Barclays flags humanoid robots as next phase of AI adoption

Barclays Research has published a new Impact Series report, The Future of Work: AI Gets Physical, arguing that humanoid robots represent the next major frontier for artificial intelligence as the technology moves beyond software into physical environments.

The report said humanoid robots are transitioning from experimental lab projects into early real-world deployments, driven by rapid advances in AI reasoning, mechanical systems and energy storage. Together, these advances have reduced production costs by around 30 times over the past decade, lowering barriers to commercial adoption at a time when ageing populations and labour shortages are intensifying across developed economies.

Barclays Research estimates the global humanoid robotics market is currently worth between $2 billion and $3 billion. Under its most optimistic scenarios, the firm said the market could expand to as much as $200 billion by 2035, implying a structural shift in how automation is deployed across multiple industries.

The report highlighted geographic differences across the emerging supply chain. Europe was said to retain a competitive advantage in areas such as precision engineering and automotive manufacturing, skills that translate well to building complex robotic systems. China, by contrast, now accounts for the majority of newly announced humanoid robot models and is rapidly scaling both innovation and manufacturing capacity, giving it momentum in volume production.

A key technical bottleneck remains cost. Barclays said actuators, which function as a robot’s “muscles” by converting electrical energy into physical movement, account for roughly 50% of total humanoid robot production costs. These components determine how smoothly, precisely and safely a humanoid can move, making them central to performance as well as economics.

The report framed recent progress around what it called the “three Bs”: brains, brawn and batteries. “Brains” refers to advances in AI models and reasoning systems that allow robots to perceive environments, plan actions and adapt to new tasks. “Brawn” covers mechanical and electromechanical improvements, particularly in actuators and joints, which enable more human-like motion and strength. “Batteries” reflect improvements in energy density and efficiency, which extend operating time and reduce downtime.

Barclays said these combined improvements are unlocking demand across manufacturing, logistics and healthcare, facing acute labour shortages and rising wage pressures. In healthcare, for example, humanoid robots could support patient handling or routine tasks, while in logistics and factories, they could operate in environments designed for humans without requiring major infrastructure changes.

As production scales, the report suggested value creation will increasingly shift from software to hardware. While AI software remains critical, Barclays said mass adoption will favour companies specialising in actuators, precision components and industrial automation. “Humanoid robots represent a structural shift in automation,” said Zornitsa Todorova, head of thematic fixed income, currencies and commodities research at Barclays, adding that falling costs and improving capabilities are bringing that shift closer to commercial reality.

The Recap

• Barclays released a report on humanoid robotics market.
• Market currently estimated at $2–3 billion in size.
• Report says market could reach $200 billion by 2035.