Thoughts on the Market: The Rise of the Humanoid Economy

Hosted by Morgan Stanley | Release Date: May 15, 2025

In the May 15, 2025 episode of Thoughts on the Market, Morgan Stanley delves into the burgeoning field of humanoid robotics, exploring its potential to revolutionize the global economy by 2050. Hosted by Adam Jonas, Morgan Stanley's Global Head of Autos and Shared Mobility, and Shenzhong, Head of China Industrials, the discussion navigates through the current state of humanoid robots, market projections, investment opportunities, and the pivotal role of national policies in shaping this emerging industry.

1. Introduction: From Rosie the Robot to Advanced Humanoids

The episode opens with a nostalgic reference to Rosie the Robot from The Jetsons, highlighting the evolutionary leap from the simplistic mechanical butlers of the past to today's sophisticated humanoid robots. Adam Jonas sets the stage by emphasizing the next frontier in AI development: creating robots that can adapt to unpredictable environments and perform complex tasks beyond mere household chores.

"Today we're talking about humanoid robots and the $5 trillion global market opportunity we see by 2050. ... AI must become more human like or humanoid."
— Adam Jonas [00:09]

2. Current State of Humanoid Robots

Shenzhong provides an insightful overview of the current capabilities of humanoid robots, likening their developmental stage to that of a young child. While significant strides have been made in mobility—robots can now jump and run, evidenced by a recent humanoid half marathon in Beijing—their integration of advanced AI and physical dexterity still faces challenges.

"Sometimes they felt a lot of things. Maybe they break cups, glasses and even they may fall down. You definitely don't want a robot at home like that until they are safe enough."
— Shenzhong [01:10]

Despite these hurdles, progress is rapid, with Shenzhong projecting that it may take another five to ten years before humanoid robots become commonplace in homes, serving roles from household management to elderly care.

3. Market Potential and Economic Impact

Adam Jonas introduces the ambitious projection that the global humanoid robot market could reach $5 trillion by 2050. Currently, the market is in its nascent stage, with revenues in the single-digit millions. To achieve the projected market size, approximately 1 billion humanoid robots would need to be in service globally by 2050.

"This is the amount of the replacement value of actual units sold into that population of 1 billion Humanoid robots on our global TAM model."
— Adam Jonas [02:26]

Jonas further elaborates on the economic implications, suggesting that humanoid robots could substitute a significant portion of the global labor market, currently valued at around $40 trillion. This substitution could transform GDP and redefine economic structures, akin to the revolutionary impacts of the electric light or the wheel.

"These technologies ... could increase [the economy] by 5 or 10 times or more."
— Adam Jonas [03:43]

He also touches upon the moral, ethical, and national security considerations that come with such transformative technology.

4. Investment Opportunities in the Humanoid Sector

Addressing investment perspectives, Shenzhong asserts that now is the opportune time to invest in the humanoid robotics trend. The industry's rapid evolution is fueled by diverse stakeholders, including leading companies, capital investors, innovative minds, and supportive governments.

"I believe the industry will evolve rapidly. ... we should keep close eyes on the disruptors."
— Shenzhong [05:03]

Morgan Stanley's Humanoid 100 report is highlighted, identifying 100 key players across three categories: brand developers, body component suppliers, and robot integrators. Shenzhong emphasizes focusing on companies with cutting-edge technology and robust track records while remaining vigilant for emerging disruptors.

5. National Support and Policy: China Leading the Charge

Adam Jonas shifts the conversation to the role of national policies, particularly focusing on China's substantial support for the humanoid industry. Shenzhong elaborates on how the Chinese government actively sets targets, allocates resources, and fosters supply chain collaborations to accelerate industry growth.

"In the past there were successful experience in China that new industry grow with government support ... I believe China government want to replicate this success in humanoid."
— Shenzhong [06:09]

He draws parallels with previous successful government-supported industries in China, such as solar panels and electric vehicles. Additionally, Shenzhong acknowledges that other countries, like South Korea, are also ramping up their support through alliances and subsidies.

6. The US Response: Bridging the Gap

Adam Jonas reflects on the United States' response to China's advancements in humanoid robotics, likening it to a "Sputnik moment." The US is increasingly recognizing the strategic importance of maintaining leadership in AI and robotics, prompting initiatives to onshore critical industries and secure technological superiority.

"There's a real wake up call going on here. ... these technologies are ... seen as existential technology that we have to get right."
— Adam Jonas [07:34]

He underscores the necessity for the US to accelerate its efforts in AI embodiment technologies to compete effectively on the global stage.

7. Global Trends and Open Source Development

The discussion moves to the global landscape of technology development, with Shenzhong suggesting that humanoid robotics will likely follow a regional open-source trend. Different regions may develop their proprietary language models and hardware integrations, tailored to their specific applications and standards.

"I actually think this could be a global trend because for technology and especially for humanoid ... there could be regional level open source models and China will develop its own model."
— Shenzhong [08:55]

He emphasizes the importance of mass production and cost-competitiveness in realizing the software value on hardware, key to widespread adoption.

8. Future Outlook: Envisioning a Humanoid-Driven Society

Wrapping up the discussion, Adam Jonas shares a personal aspiration of having a humanoid robot handle everyday tasks, such as caring for pets, illustrating the practical and emotional impact these robots could have on daily life.

"If I can get a humanoid robot to take my dog Foster out and clean up after him, I'm gonna be pretty excited as I am sure some of our listeners will be as well."
— Adam Jonas [09:44]

Both hosts express optimism about the advancements in humanoid robotics, acknowledging the challenges ahead but reaffirming the transformative potential of this technology.

Conclusion

The episode of Thoughts on the Market provides a comprehensive overview of the humanoid robotics sector, highlighting its rapid development, colossal market potential, and the strategic investments required to harness its full economic and societal benefits. With significant national support, especially from China, and a clear pathway to integration into the global labor market, humanoid robots are poised to become a cornerstone of the 21st-century economy.

For those interested in the future of AI and robotics, this episode offers invaluable insights into the trends, challenges, and opportunities that lie ahead in the humanoid economy.