Artificial intelligence is undergoing a fundamental shift—from the digital world to the physical world. According to Morgan Stanley's latest global robotics model, this transformation will catalyze a global robotics hardware market worth $25 trillion. As AI technology expands from processing "bits and bytes" in the knowledge economy to manipulating "atoms and photons" in the physical economy, a "Cambrian explosion" in robotics is imminent.
Morgan Stanley's Global Embodied AI team predicts in its newly released Robotics Annual Report that, under baseline scenarios, global robotics hardware sales will surge from approximately $100 billion in 2025 to $500 billion by 2030, $9 trillion by 2040, and $25 trillion by 2050. This projection covers hardware sales alone; factoring in software services, maintenance, and supply chain-related revenues could multiply the market size.
In this transformation, China demonstrates a clear leading advantage, particularly in manufacturing capabilities, rare earth material control, and policy support. As Chinese companies accelerate mass production and deployment of robotics, the global market landscape is undergoing profound changes. Morgan Stanley believes China's leadership will likely expand over the next decade.
**Five Catalysts Driving Exponential Growth in the Global Robotics Market** Morgan Stanley's Global Robotics Model (GROM) forecasts 1.4 billion robots sold globally by 2050, with 6.5 billion operational robots worldwide.
Robots will diversify significantly, spanning industrial robots, service robots, drones, autonomous vehicles, humanoids, and household robots—covering applications from manufacturing to healthcare, agriculture, transportation, defense, and space exploration.
By 2030, Morgan Stanley estimates 90 million robots will be sold globally, rising to 600 million by 2040. Small drones and household robots show near-term market potential, while humanoid robots are expected to scale between 2029–2030.
**Surge in Key Component Demand** The explosive growth of robotics will create massive opportunities for upstream component suppliers.
By 2050, supporting 1.4 billion robot sales will require: - 5.7 billion cameras (95x growth from 2025) - 27 billion motors (260x growth) - 41 billion bearings (200x growth) - 1.25 million ExaFLOPS of edge computing power (40,000x growth) - 1.7 million tons of rare-earth magnets (480x growth) - 26 TWh of battery capacity (1,450x growth)
This demand surge presents major opportunities for suppliers of motors, bearings, rare earths, cameras, sensors, AI chips, and batteries.
Morgan Stanley identifies small drones and low-altitude robotic systems (LARS) as the most promising near-term investment areas, citing three factors: relative ease of 3D navigation, heightened government priority post-Ukraine conflict, and maturing regulatory frameworks.
**China’s Manufacturing Edge Dominates Robotics "Bodies"** The report highlights that in the embodied intelligence race, data collection and manufacturing capabilities are inseparable. To build superior robots, companies must first mass-produce "imperfect" robots for data gathering and model training. Prototyping is relatively easy, but scaling production is the real challenge.
Here, China stands out. Morgan Stanley estimates robotics and drone venture funding will exceed $30 billion in 2025, with AI-related corporate financing reaching $260 billion—Chinese firms playing a pivotal role. Among humanoid robot developers, Chinese companies like Ubtech, Xpeng Robotics, and Leju Robotics feature prominently.
China has achieved mass production and scaled applications across industrial robots, service robots, drones, autonomous vehicles, and medical robotics. Morgan Stanley expects China’s robotics sales and industry scale to outpace major economies like the U.S. and Europe over the next decade. Control over rare earths, critical components, and computing power further strengthens Chinese firms' long-term competitiveness.
By 2050, China is projected to account for 26% of global robot sales, with even higher shares in industrial robots and drones.
Earlier this year, Morgan Stanley systematically mapped 100 core listed companies in the global humanoid robot supply chain across "brain," "body," and "integrator" segments, noting China dominates with a 63% share—particularly in the "body" segment.
The firm asserts manufacturing prowess will become the core competitive edge in the embodied intelligence era, contrasting sharply with the software-and-algorithm-focused digital AI era. Data, software, manufacturing, and hardware form a recursive loop, mutually defining and accelerating progress.
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