As China’s tech boom takes center stage, a prominent venture investor is sounding an alarm. He calls the billion-dollar industry overheated, commercially shaky and ripe to a bubble.

Zhu Xiaohu is a prominent investor at GSR Ventures, known for backing unicorns such as Didi, the food delivery platform Ele.me and lifestyle app Xiaohongshu (known as RedNote outside China), said he was pulling back from humanoid robots.
In an interview with ChinaVenture, Zhu asked: “Who are their clients?”

Published a few weeks ago, the report cited a lack commercial applications for embodied AI – artificial intelligence embedded into physical systems such as robots – at this stage. “Who would pay tens of thousand (of yuan), to do these tasks?”

I often joke that every humanoid robotics company can do summersaults, but where is the business? He said, adding that early-stage venture capitalists are better off avoiding this area or leaving it altogether. Zhu’s comments are also backed up by his history of backing away when he feels hype is outpacing the fundamentals. In 2017, he famously left the bike-sharing company Ofo during the height of its boom, warning against unsustainable business models. The company collapsed shortly after.

Zhu’s blunt skepticism sparked debate between investors and entrepreneurs. Many acknowledge that there is a bubble in humanoid robots, but they disagree on whether this will hurt the sector’s potential long-term.

Zhang Ying is a founding partner of early-stage VC company Matrix Partners China, an investor in the humanoid robots startup Unitree. He argues that bubbles are a normal part of emerging industries. In a recent WeChat post, he wrote that humanoid robotics will produce great companies over time.

Other people, however, share Zhu’s concerns. Supporters claim that the current bubble will hurt the sector because it will inflate expectations and divert resources.

Fu Sheng, founder of Cheetah Mobile, compared the current bubble to the dotcom bubble in the early 2000s. In a recent video, he said that the dot-com bubble was decades old. By then, technology and real world applications had matured. “But humanoid robotics are still far away from that stage.”

Fu highlighted a deeper danger: too much money is being spent on crowd-pleasing features such as dancing robots or patrol dogs bots – often remotely controlled – while key capabilities like voice interaction or autonomous operations remain underfunded.

China’s robotics sector has attracted increasing interest in recent years as the country strives to become a leader in advanced technologies including AI and automation.

The growth of the robotics industry in China is driven by a strong government, a robust technology ecosystem, and escalating demand for automation across sectors, from manufacturing to healthcare to entertainment. Unitree and DeepRobotics are now standards in the field.

According toGaogong Industrial Institute data, global funding for humanoid robots amounted to more than 11 billion Yuan ($1.5 billion), spread across 69 deals, in the first ten months of 2024. Chinese companies accounted in 56 cases for more than 5 billion yuan.

Editor: Apurva.

Header image: At a humanoid training facility in Shanghai on March 20, 2025. VCG)