SINGAPORE — Chinese robotics companies shut out of the U.S. by new restrictions on advanced robots can still reach American buyers by building genuine operations in Singapore, according to a Temasek-backed venture firm that counts humanoid maker Unitree Robotics among its portfolio companies.
Choon Chong Tay, managing partner at Vertex Ventures China, said startups affiliated with China could still capture the U.S. market by anchoring day-to-day operations, hiring, and control of critical components in the city-state.
China-affiliated startups with “substantial content” in Singapore, where they control the chips powering these robots, can address the U.S. market, the Shanghai-based venture capitalist told CNBC on Tuesday.
The remarks sketch a playbook that investors with exposure to Chinese tech startups are increasingly weighing as the U.S.-China technology contest intensifies. Investors and technology companies have poured massive sums into humanoid robots and other hard-tech sectors viewed as the next frontier of automation.
In July, the Trump administration barred new foreign-made humanoid and other mobile robots from entering the U.S. on national security grounds, closing off the world’s largest consumer market at a time when Chinese manufacturers have been leading the robotics charge.
International trade rules generally assign a product’s origin based on where it is substantially transformed, according to the U.S. government.
Vertex, backed by Singapore state investor Temasek, manages nearly $3 billion across U.S. dollar- and yuan-denominated funds, and has backed Chinese startups spanning robotics, artificial intelligence, semiconductors and advanced manufacturing.
Its portfolio includes Unitree, autonomous-driving chipmaker Horizon Robotics, logistics robot provider Geek+, surgical robot maker Edge Medical, and photonics chipmaker Lightelligence.
Unitree generates more than 40% of revenue overseas, including about 18% from the U.S., according to Kangyuxiao Li, an equity analyst at Morningstar. “That makes the U.S. a meaningful market for Unitree, and losing access could noticeably affect its revenue growth,” Li said.
Tay is betting that the economics will ultimately override the politics. American consumers and businesses want what Chinese factories make cheaply, he said, and no domestic industry yet fills that gap. If a Singapore-certified robot is safe and priced right, “What other reason do you have to not allow us to export?”
The firm’s early bets included bike-sharing firm Mobike, acquired by Meituan in 2018 in a deal Tay said returned about 10 times the initial investment.
The portfolio is now overwhelmingly hardware. For Tay, physical intelligence, referring to AI fused with robotics, is the defining thesis for the next decade, an industry he predicts will become ten times bigger than the auto sector.
The U.S. ban last month marks a milestone in the U.S.-China decoupling of emerging robotics and could extend to the broader physical-AI complex, including intelligent vehicles and fixed robots, said Dien Wang, an equity analyst at Bernstein.
Beijing, however, holds counter-leverage through its dominance of the rare earths used in humanoid actuators and motors, Wang said. “Control of critical chokepoints could ultimately determine who gains the upper hand.”
By CNBC