Episode Details

Our analysts Adam Jonas and Sheng Zhong discuss the rapidly evolving humanoid technologies and investment opportunities that could lead to a $5 trillion market by 2050. 

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Adam Jonas: Welcome to Thoughts on the Market. I'm Adam Jonas Morgan Stanley's Global Head of Autos and Shared Mobility.

Sheng Zhong: And I'm Sheng Zhong, Head of China Industrials.

Adam Jonas: Today we're talking about humanoid robots and the $5 trillion global market opportunity we see by 2050.

It's Thursday, May 15th at 9am in New York.

If you're a Gen Xer or a boomer, you probably grew up with the idea of Rosie, the robot from the Jetsons. Rosie was a mechanical butler who cooked, cleaned, and did the laundry while dishing out a side of sarcasm.

Today's idea of a humanoid robot for the home is much more evolved. We want robots that can adapt to unpredictable environments, and not just clean up a messy kitchen but also provide care for an elderly relative. This is really the next frontier in the development of AI. In other words, AI must become more human-like or humanoid, and this is happening.

So, Sheng, let's start with setting some expectations. What do humanoid robots look like today and how close are we to seeing one in every home?

Sheng Zhong: The humanoid is like a young child, in my opinion, although their abilities are different. A robot is born with a developed brain that is Large Language Model, and its body function develops fast.

Less than three years ago, a robot barely can walk, but now they can jump, they can run. And just in last week, Beijing had a humanoid half marathon. While robot may lack on connecting its brain to its body action for work execution; sometimes they fail a lot of things. Maybe they break cups, glasses, and even they may fall down.

So, you definitely don't want a robot at home like that, until they are safe enough and can help on something. To achieve that a lot of training and practice are needed on how to do things at a high success rate. And it takes time, maybe five years, 10. But in the long term, to have a Rosie at every family is a goal.

So, Adam, our U.S. team has argued that the global humanoid Total Adjustable Market will reach $5 trillion USD by 2050. What is the current size of this market and how do we get to that eye-popping number in next 25 years?

Adam Jonas: So, the current size of the market, because it's in development phase, is extremely low. I won't put it a zero but call it a black zero – when you look back in time at where we came from. The startups, or the public companies working on this are maybe generating single digit million type dollar revenues. In order to get to that number of $5 trillion by 2050 – that would imply roughly 1 billion humanoids in service, by that year. And that is the amount of the replacement value of actual units sold into that population of 1 billion humanoid robots on our global TAM model.

The more interesting way to think about the TAM though is the substitution of labor. There are currently, for example, 4 billion people in the global labor market at $10,000 per person. That's $40 trillion. You know, we're talking 30 or 40 per cent of global GDP. And so, imagining it that way, not just in terms of the unit times price, but the value that these humanoids, can represent is, we think, a more accurate way of thinking about the true economic potential of this adjustable market.

Sheng Zhong: So, with all these humanoids in use by 2050, could you paint us a picture in broad strokes of what the economy might look like in terms of labor market and economic growth?<