Humanoid Hype: Top VC Sounds the Alarm on China’s Robot Boom
As humanoid robots take center stage in China’s tech frenzy, a prominent venture capitalist is sounding the alarm — calling the billion-dollar sector overheated, commercially shaky, and ripe for a bubble.
Zhu Xiaohu, a prominent early-stage investor at GSR Ventures known for backing unicorns like the ride-hailing giant Didi, food delivery platform Ele.me, and lifestyle app Xiaohongshu, better known as RedNote abroad, said he’s pulling back from humanoid robotics.
“Who are their potential clients?” asked Zhu in an interview with consultancy ChinaVenture published recently, citing a lack of viable commercial applications for embodied AI — artificial intelligence embedded in physical systems like robots — at the current stage. “Who would spend tens of thousands (of yuan) to do these tasks?”
Beyond concerns over commercialization, Zhu also warned that the humanoid robotics sector suffers from a high degree of homogeneity across companies and inflated valuations fueled by hype.
“I often joke that nowadays, every humanoid robot can do summersaults — but where is the commercialization?” he said, adding that it’s a space early-stage venture capitalists should avoid or exit altogether.
Beyond his track record, Zhu’s comments also carry weight because of his history of stepping back when he sees hype outpacing fundamentals. In 2017, he famously exited the bike-sharing firm Ofo at the height of the sector’s boom, warning of unsustainable business models. The company collapsed soon after.
Zhu’s blunt skepticism has sparked debate among investors and entrepreneurs. While many acknowledge signs of a bubble in the humanoid robotics space, they differ on whether it will harm the sector’s long-term potential.
Zhang Ying, founding partner at early-stage VC firm Matrix Partners China — an investor in humanoid robotics startup Unitree — argued that bubbles are a natural part of emerging industries. “Over time, humanoid robots will undoubtedly produce great companies,” he wrote in a recent post on messaging app WeChat.
Others, however, share Zhu’s concerns. Supporters say the current bubble could hurt the sector by inflating expectations and diverting resources.
Cheetah Mobile founder Fu Sheng drew a comparison to the dot-com bubble of the early 2000s. “That bubble came decades after the internet first appeared — by then, the technology and real-world applications had matured,” he said in a recent video post. “But humanoid robots are still far from that stage.”
Fu pointed to a deeper risk: too much funding is chasing crowd-pleasing features like dancing robots or patrol dog bots — often remotely controlled — while key capabilities such as voice interaction or autonomous operation remain underfunded.
In recent years, China’s robotics industry has drawn increasing interest as the country pushes to become a global leader in advanced technologies, including AI and automation.
The growth is fueled by strong government backing, a robust tech ecosystem, and rising demand for automation in sectors ranging from manufacturing to healthcare and entertainment. Companies like Unitree and DeepRobotics have become standards in this space.
Globally, humanoid robotics attracted more than 11 billion yuan ($1.5 billion) in funding across 69 deals in the first 10 months of 2024, according to data from the Gaogong Industrial Institute. Of that, Chinese companies accounted for over 5 billion yuan in 56 cases.
Editor: Apurva.
(Header image: At a humanoid robot training facility in Shanghai, March 20, 2025. VCG)
