for China to invest in Nvidia technology if and when the policy provides a better climate to do so.
But that’s not to say that his downplaying of Washington’s concerns is valid, according to Newman. “I think it’s hard to completely accept the idea that China couldn’t use Nvidia’s most advanced technologies for military use.”
He added that he would expect Nvidia’s technology to be at the core of any country’s AI training, including for use in the development of advanced weaponry.
A U.S. official told Reuters last month that China’s large language model startup DeepSeek — which says it used Nvidia chips to train its models — was supporting China’s military and intelligence operations.
On Sunday, Huang acknowledged there were concerns about DeepSeek’s open-source R1 reasoning model being trained in China but said that there was no evidence that it presents dangers for that reason alone.
Huang complimented the R1 reasoning model, calling it “revolutionary,” and said its open-source nature has empowered startup companies, new industries, and countries to be able to engage in AI.
“The fact of the matter is, [China and the U.S.] are competitors, but we are highly interdependent, and to the extent that we can compete and both aspire to win, it is fine to respect our competitors,” he concluded.
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Google on Friday made the latest a splash in the AI talent wars, announcing an agreement to bring in Varun Mohan, co-founder and CEO of artificial intelligence coding startup Windsurf.
As part of the deal, Google will also hire other senior Windsurf research and development employees. Google is not investing in Windsurf, but the search giant will take a nonexclusive license to certain Windsurf technology, according to a person familiar with the matter. Windsurf remains free to license its technology to others.
“We’re excited to welcome some top AI coding talent from Windsurf’s team to Google DeepMind to advance our work in agentic coding,” a Google spokesperson wrote in an email. “We’re excited to continue bringing the benefits of Gemini to software developers everywhere.”
The deal between Google and Windsurf comes after the AI coding startup had been in talks with OpenAI for a $3 billion acquisition deal, CNBC reported in April. OpenAI did not immediately respond to a request for comment.
The move ratchets up the talent war in AI particularly among prominent companies. Meta has made lucrative job offers to several employees at OpenAI in recent weeks. Most notably, the Facebook parent added Scale AI founder Alexandr Wang to lead its AI strategy as part of a $14.3 billion investment into his startup.
Douglas Chen, another Windsurf co-founder, will be among those joining Google in the deal, Jeff Wang, the startup’s new interim CEO and its head of business for the past two years, wrote in a post on X.
“Most of Windsurf’s world-class team will continue to build the Windsurf product with the goal of maximizing its impact in the enterprise,” Wang wrote.
Windsurf has become more popular this year as an option for so-called vibe coding, which is the process of using new age AI tools to write code. Developers and non-developers have embraced the concept, leading to more revenue for Windsurf and competitors, such as Cursor, which OpenAI also looked at buying. All the interest has led investors to assign higher valuations to the startups.
This isn’t the first time Google has hired select people out of a startup. It did the same with Character.AI last summer. Amazon and Microsoft have also absorbed AI talent in this fashion, with the Adept and Inflection deals, respectively.
Microsoft is pushing an agent mode in its Visual Studio Code editor for vibe coding. In April, Microsoft CEO Satya Nadella said AI is composing as much of 30% of his company’s code.
The Verge reported the Google-Windsurf deal earlier on Friday.
Jensen Huang, CEO of Nvidia, holds a motherboard as he speaks during the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, on June 11, 2025.
The sale, which totals 225,000 shares, comes as part of Huang’s previously adopted plan in March to unload up to 6 million shares of Nvidia through the end of the year. He sold his first batch of stock from the agreement in June, equaling about $15 million.
Last year, the tech executive sold about $700 million worth of shares as part of a prearranged plan. Nvidia stock climbed about 1% Friday.
Huang’s net worth has skyrocketed as investors bet on Nvidia’s AI dominance and graphics processing units powering large language models.
The 62-year-old’s wealth has grown by more than a quarter, or about $29 billion, since the start of 2025 alone, based on Bloomberg’s Billionaires Index. His net worth last stood at $143 billion in the index, putting him neck-and-neck with Berkshire Hathaway‘s Warren Buffett at $144 billion.
Shortly after the market opened Friday, Fortune‘s analysis of net worth had Huang ahead of Buffett, with the Nvidia CEO at $143.7 billion and the Oracle of Omaha at $142.1 billion.
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The company has also achieved its own notable milestones this year, as it prospers off the AI boom.
On Wednesday, the Santa Clara, California-based chipmaker became the first company to top a $4 trillion market capitalization, beating out both Microsoft and Apple. The chipmaker closed above that milestone Thursday as CNBC reported that the technology titan met with President Donald Trump.
Brooke Seawell, venture partner at New Enterprise Associates, sold about $24 million worth of Nvidia shares, according to an SEC filing. Seawell has been on the company’s board since 1997, according to the company.
Huang still holds more than 858 million shares of Nvidia, both directly and indirectly, in different partnerships and trusts.