Droid Age

10 March 2026

• Once the stuff of sci-fi, AI-driven humanoid robots are rapidly moving to large scale industrial use.
• Forecasts suggest explosive growth, with potentially billions of units in the next two decades
• A productivity revolution is emerging, with huge implications for society, jobs, earnings and investors.

AI has largely dominated market sentiment since the ChatGPT moment in November 2022¹. Investors' views on the likely winners and losers have oscillated dramatically over the past couple of years, with an ever-changing and expanding list of companies deemed to be at risk from the rise of AI. 'This is the end for call centres' morphed to 'This is the end for data companies', 'This is the end for software' and 'This is the end for offices'. If ‘AI eats everything’, is this the end for anything not involved in the AI-value chain?! Concerns over intangible asset disintermediation are now shifting towards the threat of agentic AI² (worthy of a Vibe Check in due course…) but are also moving towards the ramifications for physical assets, which is the subject of this Vibe Check. This is where AI-enabled humanoid robots come into play - welcome to dystopia…

The latest robots have all the right moves, from the dance floor to the factory floor

Humanoid robots, although clearly a huge economic and investment subject, are only just starting to enter the public consciousness. This is partly because current production volumes are very low, with only around 13,000 units shipped in 2025*. Notably, production is currently dominated by Chinese companies, with AgiBot and Unitree each shipping over 5,000 units in 2025*. In total, Chinese companies presently account for around 90% of current production volumes. In the last week of February, at the annual CCTV Spring Festival Gala, the huge advances in Chinese humanoid robot technology were clearly on show with agility, balance, power and speed (Unitree Spring Festival Gala Robots). This was the first mainstream event centred on humanoid robots that attracted widespread public attention, with peak live viewership of >400 million* and huge circulation on social media.

The progress of the humanoid race

It appears increasingly likely that with growing consumer interest and with solid industrial economic logic, we may be entering a period of significant ramp in production volumes for humanoid robots. At such an early stage in their development, estimates for future production volumes have a high degree of forecast risk. Goldman Sachs have estimated >250,000 shipments in 2030 and 1.4 million by 2035³. Morgan Stanley envisage >1 billion humanoids in use by 2050⁴. Elon Musk, ever the provocateur, has commented that 'By 2040, there will probably be more humanoid robots than there are people' ⁵. Whoever's numbers you believe (if any), this is likely to be a significant growth area and this could lead to notable disruption - as well as potential investment opportunities.

Humanoids want a seat at the table (but not in the canteen)

We believe that widespread use of humanoid robots is likely to be first adopted by workforce-intensive manufacturing sectors. German-listed motion technology firm Schaeffler Technologies AG argue that humanoid robots could bring about a potential 10x improvement in productivity versus 'traditional automation'⁶, assuming a USD 60,000 eventual cost per robot and each able to replace a three-person workplace (one humanoid working three shifts) versus a USD 600,000 cost of implementing traditional automation. This should theoretically result in far greater output per worker, much higher overall productivity, and a significant boost to profit margins for companies that can replace humans with humanoids. We would envisage this could benefit areas such as civil aerospace (Airbus, for example), the auto supply chain (Valeo, among others) and capital goods in general (such as industrial conglomerate Siemens and electrical and fibre-optic cable maker Prysmian).

I, robot – piecing it all together

If, as Elon Musk asserts, we end up with more robots than humans by 2040, what does the actual construction of these robots entail, and who in the value chain will benefit? As stated above, the Chinese, alongside some American and a few European companies, will be heavily involved in constructing these robots. Schaeffler have estimated the breakdown of the bill of materials, as illustrated in the diagram below. Essentially, the major components are actuators, semiconductors, encoders, sensors, batteries and the AI functionality. There is a wide range of likely beneficiaries of the humanoid build-out. Our simple observation would be that a significant ramp-up in production is likely to benefit hardware providers disproportionately more than the AI enablers. In Europe, we see all roads leading to the semiconductor and semi-cap complex; on the former, in our view, businesses like Infineon are well placed to benefit and, when it comes to the latter, ASM and ASML. It is less clear to us whether actuator producers (Schaeffler, for example) will be able to extract as much value as one might at first glance envisage and competition from China is likely to be intense. Battery production would likely be very Asia-based (such as the Chinese companies CATL, ATL and BYD).

A positive outlook for productivity (and career counsellors)

Clearly, not everyone will be a winner. As humanoids begin to replace humans, we could see a clear transfer of value from labour to capital; raising familiar concerns that robots will be ‘taking our jobs and wages’. Corporate profit margins could benefit at the expense of wages and there may be diminishing job opportunities for 'lower-skilled' workers. It is likely that certain companies and countries that have benefitted from an inexpensive-labour-arbitrage may see this competitive advantage erode. Obvious examples may be some countries in South East Asia which Western companies have long relied on for worker-intensive supply chains. In our view, companies that produce inexpensive fast fashion may also struggle to compete as effectively as they once could.

The rising humanoid tide may not lift all boats

We may be on the cusp of a significant boost in manufacturing productivity to go alongside the huge benefits that wider AI-adoption may bring. Alongside this, labour costs will come down. We believe both of these impacts should be disinflationary and the overall impact should be faster economic growth. This may paint a positive economic picture, but it is not the whole picture. Higher unemployment could have an effect (lower consumer spending from the impacted cohort, greater stress on welfare budgets), inequality of wealth may rise and social cohesion tested. Governments would probably feel compelled to respond, perhaps via reshaping tax structure in favour of human versus robot labour. We would envisage a stronger overall economic environment, albeit not one that would be shared by all.

A new (robotic) arms race

In the humanoid age, global geopolitics is likely to be reshaped, in our view. Countries that lead in robotics, AI and semiconductor manufacturing could gain significant strategic advantages. Access to raw materials and energy may become ever more crucial. Trump’s tariff-heavy approach could serve as a possible template for how protectionist policies might evolve.

In summary

• In our view, the rise of humanoid robots, alongside growing AI adoption, could be set to drive a long-term capital expenditure boom, and is among the most important themes in our investment universe.
• While many investors may focus on the US and Asia, we believe that Europe – home to world-leading semiconductor champions and industrial powerhouses – is well positioned to capture significant potential upside.
• We believe that industrials, semiconductors, commodities and electrification companies are all be potential beneficiaries.
• Overall economic implications could be strongly positive if governments can manage the displacement of labour.
• While the wider geopolitical implications remain highly uncertain at this stage, from an investment perspective, we hold high conviction in opportunities presented by the rise of humanoid robots.

Tom O’Hara, Jamie Ross and David Barker manage European Equities strategies at GAM Investments. You can find out more information on the team here.