China has outpaced the United States in robotics venture funding this year, drawing $13.2 billion against America’s $12.1 billion. The record spending continues even as Beijing’s economic planners warn of an investment bubble and Washington drafts rules designed to keep Chinese robots out of the US market.

Global robotics funding more than doubles

Global venture funding for robotics reportedly reached $9.9 billion in the third quarter of 2026, more than twice the $4.3 billion recorded a year earlier, according to Crunchbase data. Across the first three quarters of 2026, the sector is up roughly 185% year over year.

China’s $13.2 billion leads the United States’ $12.1 billion, while Germany trails far behind at $1.7 billion.

Chinese startups captured some of the largest checks. Guangzhou-based Xpeng Robotics raised a $900 million Series C, while Shenzhen’s AI² Robotics closed a $736 million Series C. In the United States, Travis Kalanick’s Atoms and Pittsburgh’s Skild AI also drew billion-dollar backing, with Skild AI collecting $1.4 billion for its Skild Brain model.

The capital surge has minted unicorns at a record pace. Of the roughly 75 robotics companies on Crunchbase’s unicorn board that raised funding in the past three years, 45 joined just this year. Ulrik Stig Hansen, co-CEO of data-layer firm Encord, said physical AI is “just starting to take off.”

Beijing urges caution at home

Despite China’s lead, its own government has urged restraint. In late November 2025, Li Chao, a spokeswoman for the National Development and Reform Commission, told reporters in Beijing that China now has more than 150 humanoid robot makers, according to the South China Morning Post. She warned that too many nearly identical products could crowd out spending on research.

That caution has been followed by a measurable cooling. Investment in China’s physical AI companies fell 40.1% in a single month, from 19.4 billion yuan in August to 11.6 billion yuan in September. Total investment for the third quarter came to 33.3 billion yuan, 28.7% lower than in the first half of the year, Sedaily reported. Some state-linked investors have stopped reviewing new physical AI deals altogether.

The slowdown stems from an informal warning, known as “window guidance,” that China’s securities regulator issued in September. Under the guidance, humanoid robot startups seeking to go public must now show steady revenue, shrinking losses, or genuine innovation.

The warnings intensified after shares of Unitree Robotics, China’s best-known humanoid maker, fell by half from their peak following a listing in Shanghai. Even so, AgiBot, ranked alongside Unitree as a sector heavyweight, is raising 1 billion to 1.5 billion yuan at a valuation near 50 billion yuan.

These developments put funding, operating performance, and market access on separate tracks. China leads the capital race and production volume, but its regulators are demanding clearer evidence of commercial progress, while US measures could limit where Chinese-made systems can be approved, sold, or used.

Washington moves to restrict Chinese robots

As Chinese firms raise and build, US policymakers are working to shut the door. On June 3, three House members — John Moolenaar, Jay Obernolte, and Jennifer McClellan — introduced the GUARD Act, which would allow national security agencies to review humanoid and four-legged robots made by rival countries and ban imports deemed a threat.

On July 28, the FCC added foreign-made advanced robots to its Covered List, meaning they cannot receive FCC approval unless the Department of War grants conditional permission. Separately, the House passed a defense bill whose Section 163 would bar the Pentagon from buying or operating Chinese, Russian, or Iranian humanoid systems.

The legislative push comes as Chinese manufacturers already dominate global shipments. Cryptopolitan reported that Chinese firms took 86% of the more than 22,000 humanoid units shipped in the first half of 2026. The next policy and industry checkpoints therefore include whether Chinese startups can meet the revenue, loss, and innovation standards cited by regulators, and how the proposed US restrictions affect access to American communications approvals and government procurement.