Humanoids: A $5 Trillion Market

Are “humanoids”—human-like robots with arms, legs, hands and brains powered by artificial intelligence—on their way to work in factories, stores and your own kitchen? Not yet—but they are quickly evolving, and the market for humanoids could be twice the size of the auto industry in the coming decades.

Morgan Stanley Research estimates the humanoids market is likely to reach $5 trillion by 2050, plus related supply chains as well as repair, maintenance and support. There could be more than 1 billion humanoids in use by 2050.

“Adoption should be relatively slow until the mid-2030s, accelerating in the late 2030s and 2040s,” says Adam Jonas, Morgan Stanley’s Head of Global Autos and Shared Mobility Research.

Easier Commercial and Industrial Use

By 2050, about 90% of humanoids, or about 930 million units, will likely be used for repetitive, simple, and structured work—primarily industrial and commercial purposes. China is likely to have the highest number of humanoid robots in use by 2050, at 302.3 million, trailed by the U.S. at  77.7 million (up from the previous forecast of 63 million).

“The forecast for household usage is much more conservative, with only 80 million humanoids in homes by 2050,” Jonas says. “We are not going to see a robot in every home overnight.”

Creating a general-purpose humanoid that is capable of doing a vast array of useful tasks at home will require technological progress in both hardware and AI models, which should take about another decade. To get those humanoids into homes, prices need to decline significantly, in parallel with regulatory and societal acceptance of this use of humanoids.

“Once we get to that stage, humanoid volume and penetration should pick up quickly,” Jonas says.

Prices Are Likely to Fall

The complexity of humanoids, which require sophisticated robot software models and tight integration with hardware, makes them an expensive product. Morgan Stanley Research estimates that the cost of one humanoid was around $200,000 in 2024 in high-income countries.

As the technology advances and production volumes increase, prices are likely to fall to about $150,000 by 2028 and $50,000 by 2050. In lower-income countries, which may take more advantage of the cheaper Chinese supply chain, prices could fall to as low as $15,000 by 2050.

At that point, the U.S. penetration rate could range from 3%, for households earning between $50,000 and $75,000 a year, to 33%, for those with annual income above $200,000. About 10% of U.S. households overall could have a humanoid by 2050, totaling 15 million units in the country. Although China is likely to have the larger number of humanoids, only 3% of households are likely to own a humanoid, totaling about 4 million units.

“We recognize that, hypothetically, the average household could have more than one unit, creating a fleet of humanoid butlers,” Jonas says. “However, in our forecasts, we assume one humanoid per household at this time.”

China in the Lead

Investors may want to watch the fact that China is dominating the field of AI-enabled robotics, humanoids or otherwise, and the gap with the U.S. is widening.

“It is becoming apparent that national support for ‘embodied AI’ may be far greater in China than in any other nation, driving continued innovation and capital formation,” says Sheng Zhong, Morgan Stanley’s Head of Industrials Research. “In our opinion, China’s lead in AI-robotics may need to widen before rivals, including the U.S., pay closer attention.”

Chinese supply-chain players are currently working on different solutions to improve the performance level of their components, via new design structures, new materials, refined manufacturing processes and AI algorithms to address the precision gap.

“There are some leading U.S. players in humanoid design and development at this stage, but China could catch up when humanoids reach downstream application and mass production, riding on its strong self-sufficient supply chain,” Zhong says.

Meanwhile, there are few U.S.-based alternatives for many humanoid components, such as screws, reducers, motors and batteries. Nearly every robot developer in the world still requires critical components sourced from China and other parts of Asia.

“While it is too soon to declare a final champion in the race for agentic humanoid robot supremacy, the U.S. will need to make significant changes in manufacturing capability, education and national policies to remain competitive in this area,” Jonas says.