Key points
- China's state venture fund is intended to channel about $137 billion into AI, robotics and advanced manufacturing over 20 years, alongside more than $20 billion in robotics subsidies in a six-month stretch.
- Korea runs the most automated factories on earth, 1,220 robots per 10,000 workers, and still tripled its AI budget to 10.1 trillion won for 2026.
- The US has no national robotics strategy. Its flagship robotics institute runs on roughly $30 million, and a robotics executive order remains unsigned.
Unitree Robotics closed its first day of trading on Shanghai's STAR Market on August 19 up 487%, which put its market value above the $39 billion Figure AI commanded in its September 2025 private round, according to Fortune. Thirteen days earlier, South Korea's finance ministry said it would put 1,000 AI robots a year into its factories. And Washington? A robotics executive order the administration has been drafting since December is still sitting unsigned.
That is the physical AI race in three sentences.
Physical AI is the industry's term for AI that acts on the world through hardware, a factory arm, a warehouse humanoid, a robot dog, rather than a chatbot that only produces text. It is where the money is going next, and the three governments funding it are not spending anything close to the same amounts.
How much is China spending on robots?
Start with the biggest number. China's National Development and Reform Commission announced a state-backed venture capital guidance fund in March 2025 that is intended to channel about 1 trillion yuan, roughly $137 billion, into AI, robotics and advanced manufacturing over 20 years, a commitment the International Federation of Robotics called out as a step change in state support when it was announced. The mandate spans all three sectors, so calling the entire amount robotics spending would overstate it, and the fund, the national subsidies and the city funds below may overlap rather than stack.
That fund is only part of the total. Reuters identified more than $20 billion in Chinese government robotics subsidies during late 2024 and early 2025. The support included grants, loans, tax benefits and state venture capital. Beijing and Guangzhou each introduced a 10 billion yuan robotics fund, worth about $1.4 billion apiece, with Shenzhen and Shanghai following.
Robotics also moved higher in the policy hierarchy this year. It appears in the central outline for the 15th Five-Year Plan, covering 2026 through 2030, as one of eight strategic emerging industries. That may sound like a procedural distinction, but the previous plan addressed robotics in a lower-level ministry document. Placement in the main outline requires coordination among central ministries, provincial governments and state banks. The Ministry of Industry and Information Technology formed a committee for humanoid standardization in December 2025. By March, the committee had released a national standards system covering the industry.
The production figures are just as pronounced. According to the IFR, China installed about 295,000 industrial robots in 2024, accounting for 54% of global installations. Its installed fleet totals roughly 2 million units. No other country operates even one-quarter as many.
Where does Korea stand?
Korea already won one version of this race. The IFR's World Robotics 2025 report, presented on April 8, 2026, recorded 1,220 robots per 10,000 manufacturing workers in Korea. Singapore ranked second with 818, followed by Germany at 449, Japan at 446 and the United States at 307. The worldwide average was 132. Korea has occupied first place for years. It is spending like a country that trails.
The government proposed 10.1 trillion won, about $7.27 billion, for AI in the 2026 budget, up from 3.3 trillion won in 2025, and roughly 6 trillion won of that is earmarked over five years for what the ministry calls AX, meaning AI pushed inside robotics, autos, shipbuilding and manufacturing. Deputy Prime Minister and Finance Minister Koo Yun-cheol called the budget Korea's "final golden opportunity to leap forward as a global leading nation in the era of AI-led transformation."
The physical AI piece landed on August 6, at an Emergency Economic Headquarters meeting in Seoul: 1,000 AI robots deployed per year, humanoids built for 10 industries including chemicals, steel, autos and shipbuilding, and core research money for actuators, sensors and robot hands. Detailed plans for steel and petrochemicals are due in the fourth quarter. The humanoid program itself is older. The trade ministry launched the K-Humanoid Alliance in April 2025 with about 40 members, Rainbow Robotics, Samsung SDI, chip designer DEEPX, KAIST, Seoul National University and POSTECH among them, targeting more than 1 trillion won in investment by 2030.
Koo made the strategic pitch plain at an American Chamber of Commerce lunch in Seoul on August 19. "The US is the world's leader in AI-related software and LLMs," he said. "For that technology to be applied in the real world, it needs to be combined with manufacturing capabilities." Translation: America has the brains, Korea has the factories, and Korea would like to be the body that American AI moves through.
Private money is already building on that bet. Hyundai Motor Group said in February it would put 9 trillion won, about $6.3 billion, into a complex at Saemangeum that includes a 5.8 trillion won AI data center with up to 50,000 GPUs and a 400 billion won robot plant sized for 30,000 units a year, where Boston Dynamics plans to build its Atlas humanoid starting with construction in 2028.
