Humanoid robots powered by AI will soon be walking out of the lab and into real-world settings, with new research from Barclays predicting explosive growth in the physical‑AI sector that will reshape every industry from manufacturing and defence to healthcare.

According to Barclay’s AI Gets Physical report, the value of the global humanoid robotics industry, currently at between $2 and $3 billion, will reach at least $40 billion by 2035, but could soar by a hundredfold to as much as $200 billion under the most optimistic scenarios.

Investors are already chasing the potential, with VC funding for robotics hitting $8.8 billion over Q2’25, fifteen times higher than seen in 2017, an influx of cash that saw more than 20 new humanoid models unveiled by developers last year.

Illustrating the point, Barclays said that one general-purpose humanoid startup, Figure, saw its value jump from $2.6 billion to $39 billion in just seven months, buoyed by a partnership with BMW that put its robots on the line at the car giant’s Spartanburg plant. Likewise, German industrial giant Schaeffler is rolling out Neura Robotics’ humanoids across its global production lines, while car maker Hyundai has teamed up with Boston Dynamics, the company behind Spot, the robot dog.

Barclay’s research suggests that these deals are the first wave in what will be a global transformation after the “collapse” in production costs for humanoids over the last decade, falling from $3 million per unit to $100,000.

Those savings are thanks to breakthroughs in the “three Bs”, brains, brawn, and batteries, which the report says have accelerated core technologies and intensified competition, creating a booming robotics market.

The flood of AI technology has provided the most obvious benefits, with robots gaining advanced vision and motion systems on the back of GPU improvements and new sensory systems, but these “brains” only account for 35% of total humanoid production costs, and batteries 15%.

Robot bodies, the brawn, make up half of production costs, with engineers sweating to replicate the dexterity of the human body in wires and metal, from the smallest of bearings to the actuators that convert energy into physical motion. Barclay’s report argues that recent developments mean actuators, which essentially act as the robot’s muscle, have improved the precision, response times, and torque control of humanoids, leading to greater dexterity and making these next-gen bots more valuable to industry as labour shortages bite.

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Though adoption is expected to remain gradual until 2030, as the global population ages, Barclays predicts the commercial adoption of humanoids will soar, presenting major investment opportunities and an acceleration of M&A activity between industrial companies, robotics developers, and AI firms.

“Humanoid robots represent a structural shift in automation,” said Zornitsa Todorova, Head of Thematic FICC Research at Barclays. “As they move from concept to commercial reality, the implications for labour markets and industrial strategy are profound.”