“There will be at least a billion robots in 10 years, and those robots will be at least five times as productive”, said Elon Musk at the G20 Innovation Ministerial a few days ago.
This is a tall claim. If Musk is right, it would mean that by the mid-2030s, there could be more humanoid robots than the human population of many countries combined — and, according to his estimate, they would collectively be more productive than all humans.
Musk’s predictions have not always aged well. But this one is still worth thinking about.
While the US and China are competing in almost every technology, including humanoids, the real competition won’t be about who makes the best robot. It is about who controls the supply chain and reaches the finish line first.
And right now, China has the advantage.
China’s Show-off Through Robot Olympics
Last month, China hosted the annual World Humanoid Robot Games in Beijing. The event brought together around 2,000 humanoid robots built by more than 660 teams. Most came from Chinese universities, research institutions and robotics companies.
This year, the robots were not just playing football and running races. They were also asked to shelve books and make beds.
I laughed out loud watching some of the robots trip. Some even caught fire — which was scary. And some were painfully slow.
I was surprised China didn’t censor those videos. But perhaps that was the point. China wanted the world to see that this is no longer a laboratory experiment. The robots may still be clumsy, but this is going to become a huge industry, which may be difficult for the US to mimic.
China was making a geopolitical statement without actually making one.
Humanoids Are Going Bigger
There were other developments too.
In May, GigaAI’s CEO announced that Chinese families would be given humanoid robots to test for free in Wuhan in the first half of 2027. The company unveiled what it called China’s first general-purpose household humanoid, the SeeLight S1. It will help with laundry, storage and cleaning.
According to The Economist, Chinese companies are expected to sell around 50,000 humanoids this year — more than three times last year’s figure.
In August, Tesla’s Optimus humanoid finally entered production. Let’s hope it joins the Olympics next year.
In August, Unitree Robotics, one of China’s best-known robotics companies, became the first major humanoid robot maker to list on Shanghai’s STAR Market. Its shares were priced at 150.80 yuan. They opened with a 629% jump.
But then, a couple of months ago, Donald Trump banned imports of Chinese humanoids and four-legged robot dogs, citing cybersecurity and national-security concerns.
History of Trump’s actions tells us that this techno-geopolitical race isn’t going to be a silent and small one. Let’s understand how messy it might be.
Complex Supply Chain That China Dominates
In July, the US tightened its DFARS rules on rare-earth magnets. DFARS stands for the Defense Federal Acquisition Regulation Supplement.
From January 1, 2027, the US Department of Defense will face tighter restrictions on buying NdFeB — neodymium-iron-boron — and samarium-cobalt magnets from China, Russia, Iran and North Korea.
A humanoid needs those magnets. Because of them, motors in the robot can produce high torque without becoming too large or heavy.
So every time we add another humanoid to the world, we are also adding demand for motors, actuators and the magnets inside them.
The supply chain looks something like this:
Mining of rare-earth ore > concentration > separation into individual oxides > conversion of oxides into metals > production of NdPr alloy > manufacture of magnet powder and finished magnets > production of motors and actuators > assembly of the robot.
And China dominates almost every process. It controlled around 69% of global rare-earth oxide production in 2024. It has around 90% of global separation capacity, roughly 90% of rare-earth metal and alloy output, and approximately 92% of global NdFeB magnet production.
The ends of the supply chain are easier to diversify than the middle. Ore can be mined in America or Australia, and magnets can eventually be assembled in America or Europe. But the processing capabilities cannot be replicated so easily.
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The Demand Problem
Now, let’s see how high the demand for rare earths may go.
Three things determine how much rare-earth material humanoids will need: how many robots are produced, how many actuators each robot has, and how much NdFeB each actuator uses.
Then, developing humanoids doesn’t reduce demand for electric vehicles or defence equipment. Several industries will compete for the same supply of magnets.
And this is where the numbers become interesting.
One base-case scenario, reported by Cross Currents Substack, suggests that by 2050, humanoids alone could consume around 500,000 tonnes of NdFeB magnets every year. For context, global NdFeB magnet production today is estimated at around 300,000 tonnes a year — across all industries.
So, in that scenario, humanoids alone would need 1.5 to 1.7 times today’s entire annual global production of NdFeB magnets.
What If We Exclude China?
The US Geological Survey estimates global rare-earth reserves at more than 85 million tonnes of rare-earth-oxide equivalent. Around 44 million tonnes of those reserves are estimated to be in China. More importantly, China already has the processing and manufacturing infrastructure that turns these minerals into the magnets the world actually needs.
This brings us back to the US restrictions.
If US defence contractors are forced to stop using Chinese rare-earth magnets, they will have to find alternatives. That means they will compete for the same non-Chinese supply that EV manufacturers, industrial motor companies, drone makers and robotics companies also want.
So even if the US successfully builds a China-free rare-earth supply chain, that supply is likely to be more expensive and more constrained, at least until enough new capacity comes online.
And that creates an unusual situation. A policy designed to make the US less dependent on China could make non-Chinese magnets scarcer and more expensive for everyone.
At the same time, these rules don’t apply to civilian industries. They may buy from China. But that creates an unusual dependency. Elon Musk has already experienced what this looks like. Last year, China restricted rare-earth exports, which impacted the production of Optimus.
Final Take
For an unhindered supply of magnets, the US and China should have cordial relations – that looks quite optimistic.
The US may have Tesla, leading AI companies, enormous amounts of capital and some of the world’s best robotics researchers. China has something less glamorous: an irreplaceable supply chain.
The humanoid race boils down to this: who can produce millions of them year after year without running into shortages of the materials, magnets, motors and components they need.
So if Musk’s billion humanoids really are coming, he must ensure his ambition matches the supply chains and US foreign policy.
And yes, we are assuming humanoids will be useful. Let’s keep that thought for another day. But things look complicated for now.
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