China tightens rules for humanoid robot startups

China’s securities regulator is raising the bar for humanoid robot startups seeking public listings, as scrutiny grows over soaring valuations and whether the rapidly expanding industry can generate sustainable revenue.

According to three sources familiar with the thinking of the China Securities Regulatory Commission (CSRC), Chinese “embodied AI” companies seeking to go public are being told through regulatory “window guidance” to meet specific requirements, according to CNBC.

The criteria include having sustainable revenue and commercial orders, narrowing losses with one source saying companies may need to provide a three-year forecast, and possessing core technologies such as robotic “brains” or hands.

One source said startups may only need to meet two of the three requirements, although it remains unclear which companies would qualify under that standard.

The tighter scrutiny has lowered expectations that many of China’s humanoid robotics startups will reach the public markets, with sources saying only a handful — or potentially none — may succeed.

At least two dozen humanoid-related embodied AI companies have filed to list in Hong Kong, according to two of the sources cited by CNBC. Hong Kong began allowing technology companies to make confidential IPO filings in May 2025.

The Hong Kong Stock Exchange declined to comment, while the CSRC had not immediately responded to CNBC’s request for comment.

Mainland Chinese companies seeking to list in Hong Kong also require approval from the CSRC.

Unitree listing highlights sector concerns

The increased regulatory scrutiny follows a sharp rise in investment and valuations across China’s humanoid robotics industry.

Unitree, one of the sector’s most prominent companies, received a regulatory fast-track for its Shanghai listing on Aug. 19, coinciding with the opening of the World Robot Conference in Beijing.

However, founder Wang Xingxing warned in a keynote the following day that commercialisation beyond applications such as dancing robots remained years away. His comments fueled debate over the practical applications of humanoid robots and whether companies in the sector are generating meaningful revenue.

China now has more than 100 humanoid robotics companies, many of which are part of Beijing’s broader push to develop “embodied AI.” The technology was highlighted in China’s two most recent annual government work reports, although authorities have also warned about the risk of a bubble in the sector.

Investment in humanoid robotics reached 47.09 billion yuan ($6.95 billion) in the second quarter, more than double the previous quarter and more than six times the level recorded during the same period a year earlier, according to industry data provider Xiniu.

Unitree raised about 6.1 billion yuan ($905 million) in its Aug. 19 IPO. Its Shanghai-listed shares surged more than 460% on their first trading day, closing at 845 yuan.

The stock had subsequently fallen to 459.65 yuan as of September 28, nearly half its debut closing price.

Hong Kong-listed UBTECH, another major player in the sector, has also lost more than 40% of its value this year. The company, which went public in December 2023, reported an operating loss of 279 million yuan for the first half of this year.

The decline in robotics shares contrasts with the large amount of capital flowing into humanoid startups over the past year. The technology, also referred to as “physical AI” in China, has attracted investors seeking exposure to the broader artificial intelligence boom.

The concerns extend beyond robotics. A Rhodium Group analysis published this month found that Chinese AI companies generate only about 10% of the revenue of Anthropic and OpenAI, while some Chinese AI startups have much higher valuation-to-revenue ratios than their US counterparts.

Meanwhile, expectations are growing around potential IPOs by major US AI companies. AMD said Monday that it would acquire World Labs, an AI startup founded by AI pioneer Fei-Fei Li, for $8.2 billion in an all-stock deal. World Labs develops AI models for creating virtual 3D environments, technology that is frequently used in humanoid robot development.

By Sabina Mammadli