rewrite this title From Sci-Fi to Reality: The Coming Boom of Humanoid Robots

The movie i, Robot starring Will Smith premiered back in 2004.

It’s not his best movie, but the setting is classic science fiction.

It takes place in the far-off future of 2035, in a world populated by highly intelligent humanoid robots.

Of course, what was once a far-off future is now only a decade away…

And what seemed like science fiction back then could soon end up being closer to reality than most people realize.

As I’ve said before, the robot revolution is coming.

And the speed that it’s about to hit us will likely shock you.

But it won’t be because of the increasing number of robots in factories or fast food restaurants.

It won’t even be the proliferation of robot dogs that people will find most surprising.

It’s going to be the number of robots that look a lot like us.

How Will Humanoid RobotsReshape the Next Decade?

That’s because the market for humanoid robots is growing much faster than experts first thought.

Recent research from Goldman Sachs shows that by 2035, the number of human-like robots shipped is expected to conservatively reach 1.4 million units.

That’s four times more than the company previously predicted.

And it’s roughly in line with Elon Musk’s prediction that there will be around 10 billion humanoid robots on the planet by 2040.

To put that into perspective, it’s estimated that — barring any drastic changes to the rate of population growth — 9.2 billion humans will populate the Earth in 2040.

Which means humanoid robots could outnumber humans sometime over the next two decades.

What led to this dramatic change?

Advances in artificial intelligence have surprised even the experts.

New technology called robotic large language models allows robots to learn tasks without being programmed for every little movement. This means robots can now work outside of factories and adapt to new situations much quicker.

The cost of building these robots is also dropping fast.

In 2023, a basic humanoid robot cost around $50,000, while top-of-the-line models ran up to $250,000.

Last year those prices fell to between $30,000 and $150,000 – a 40% decrease.

This happened in part because robot parts are becoming cheaper and there are more suppliers to choose from.

But just as DeepSeek showed us how AI is rapidly becoming cheaper and easier for everyone to use…

We’re seeing the same thing happen with humanoid robots as their designs keep improving.

Lower costs mean we’ll likely see humanoid robots in factories earlier than expected.

But there are already plenty of companies that use humanoid robots, especially in the automotive industry.

Honda has developed humanoid robots like ASIMO…

Source: Honda

Toyota has introduced humanoid robots like T-HR3…

Source: Toyota

And BMW, Volkswagen and Hyundai have all developed their own proprietary humanoid robots for use in their manufacturing plants to assemble vehicles and for inspection tasks.

By 2030, experts predict more than 250,000 humanoid robots will be shipped, mostly for industrial use.

But the real growth will happen in the consumer market.

According to Goldman Sachs, robots for personal use could arrive 2-4 years sooner than previously thought.

And within just over a decade, annual sales could exceed one million units as ordinary people begin bringing robots into their homes.

And I understand that might sound like a reach to you, but consider that there are already over 40 million Roomba robot vacuum cleaners in homes today…

And humanoid robots can do much more than vacuum.

Domestic robots will likely start out mostly helping with cleaning tasks and for companionship.

Their increased mobility and carrying capacity should immediately help the elderly and disabled.

But as they become more functional, it’s easy to see how they could become more useful for a variety of tasks.

Your robot helper could soon take over more complex household chores like cooking, doing laundry and mowing the lawn.

And as AI continues to develop, domestic robots could schedule appointments for you, keep track of your home’s smart appliances and generally make life easier for you.

They could even be a component of your home’s security.

In other words, over the next decade i Robot might start looking more like a historical account than a work of science fiction.

Here’s My Take

Naturally, the domestication of AI-driven robots comes with moral and ethical concerns, but that’s outside the scope of this letter.

What I’m concerned about are investing opportunities.

Goldman Sachs reports that human-like robots could be worth a whopping $38 billion by 2035.

That’s six times higher than earlier estimates of just $6 billion.

But those numbers are conservative compared to Macquarie’s estimate that the global market size for humanoid robots will reach a massive $139 billion by 2035.

That equates to a 50% compound annual growth rate.

And it’s not inconceivable. After all, Elon Musk is all-in on humanoid robots, and Tesla (TSLA) aims to be a major player in this space with its Optimus robot.

In January’s earnings call Musk said that Tesla will begin production of “several thousand” Optimus robots by the end of 2025.

And over the long term he said he believes: “Optimus has the potential to be north of $10 trillion in revenue.”

But he’ll have competition.

Boston Dynamics keeps improving its robots by leaps and bounds. It retired the hydraulic version of its Atlas robot last year and replaced it with an all-electric version that is shockingly agile.

It’s even able to do backflips.

Boston Dynamics is a private company, but Hyundai (HYMTF) is a majority owner.

And another company I’m keeping a close eye on is Figure AI.

The company calls itself: “the first-of-its-kind AI robotics company bringing a general purpose humanoid to life.”

And it’s reportedly in talks with investors to raise $1.5 billion for its work in developing these robots.

That would put the company’s valuation at nearly $40 billion, a 15x increase from its last round of funding when it was valued at $2.6 billion.

Microsoft, Nvidia, Jeff Bezos and ARK Invest are all investors in this fast-rising company…

And I wouldn’t be shocked if you’ll start hearing a lot more about them in 2025.

Regards,

Ian KingChief Strategist, Banyan Hill Publishing