What is embodied AI and why is the whole world talking about it

The term embodied AI (in Czech often "embodied intelligence") refers to artificial intelligence that is not confined to a chat window, but directly connected to a physical body — a robot, autonomous vehicle, or industrial arm. The goal is for the machine to not only "understand" commands, but to independently perceive the surrounding world, make decisions, and physically interact with it. While large language models such as GPT-5.5 or Claude process text, embodied AI must handle a combination of image, space, touch, and movement in real time.

For Chinese leadership, embodied AI is a key component of state strategy. President Xi Jinping has been promoting a vision of an "intelligent society" and "intelligent government" for several years, in which digital technologies are to penetrate every sector of the real economy. Embodied AI therefore appeared in the government work report for 2025 and in the new 15th five-year plan (2026–2030). Beijing sees it as a tool to address population aging, rising labor costs, and to keep industrial chains under Chinese control.

Chinese dominance in numbers

China is already the absolute world leader in the installation of industrial robots. According to the International Federation of Robotics, Chinese factories have installed more industrial robots in the last five years than all other countries in the world combined. In 2024, for the first time, Chinese companies supplied over 57% of the domestic market and surpassed foreign competition.

Humanoid robotics is still just the tip of the iceberg, but it is growing exponentially. In 2025, China produced 12,800 humanoids, representing approximately 90% of global production. For comparison: annual production of classic industrial robots in China amounted to 556,000 units. Humanoids are currently used primarily in research centers, logistics, and limited factory tests.

From electric vehicles to robots: Why China has a head start

China's lead is no accident. The country that dominated the global electric vehicle (EV) market now faces a similar scenario in robotics. According to Morgan Stanley, China controls 63% of key companies in the global supply chain for humanoid robots. EV batteries are used in GAC GoMate or Spirit AI Xiaomo robots, and lidars and cameras developed for autonomous driving serve to navigate factory humanoids.

A number of Chinese EV manufacturers are directly entering robotics. XPeng is developing the Iron robot, which uses the same sensors and algorithms as the company's autonomous vehicles. GAC Group wants to mass-produce the GoMate humanoid for cable assembly by 2026. CATL, the world's largest battery manufacturer, has deployed Xiaomo humanoids directly on the production line — the robots achieve 99% success in connecting high-voltage connectors and can handle triple the daily workload of a human because they don't need breaks.

The state adds massive support to this. The Robot+ and AI + Manufacturing programs aim to double the density of production robots by 2030. The new National Venture Capital Fund has allocated 1 trillion yuan (approximately 120 billion EUR) to support domestic robotics companies. Provinces offer subsidies of up to 30% of costs for automation innovation.

When a robot dances but can't work: Current limitations

Despite all the publicity around dancing and boxing humanoids, the reality is more modest. Many impressive videos are created by robots that are pre-programmed or remotely controlled — not fully autonomous. The founder of leading Chinese company UBTech admitted that their humanoids in factories are "only half as efficient as humans." They lack fine motor skills, hand-eye coordination, and the ability to perform complex assembly tasks such as connecting cables or inserting small components.

The average price of a Chinese humanoid ranges between 300,000 to 500,000 yuan (36,000–62,500 EUR). For mass deployment, it would have to drop to roughly half. Analysts at Guotai Securities estimate the commercial profitability threshold at 160,000 yuan. An exception is the Unitree G1, which already sells for approximately 11,650 EUR — less than half the price of Tesla Optimus (~25,800 EUR) and a fraction of the price of Boston Dynamics Atlas (~120,000+ EUR). Even so, most humanoids remain in "small, single-point tests."

Software dependence and European components

While China dominates hardware production, it has a critical weakness in software and advanced components. Nvidia's Isaac development platform, simulation tools, and Jetson chips form the backbone of the ecosystem on which most Chinese companies build, including UBTech, Unitree, AgiBot, and Galbot. Beijing fears that US export controls could in the future also hit these edge-computing chips.

At the same time, China remains dependent on European and Japanese suppliers of precision components. German Schaeffler and Japanese THK and NSK supply approximately 90% of the special ball screws used for precise robotic applications. In top-tier industrial robots, companies such as ABB (Swiss-Swedish) or FANUC (Japan) still lead, while Chinese brands dominate more the lower and mid-range segments. This means that European industry still holds key positions in the value chain — but it may not stay that way forever.

Millions of robots, millions of people out of work?

The Chinese government officially presents robots as partners, not replacements for people. Working documents speak of "empowerment" and "human-machine harmony." The reality, however, is different. Estimates suggest that robots could replace up to 70% of manufacturing jobs in China. Especially vulnerable are nearly 300 million Chinese migrant workers, who often lack social security.

At the same time, the country suffers from a paradox: although it produces the most STEM graduates in the world every year, it lacks an estimated 5 million AI specialists and youth unemployment exceeds 17%. Chinese authorities are beginning to realize the risk of excess capacity and "involution" — self-destructive price wars that have already affected the electric vehicle sector. The National Development and Reform Commission even warned that an oversaturated humanoid market could lead to overproduction and a drain on research resources.

What this means for the Czech Republic and Europe

For Czech and European companies, China's approach is a warning. MERICS, the prestigious Berlin institute for China studies, warned that Europe could find itself in a situation similar to the race for electric vehicles — outpaced by a combination of Chinese industrial capacity and state support. While Czech industry has a strong background in automation and component supplies, it lags behind in embodied AI. European startups in physical AI are still in an early stage and often dependent on American computing platforms.

On the other hand, the European AI Act and emphasis on safety could be a competitive advantage if the market begins to ask for certification of autonomous machines. Czech companies should monitor the development of standards for humanoid robots — the Ministry of Industry and Information Technology in Beijing has already established its own standardization committee and is actively pushing for the creation of global rules. If Europe does not offer its own solutions in the area of safe and transparent embodied AI, it risks having to accept Chinese standards as a fait accompli.