In a strategic move to circumvent U.S. restrictions on advanced robotics, Chinese manufacturers are eyeing Singapore as a crucial entry point to the American market. Vertex Ventures China, a firm backed by Singapore's state investor Temasek, believes that establishing genuine operations in the city-state can unlock access to U.S. buyers for Chinese-made robots, including cutting-edge humanoid models.
Singapore-based Vertex Ventures, backed by Singapore state investor Temasek, has made investments in Chinese robotics startups, including Unitree Robotics.
Choon Chong Tay, managing partner at Vertex Ventures China, explained that by anchoring day-to-day operations, hiring, and controlling critical components like chips within Singapore, Chinese-affiliated startups can demonstrate substantial content in the city-state. This, he argues, should satisfy international trade rules that assign a product's origin based on substantial transformation, thereby enabling exports to the U.S.
This strategy comes as the U.S. government has barred new foreign-made humanoid and other mobile robots from entering the country on national security grounds. This ban impacts Chinese manufacturers who have been at the forefront of robotics innovation, particularly in sectors like humanoid robots and advanced automation, which have seen massive investment. The U.S. market, being the world's largest consumer base, is a critical target for these companies.
Vertex Ventures China, which manages nearly $3 billion in funds, has a diverse portfolio of Chinese startups in robotics, AI, semiconductors, and advanced manufacturing. Notable investments include Unitree Robotics, a prominent humanoid robot maker; Horizon Robotics, an autonomous-driving chip designer; Geek+, a logistics robot provider; Edge Medical, a surgical robot developer; and Lightelligence, a photonics chip manufacturer.
Unitree, for instance, derives over 40% of its revenue internationally, with approximately 18% coming from the U.S. market. Losing this access could significantly impact its revenue growth, highlighting the importance of alternative market entry strategies.
Tay expressed confidence that the economic advantages of Chinese robotics will eventually outweigh political considerations. He believes that U.S. consumers and businesses desire the cost-effectiveness of Chinese manufacturing, a gap not yet filled by domestic industries. "If a Singapore-certified robot is safe and priced right, what other reason do you have to not allow us to export?" he posited.
The firm's investment thesis is now heavily focused on hardware and what it terms 'physical intelligence' – the fusion of AI with robotics. Tay predicts this sector will dwarf the auto industry in size over the next decade. The U.S. ban represents a significant step in the decoupling of emerging robotics industries between the U.S. and China, with potential implications for the broader physical-AI complex, including intelligent vehicles and fixed robotic systems.
Furthermore, Beijing holds a strategic counter-leverage through its dominance in rare earth elements crucial for robotic actuators and motors. This control over critical chokepoints could ultimately shape the balance of power in the global robotics landscape.
