Deep Dive: Is the Humanoid Opportunity Legit or Overhyped? What’s Beyond?

The humanoid robotics market is currently in its infancy, with low overall exposure and a predominantly private company landscape, with companies like Unitree and Figure, and Agility Robotics, among others, creating a stir. While the market size is currently small, we have significant exposure to many of the enabling technologies.

We anticipate that established robotics leaders will likely enter this market as it matures and clear paths to monetization emerge. However, it’s important to note that many current startups in this space may not survive, and their intellectual property value could be limited.

The excitement surrounding humanoid robots is palpable and increasingly justified. In July, I discussed the humanoid market on Cheddar TV, addressing Elon Musk’s projections of a trillion-dollar humanoid market. However, I emphasized that this excitement should extend to the entire automation ecosystem, not just humanoids.

It’s crucial to recognize that humanoid robots are not the only, or necessarily the best, form factor for many tasks. Humans have limitations in size, strength, and speed. A key development in this space is the rise of Autonomous Mobile Robots (AMRs). AMRs are versatile, self-navigating robots that can adapt to changing environments without requiring fixed routes or extensive infrastructure.

These robots are finding applications in warehouses, factories, hospitals, and even public spaces. Examples include self-navigating forklifts, inventory management robots, and even robotic guides in retail or hospitality settings. Beyond AMRs, we’re now able to equip various robotic forms (such as drones and shape-shifting or size-shifting robots with telescopic capabilities) with advanced AI “brains”, sophisticated communication abilities, dexterous manipulation skills, and near limitless end-effectors and tools.

An example portfolio company involved in both humanoids and general new-age and classical robotics is Novanta. Their work exemplifies the advancement and versatility in modern robotics, particularly in the crucial areas of actuation and controls.

Novanta’s technologies, currently heavily used in surgical robots, demonstrate the incredibly precise control, dexterity, and reliability required for advanced robotics applications.

Key Novanta Technologies With Broad Applications, Including Humanoid Robotics, Include:

  1. Precision Motors and Drives: Used in surgical robots, these could enable smooth, precise movements in humanoid joints or industrial robotic arms.
  2. Optical Encoders: Essential for precise position feedback, applicable in humanoid balance systems or industrial robots requiring exact positioning.
  3. Rapid Tool Changers: These allow robots to quickly switch between different end-effectors, enhancing versatility. Examples of end-effectors that could be used by humanoid or other robotic form factors include:
    • Adaptive Grippers: Capable of handling objects of various shapes and sizes, useful in both household and industrial settings.
    • Precision Manipulators: For tasks requiring fine motor skills, like electronics assembly or delicate household chores.
    • Specialized Tools: Such as welding attachments for industrial use or cooking utensil holders for household robots.
    • Sensor Arrays: Including tactile sensors for improved interaction with the environment.
    • Vacuum Suction Cups: For handling smooth or delicate objects in various settings.
  4. Motion Control Systems: These could be adapted to enable fluid, human-like movements in humanoid robots or precise control in industrial automation.

These same principles and technologies can be applied to humanoid robots and other robotic form factors for both industrial and household use. This versatility in form and function is what truly sets this robotics revolution apart from previous decades of robotics that saw more “static” robots.

We believe this technological advancement will:

  1. Expand and uplift traditional manufacturing and logistics markets, which remain highly manual in many aspects.
  2. Create an opportunity for the robotics market to become one of the largest segments of the global economy.

This projection is based on the understanding that the majority of GDP is generated in the physical world. Moreover, many operations and services not considered in GDP calculations —­­ such as household management and mundane tasks — stand to benefit significantly from robotics automation.

The goal is to create a more efficient, clean, and self-sustainable world. This vision extends beyond just economic metrics to encompass quality of life improvements and environmental sustainability.

For a more comprehensive discussion on these topics, including the convergence of energy, AI, and robotics from both supply and demand perspectives, refer to our July Webinar, which includes a detailed presentation deck and audio recording.

The Global Robotics and Automation Index (ROBO) comprises:

  • Best-in-class, blue-chip robotics and automation companies
  • Global scope with diversified market cap exposure
  • 11 proprietary subsectors, including:
    • Cutting-edge technologies: sensing, actuation and control systems, design and planning
    • Industry leaders across manufacturing, healthcare, logistics, agriculture, and business process automation
  • Key features:
    • Quarterly rebalancing to stay ahead of rapid industry developments
    • Active research team with rigorous scoring committee for inclusions/exclusions
    • Evaluation criteria: market leadership, technical innovation, growth potential, and more

(Note: ROBO has under 6% overlap with QQQs, offering distinct exposure from mainstream tech indices.)

This composition ensures ROBO captures the blue-chips of the robotics and automation industry, from foundational technologies to transformative applications, providing focused exposure to the sector’s most promising companies.

For more news, information, and analysis, visit our Disruptive Technology Channel.