XPeng AI Humanoid Robot IRON

AsianFin -- Despite growing skepticism from some prominent investors, Chinese local governments are doubling down on humanoid robotics and embodied intelligence, pouring more than 70 billion yuan ($9.7 billion) into the sector through newly launched state-backed funds.

The latest move came from Beijing Yizhuang, where local authorities announced the establishment of a 300 million yuan humanoid robotics fund. The fund, a partnership between Beijing Yizhuang Investment Co., Beijing Yizhuang Robotics Technology Industry Development Co., and Beijing Industrial Development Investment Management Co., will target robotics and intelligent manufacturing companies within the capital’s economic development zone.

The announcement follows the buzz created by the inaugural "Human-Machine Marathon," underscoring China's ambitions to seize leadership in the emerging humanoid robotics sector.

Other major Chinese cities are also racing to build war chests aimed at fueling robotics innovation. In Shanghai, the Shanghai Embodied Intelligence Innovation Venture Investment Partnership recently closed its first round at 560 million yuan, with a 1 billion yuan fundraising target. Backed by state-owned investors including Pudong Venture Capital and Zhangjiang Group, the fund plans to leverage the Zhangjiang Robotics Valley to advance research in embodied intelligence systems, core components, and general-purpose robots.

According to incomplete statistics from TMTPost Focus AGI, more than 10 local governments — including Beijing, Shanghai, Shenzhen, Suzhou, and Chengdu — have established or are preparing humanoid robotics investment vehicles, with individual fund sizes ranging from 200 million yuan to as much as 10 billion yuan.

Highlights include:

Beijing: 10 billion yuan Robotics Industry Fund established in December 2023.

Shanghai: 10 billion yuan Humanoid Robotics Industry Fund launched by Pudong District in 2024.

Shenzhen: 10 billion yuan AI and Robotics Fund unveiled in February 2025.

Suzhou: 10 billion yuan Robotics Investment Fund focused on building a national robotics innovation hub.

Chengdu: 10 billion yuan Artificial Intelligence and Robotics Fund registered in October 2024.

Nanjing, Shaoxing, Wuhan, Hebei, Tangshan, Hefei, and Chongqinghave all announced multi-billion-yuan investments targeting robotics and intelligent systems.

The surge in state-backed capital comes at a time when skepticism about the sector’s near-term viability has been rising.

Earlier this month, Zhu Xiaohu, managing partner at GSR Ventures, warned via the TMTPost App of a "mass exit" from humanoid robotics, citing unclear commercialization prospects. "Highly concentrated market consensus with no clear business model is what we fear the most," Zhu said, adding that GSR Ventures has historically struggled to profit from such sectors.

But contrary to Zhu’s outlook, state-owned investors appear undeterred. Officials from Yizhuang Investment say the newly launched fund has already conducted in-depth research on 17 companies across critical verticals — including robot bodies, key components like reducers, semiconductor equipment, large AI models, and unmanned systems. Due diligence has begun for the first batch of investments.

Beijing Yizhuang’s robotics cluster already houses more than 300 enterprises, with a combined industry output exceeding 10 billion yuan — half of Beijing’s total.

However, insiders warn that not all that glitters is gold. Huang Xiaoqing, founder and CEO of CloudMinds Robotics, pointed out that some startups secure massive funding with little more than a few PowerPoint slides, leading to low valuations and significant equity stakes for early investors. Huang cautioned that "micro-level" capital attitudes within China have become increasingly conservative toward truly pioneering companies.

At a recent embodied intelligence forum, experts stressed that while a "bubble" does exist, it does not negate the sector’s long-term value. "As long as the general direction is right, embodied intelligence can achieve practical applications — particularly in hazardous environments — within the next three to five years," said Yan Weixin, associate professor at Shanghai Jiao Tong University.

On the technology front, Chinese researchers believe they have closed much of the algorithmic gap with U.S. rivals, though disparities in computing infrastructure, particularly compared to NVIDIA's CUDA ecosystem, remain.

Meanwhile, corporate giants are moving forward with real-world applications. Lenovo Group recently partnered with Tsinghua University’s Palace Museum Cultural Heritage Center to integrate its six-legged robotic dog into preservation efforts at the Yingxian Wooden Pagoda, demonstrating early examples of embodied AI adoption.

Lenovo’s Mao Shijie, Vice President and Head of the Shanghai Research Institute, said today's AI models are nearing Turing Test-level capabilities, ushering robots into what he called the "3.0 era," where perception, decision-making, and interaction abilities are dramatically enhanced.

Industry leaders also see a two-track strategy emerging for embodied AI: specialization in scenario-specific applications, and diversification into non-traditional robot forms like robotic dogs.

Looking ahead, humanoid robots are expected to evolve beyond simple task automation. Experts envision robots capable of both mastering technical functions and engaging emotionally with humans in settings like elder care, commerce, and hazardous operations — marking a pivotal leap forward for embodied intelligence.