The East is building the machines
China’s physical AI story is different in character–and arguably more visceral. At this year’s Spring Festival Gala, humanoid robots from multiple Chinese startups performed kung fu routines, aerial flips, and choreographed dances before hundreds of millions of viewers–a sharp contrast from the stumbling prototypes that drew scepticism just a year prior.
It was a spectacle, yes. It was also a statement. China accounted for over 80% of global humanoid robot installations in 2025 and over half of the world’s industrial robots. That dominance is underpinned by structural advantages that go beyond software. China controls roughly 70% of the global lidar sensor market, leads in harmonic reducer production–the gears critical to robot movement–and has driven hardware costs down through the same economies of scale that propelled its EV industry.
Alibaba has entered the race with RynnBrain, an open-source AI model designed to help robots comprehend the physical world and identify objects–positioning itself alongside NVIDIA’s Cosmos and Google DeepMind’s Gemini Robotics in the foundation model layer. With over 140 domestic humanoid manufacturers and more than 330 humanoid models already unveiled, China’s push into embodied AI is no longer experimental–it’s commercial.
Why it matters beyond the headlines
The convergence of Western platform strategies and Eastern manufacturing scale is creating something genuinely new: a global physical AI ecosystem that is advancing on multiple fronts simultaneously, with different competitive advantages colliding.
What makes this moment distinct from prior robotics waves is the removal of the expertise bottleneck. Historically, deploying industrial robots required specialised engineering teams, months of custom programming, and a high tolerance for downtime. The platforms being built now–by Google, Nvidia, Siemens, and their Chinese equivalents–are explicitly designed to lower that barrier.
Companies like Vention, which raised US$110 million in January, claim their physical AI platforms can reduce automation project timelines from months to days. When that claim becomes routine, the economics of manufacturing change structurally.
There is also a geopolitical dimension that sits quietly beneath the product announcements. Every foundation model for robotics, every platform layer, every semiconductor architecture being developed right now carries with it questions of supply chain dependency, data sovereignty, and long-term infrastructure control.
The country–or company–that governs the software layer of physical AI will have unusual leverage over industrial operations globally for years to come.
Physical AI is not a trend. It is the next significant reconfiguration of how the world makes things, moves things, and operates at scale. The conversations happening now–from semiconductor boardrooms to factory floors in Shenzhen and Silicon Valley–are not preliminary. They are the thing itself, already underway.
(Photo by Hyundai Motor Group)
See also: Goldman Sachs and Deutsche Bank test agentic AI for trade surveillance
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