China is curbing the frenzy of companies going public in the humanoid robots industry by scrutinizing these companies’ rising valuations and reported revenue and the real demand for their products. It follows a recent surge in private funding for humanoid robots, the sector which is one of the most closely watched in the country with government policy. But there is a strong trend towards caution with growing fears of speculative pricing and business models which might rely on major government-sponsored projects.
The shift in the regulatory stance comes after the wild debut of a Chinese robot manufacturer, Unitree, which has made humanoids and quadrupeds, on the stock market. The company’s stock jumped over five times during the trading of the shares in August in the Shanghai Exchange, but has subsequently declined significantly from its high. The high drama has added to fears that the excitement around humanoid robotics may have outstripped its potential for profitable commercialization.
Regulators have slowed or delayed some planned listings of humanoid robots based on informal guidance, people familiar with the matter said. It’s not believed to be a formal prohibition on the sector’s IPOs. Rather, it seems to be a more rigorous review of companies applying to list on the public markets.
The warning from the regulators comes as a result of a tricky balancing act for Beijing. The industry is a policy priority as humanoid robotics and embodied artificial intelligence are considered key technological areas of development. Concurrently, authorities are interested in discouraging over-speculation and keeping traders from investing in companies based on projections that may not correspond to actual company operations.
Embodied Intelligence is Artificial Intelligence systems that interact with and respond to the physical world. Humanoid robots, which are most visible, are the result of this technology, and are a combination of artificial intelligence, sensors, mechanical systems and more and more sophisticated software. In recent years, China has promoted development in this field as part of its general policy to boost advanced manufacturing and emerging technologies.
There has been a lot of private funding as a result of the government push. There are many companies developing robotics, and even the established industrial robot manufacturers have begun to make humanoid robots. This has led to some investors putting high valuations on companies that are still in the process of developing their product or commercial business model in this environment of competition.
In fact, the investment craze in the robotics industry is a ‘campaign-style innovation’, a Chinese term for ‘booms’, in which businesses and money pour into a policy supported industry, said Leo Wang, a venture capitalist at Qianchuang Capital.
The enthusiasm around embodied AI was “even greater than the investment excitement in the previous waves of technology that involved China’s Internet industry and the new-energy industry,” Wang said. Some of the founders were getting interest from dozens of investors in weeks, he said, and traditional due diligence was sometimes being deemed less important. He also reported that some of the private market robotics projects had already seen their valuations drop by 30% to 50%.
The concerns are especially on how the robotics companies are monetizing. The regulators are looking at whether the business that comes from local-government-supported projects is a sustainable market demand or whether some is tied to short-term programs aimed at spurring growth of the industry.
The expanding network of robot data-collection centres is one area being considered. The facilities are to collect data and to train robots to operate in real world environments. Local governments have also been involved in robotics-related joint ventures with the robotics industry, where the public sector has paid a significant initial investment in some cases.
These can be an effective way to generate orders and revenue for robotics companies, improving their financial situation. They can also assist companies achieve growth whilst readying for public listings. But when a substantial amount of revenue is generated from government sponsored programmes and not from independent customers buying robots due to their immediate commercial requirement, questions arise.
One insider told the FT that the value of some firms may drop 60% to 70% if data gathering in centres were stripped out of their financial projections. A change would make this distinction even more apparent between revenue earned from policy-supported projects and revenue earned from repeat commercial customers.
There’s also been some concern in the robotics sector about the quality of revenue. In a recent post on WeChat, Shao Tianlan, the CEO of Mech-Mind Robotics, claimed that some of the most valued embodied-AI companies are making money from their “data-collection centres” and “related-party transactions” that may not continue to work as they prepare for the next step in their growth: an IPO.
Shao did not comment on his post.
This has proved to be the case in the market, as investors are already becoming more discriminatory. Mech-Mind Robotics, another technology firm in the wider robotics industry, shed from a high on the day of its stock listing in September. It’s part of a broader rethinking of the price of companies that rely on an industry that’s still in its early commercial stages.
So the increased focus doesn’t diminish the Chinese support for humanoid robotics. Instead, the focus is becoming more on what is measurable in terms of deployment, volumes of orders are increasingly being seen, and there is a growing focus on evidence that robots are moving beyond demos and into profitable industrial applications, say investors and industry executives.
Investor sentiment was shifting from “blanket euphoria to selective rationality”, as they begin to look closely at the question of whether the commercial value achieved had been worth premiums, said Ruiying Zhao, S&P Global Market Intelligence’s senior research analyst.
The shift is part of a general strengthening of China’s equity fundraising environment. In the first half of 2026, the Mainland companies raised a considerable amount of money via share sales and convertible offerings and technology companies are a major portion of that amount. Investors have been demanding more in terms of products, customers and revenue, but the continued flow of capital allows robotics companies to continue to attract investment dollars.
