Goldman Sachs Forecasts $38 Billion Market for Humanoid Robots by 2035
Goldman Sachs, the renowned investment bank, predicts a burgeoning market for humanoid robots, estimating its value to reach a staggering $38 billion by 2035. While science fiction has long promised the integration of humanoid robots into various aspects of our lives, recent advancements in AI technology have accelerated their development and propelled Goldman Sachs to revise its forecasts for this rapidly growing market. The investment bank asserts that we are on the cusp of the robot age and offers insights on how investors can capitalize on this emerging trend.
According to Goldman Sachs’ research analysts, the global market for humanoid robots is projected to experience an average annual growth rate of 70% until 2035. This growth trajectory is expected to fuel the industry’s expansion and lead to a market size of $38 billion. Building on this base case scenario, Goldman Sachs suggests that advancements in AI technology will supercharge the manufacturing supply chains for humanoid robots. However, the bank also presents more optimistic projections, envisioning one million annual humanoid robot shipments as early as 2031. In a blue sky scenario, humanoid robots could become as universally adopted as electric vehicles and smartphones, potentially replacing human companions.
Even in the worst-case scenario, where there might be technical challenges or supply constraints, Goldman Sachs only anticipates a two-year delay in the adoption of high-spec humanoid robots. Therefore, the prospects for this industry seem highly promising.
One of the catalysts driving this optimistic outlook is the remarkable progress made in AI technology, particularly in the field of end-to-end AI. This form of AI allows software systems to execute tasks independently, bridging the gap between rule-based control and autonomous decision-making. This significant breakthrough facilitates faster product development and enhances skills, enabling humanoid robots equipped with large language models to analyze and reason through images, text, and videos. The implications of these capabilities are profound and transformative, as exemplified by Tesla’s Optimus robot, which demonstrates end-to-end AI by executing commands and even folding a shirt.
Moreover, the cost of humanoid robot production has decreased more rapidly than expected. The price range for building a humanoid robot now spans from $30,000 for low-spec versions to $150,000 for high-spec models. In comparison, prices were estimated to range from $50,000 to $250,000 just a year ago, representing a significant 40% price drop (compared to Goldman Sachs’ prior assumption of a 15-20% decline). This decline is attributed to the decreasing costs of components, which is expected to continue further as existing supply bottlenecks are resolved and mass production drives increased efficiencies.
While humanoid robots are likely to initially find application in structured environments such as manufacturing, where they can fulfill dangerous, dirty, and monotonous tasks, their potential for consumer and household applications remains uncertain. There is a possibility that humanoid robots could fill roles in elder care as populations age.
Considering the rapidly evolving nature of this industry, Goldman Sachs advises investing in supply chain component stocks. Specifically, the investment bank suggests companies such as Harmonic Drive in Japan, Schaeffler and SKF in Europe, and Sanhua in China, based on their technological capabilities, existing customer coverage, and research and development initiatives.
For investors seeking broader exposure, exchange-traded funds (ETFs) focused on the robotics and artificial intelligence sectors could be an attractive option. Prominent examples include the Global X Robotics & Artificial Intelligence ETF, Cathie Wood’s ARK Autonomous Technology & Robotics ETF (which includes an 11% weighting in Tesla), and the iShares Automation & Robotics UCITS ETF for European-based investors. Additionally, the Global X Japan Robotics & AI ETF offers exposure to Japanese robotics and AI stocks.
It is important to note that while robotic ETFs have experienced negative returns in recent years, the current market conditions and the potential of the AI boom could present an opportunity for these stocks to regain momentum.
In summary, Goldman Sachs’ research highlights the immense growth potential of the humanoid robot market, which is expected to reach $38 billion by 2035. Advancements in end-to-end AI technology, coupled with decreasing production costs, are driving the industry forward. Initially, humanoid robots are likely to be utilized in structured environments such as manufacturing, replacing hazardous jobs and assisting in auto manufacturing roles. However, their potential application in consumer and household settings, including elder care, remains uncertain. Goldman Sachs advises investing in the supply chain component stocks but suggests considering ETFs for broader sector exposure. While the performance of robotic ETFs has been subpar in recent years, the prevailing market conditions could present investors with an opportunity to capitalize on this emerging and transformative industry.
