China’s Embodied AI Robotics Surge Past 2024 Funding Levels
From January to May, China’s robotics startups secured CNY23.2 billion (USD3.2 billion) in funding, surpassing the total raised in all of 2024. Market research firm IT Juzi reported that 87 percent of this capital flowed into companies developing embodied artificial intelligence—systems that integrate AI into physical machines such as humanoid and quadruped robots.
One standout case was Yunshenchu Technology, a quadruped robot manufacturer whose latest financing round brought in ten times more than anticipated. Humanoid robot specialist Unitree Robotics took a more selective approach, conducting an invite-only fundraiser that left many investors unable to participate. “Venture capital firms are being driven by FOMO—the fear of missing out—to grab a seat at the table,” said Liu Tianjie, managing director of Huaying Capital. He cautioned, however, that early-stage success rates remain low, and even strong players like Hangzhou-based Unitree must prove their business models over time.
Liu noted an unusual trend: major corporations are entering the sector while it is still in its formative stage. Internet giants Meituan, ByteDance, Alibaba Group Holding, and Tencent Holdings have joined forces with carmaker BYD and battery leader Contemporary Amperex Technology as early investors. These companies, he explained, are aligning investments with strategic business needs despite the absence of proven large-scale commercial applications.
Yet founders of many Chinese robotics startups argue that valuations remain disproportionately low compared to U.S. counterparts. Wang Qian, founder of Independent Variable Robot Technology, highlighted that American firms Figure AI and Physical Intelligence are valued at about USD39 billion and USD2.4 billion respectively, while China’s leading robotics companies are worth only hundreds of millions. “The technical capabilities of China and the United States in embodied AI are not too far apart and the Asian country has a superior supply chain, so the valuation gap is unjustified,” Wang said.
Wang drew on his experience in both the U.S. and Shenzhen to illustrate supply chain advantages. In Shenzhen, customizing a component can take mere days, whereas similar work overseas may require months. Data collection costs in China are also significantly lower than in Europe or the United States, further strengthening the case for competitive valuations. According to Wang, undervaluation slows sector growth by discouraging heavy investment in foundational model research and development.
Chen Jianyu, founder of Xingdong Era Technology, argued that embodied AI and humanoid robotics firms deserve higher valuations than smart car manufacturers and large language model developers. However, he acknowledged that the robotics sector has yet to match the scale of the smart car industry, largely because it has not identified a core commercial application capable of driving mass adoption. Chen suggested that once a leading player achieves commercial scale, the industry could see a second wave of valuation growth.
Entrepreneurs are capitalizing on the current investment momentum to raise funds and prepare for public listings. Wang noted that Woan Technology, Standard Robots, and MegaRobo began IPO processes last month. With government policy increasingly supportive of embodied AI and several firms approaching IPO readiness, Liu predicted that three to five companies could go public within the next three years.
The convergence of capital, corporate interest, and supply chain advantages is reshaping China’s robotics landscape. While commercial applications remain elusive, the rapid funding surge and strategic positioning by both startups and established industry players suggest that embodied AI is entering a critical phase of development.
