Business Insider Robots that can replace human workers may be closer than ever because of the AI boom. Here's how some investing pros are getting in early on the trend.
- Humanoid
- We spoke to investing pros about how to think about the theme and ways to invest.
My conversation with KraneShares, the company behind the first US humanoid ETF, KOID, began with a demonstration of two Unitree Robots dancing in a Midtown Manhattan office.
Over Zoom, the synchronized dance looked computer-generated, though Joseph Dube, head of marketing at Krane Shares, noted that they don't look particularly real in person either.
Yet, there's a real possibility that humanoid robots become an "economically viable" replacement for some forms of labor, minting huge returns for investors who manage to get in early, said Krane Shares CIO Brendan Ahern.
Morgan Stanley predicts that humanoid robotics will be a $5 trillion business by 2050, with more than a billion robots walking the earth. The numbers are a bit less colossal in the near future, but still portend real growth, with Barclays predicting a potential $200 billion humanoid market by 2035.
Stephanie Link, CIO of $353 billion wealth manager Hightower, said she's recently started investing in the space, and is advising clients to take a closer look. If generative AI is in the third inning and the cybersecurity ripples it's caused are in the second inning, humanoid robots "haven't even stepped into the batter's box," she said.
Her interest was kicked off by Amazon CEO Andy Jassy's 2025 shareholder letter, which touted the company's million robots.
"If one of the biggest companies in the world is seeing massive efficiencies, with robots in half of their distribution facilities, then the number of robots is going to go much higher over the long haul," Link said. "We haven't even scratched the surface yet."
The thesis #
Labor is the heart of the thesis underpinning investments in humanoid robotics. The technology could replace some—or even all — of what a human does in some industries, helping business owners avoid labor shortages in hard-to-fill, physically-demanding jobs as the population gets older.
Generative AI has then been the "nitrous oxide" that's caused the industry to accelerate, Ahern said, and while robots have long changed the face of American manufacturing, AI promises a more autonomous future.
Meanwhile, breakthroughs in battery technology and the actuators and other mechanical components that facilitate movement have caused the price of a humanoid robot to drop nearly 30 times in the last decade, according to Barclays.
Suddenly, the promise of a robot that's more efficient than a human worker comes into view:
It can work nearly all day long, as long as you have back-up batteries (most max out between 4-6 hours) and won't complain, organize a union, or look for a new job. Even if a robot were only half as efficient as a worker in an hour, it would deliver 25% more output a day, according to Barclays.
China is the global leader in humanoid robots. This year, a robot set a global half-record marathon in Beijing, and the country offers a vision of what the near-future might hold. Ahern, whose firm launched a global electric-vehicle ETF in 2017 as the Chinese EV industry was taking off, said that travels to Asia helped inspire the humanoid robot ETF.
"You're not necessarily seeing humanoids walking down the street yet, but there are many little examples of them," Ahern said, listing off a room-service drone, driverless wheelchairs, and robotic baggage handlers in Japanese airports, or robotic waiters in Hong Kong restaurants, as things he and his firm has seen firsthand.
"This will be a global phenomenon," he said.
How to invest #
Investing in the thesis isn't as simple as just buying one company. Instead, experts recommend diversifying because of the breadth of the changes at the early stages of development.
There will be businesses that manufacture robots directly, those that make their component pieces, and the generative AI companies that will power their brains. There will also eventually be businesses to service the robots. Auto service costs exceeded $164 billion in 2025, according to Deutsche Bank, providing an idea of how large these ancillary businesses can grow.
There's also the cost-saving impact that robotics would eventually have on industrial, logistics and manufacturing businesses. Amazon, which develops its own robots but also uses them to manage the workload in their fulfillment warehouses, is a great example of a company that will be exposed to both the manufacturing and labor-saving elements of humanoids.
Another segment that's already being transformed by this technology is defense, with autonomous drones becoming one of the most important weapons on the modern battlefield.
And of course, like AI, adoption will rely on large amounts of power and rare earth minerals to create the chips and technical components of the humanoids.
These dynamics make diversified vehicles, like ETFs, popular ways to invest, with these thematic bets delivering 25% year-to-date returns as of early July, according to Deutsche Bank.
KOID, Ahern's firm's ETF, is the largest diversified ETF, with nearly $300 million in net asset value, but there is also HUMN, with nearly $83 million in assets under management, and BOTT, with $5 million AUM as of last September.
Broad vehicles also make it easier to make bets across geographies, or in public and private markets. There are opportunities to invest in Asia and Europe. And while many of these markets are somewhat closed to outside individual investors, ETFs can give easier access to investors. Ahern said KOID will own China-based Unitree, the world leader in robotics sales and the creator of the robots we watched dance, once they go public.
Similarly, vehicles can allow retail inventors to get exposure to private companies. KOID doesn't have any private holdings, but other Krane Shares funds have holdings in Anthropic, xAI, and other private companies. For now though, Ahern said they see enough opportunity on the public markets.
Dhruv Maniktala, CIO at wealth manager True North, told Business Insider that his firm is an investor in an industrial robotics manufacturer, and thinks the "most opportunities" for investors are in the private market. Even if these early stage companies don't end up with scale or profitability, they could "be acquired by larger players for their IP," Maniktala said. But even in the private markets, Maniktala suggested diversification.
Companies to watch #
While diversified vehicles make it a lot easier to invest in the theme, market pros say there are other ways to put money to work. There are already the publicly traded giants making bets on robotics: Tesla, which is leaning into its Optimus robot, and Hyundai, which recently purchased Boston Dynamics, as well as Amazon, to name a few. While Elon Musk predicts Optimus could drive Tesla to a $25 trillion valuation, the reality is that robots make up a small part of these companies current revenue.
Another option then would be to look into stocks that offer exposure to industrial automation. Link mentioned Swedish-Swiss ABB, the Swedish automation giant, Japanese manufacturers Fanuc Corporation, Yakasawa Electric, or Kawasaki Heavy Industries, or US-based Rockwell Automation, which Link credits as the first stock she bought while exploring the theme.
For pure-play exposure to humanoid robotics, there's UBTech, the Chinese company that has traded on the Hong Kong exchange since 2023. Soon, there will be more pure-play options.
Earlier this month, Unitree received approval to go public, providing another opportunity for investors to jump in. In the US, Agility Robots expects to soon go public via SPAC at a $2.5 billion valuation.
Ultimately, the game may be very similar to investing in AI: buy things that will make the new technology possible.
"Component makers are probably the best way to invest in this theme," Maniktala said. "Most suppliers will benefit regardless of outcome."
Maniktala said that most names are China-based, such as Leaderdrive, though Japan-based Harmonic Drive is another large player to watch. Link said that the growing amount of capital flowing to these solutions, and the ways that some of the AI-related semiconductor companies are playing in the space, makes her think there's a big opportunity for returns here.
"If a big chunk is going to these names, then these stocks are going to take off, Link said. "It's going to be like Tesla five years ago."
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