From the studio

Podcast: CIO's Dirk Effenberger on managing geopolitical risks (10 min)

Thought of the day

Sustained AI capital spending and accelerating innovation continues to pull significant funds into a long value chain of AI enablers, infrastructure, and hardware companies. Now, as AI capabilities double roughly every seven months, investors are increasingly looking “Beyond AI” for the next wave of opportunity.

We think a standout example can be found in the emerging category of autonomous systems (spanning humanoids, autonomous vehicles, industrial automation, and more) as increasingly connected supply chains and rapid innovation drive the next wave of growth. We anticipate the global total addressable market (TAM) for humanoids and automation will reach USD 402bn within a decade, growing at a compounded annualized growth rate (CAGR) of 11%.

Adoption is continuing to ramp up, and so is investor interest. Shares in Hong Kong-listed Ubtech Robotics jumped 8.9% on Tuesday after it announced a new industrial procurement contract for its latest humanoid robots.

While the broader automation ecosystem is still in its early stages, with many key companies startups or smaller cap, we see significant opportunities right now as the sector approaches what we view as a turning point:

Demographics will drive humanoid adoption. Aging populations and shrinking workforces are creating unprecedented labor gaps in both developed and emerging economies. Reshoring trends are reshaping manufacturing, with high labor costs and labor scarcity fueling demand for embodied AI strategies, such as humanoid robots, that require minimal human intervention. Regulatory frameworks will need to evolve (and may pose some resistance), but ultimately we think demographic realities should accelerate integration.

Humanoids and autonomous tech transform industries. Vision-Language-Action (VLA) models are enabling humanoids and advanced driver assistance systems (ADAS) to interpret sensory input and natural-language commands, reliably executing complex tasks. We see demand accelerating in manufacturing, logistics, health care, and retail, with existing leaders and challengers that put humanoids and autonomous technologies at the core of their operations poised to generate significant outperformance.

Up-and-coming, lesser-known autonomous beneficiaries can also delivergains. Alongside core automation, “Beyond AI” verticals like agritech, smart glasses, robotic surgery, and electrical vertical take-off and landing (EVTOL) aircraft are also nearing their own inflection points. Autonomous machinery is transforming farming and food production, smart glasses are set for mainstream adoption, and robotic surgery is expanding across medical specialties. We think these segments offer complementary opportunities not yet captured by existing AI strategies.

So, we think investors should consider building diversified exposure to key companies across the humanoids and autonomous systems value chain. As these “Beyond AI” technologies move from pilot projects to scaled deployment, selectivity will be key: Focus on quality companies with robust R&D, scalable platforms, and exposure to both hardware and software innovation. Regionally, China remains a standout for policy support and manufacturing scale, but the landscape is global, with North America and Europe also investing heavily in next-generation automation and regulatory frameworks. Over the medium term, we expect ongoing innovation and maturing regulatory frameworks to unlock further potential gains, but a measured approach is warranted given the embryonic nature of many application streams and amid risks around regulation, tech maturity, and production capacity.