(Bloomberg) — The market for artificially intelligent robots and autonomous machines has the potential to expand into a trillion-dollar opportunity by 2035, orders of magnitude larger than it is today, according to a team of analysts at Barclays.
Autonomous vehicles, which are already relatively advanced, will lead the way, followed by drones and then more complex general-purpose humanoid robots, analysts wrote in a report released Tuesday titled “The Decade of Robots.”
“Advances in AI, power and batteries are pushing AI-powered robotics to an inflection point, setting the investment agenda for the next decade,” wrote the team led by Zornitsa Todorova, head of fixed income thematic research at Barclays.
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The development of robotics and other forms of “physical AI” applied to the real world marks a paradigm shift away from digitally focused AI, laying the foundation for a more diverse and deeper “value chain” than the first wave of AI products, they said.
While China currently dominates the deployment of humanoid and industrial robots, Barclays analysts have identified about 200 publicly traded companies that could engage in this issue over the next decade, including 100 with at least one corporate bond outstanding.
“We see automakers emerging as potential key players, alongside the growing deployment of robotic systems in warehousing, logistics and retail,” they wrote. Examples include the use of Nvidia Corp.’s Omniverse. by Mercedes-Benz Group AG to “virtually restructure factories with minimal disruption” and Tesla Inc.’s focus on robots during its fourth-quarter earnings call.
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The team highlighted the software and hardware that underpin the technology, including semiconductor and infrastructure suppliers such as Taiwan Semiconductor Manufacturing Co., Samsung Electronics Co. and Nvidia Corp. They also mention “robotic hardware and motion systems that perform physical tasks,” along with batteries, that “provide the energy base for these platforms,” citing Chinese manufacturers such as EVE Energy Co. and Contemporary Amperex Technology Co.
Barclays analysts also point to a group they call enablers, which are companies that build complete robots, like Tesla, or “shape the broader ecosystem” by developing technology, like Amazon.com Inc.
A shift toward physical AI is already being seen in large-scale retail and logistics operations at companies like Amazon and Walmart Inc. They note that Amazon has more than a million robots operating across its distribution network, “which likely still represents only a fraction of the long-term potential.”
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