What a Google-backed robot startup fears from China

This article summarizes an episode of WSJ Podcast’s video series featuring Jeff Cardenas, co-founder and CEO Apptronik.

Jeff Cardenas, co-founder and CEO Apptronik / Photo credit: EY

Apptronik is a Google-backed company developing humanoid robots. Its CEO, Jeff Cardenas, believes the US is losing the tech race to China, risking its economic future and national safety, all because it lacks a national robotics strategy.

As this competition heats up, his own plan for rolling out robots, building them efficiently, and competing globally reveals the biggest risks and opportunities facing the humanoid robotics industry.

A three-stage plan for deploying robots into society

Apptronik’s plan for bringing humanoid robots into everyday life is built on a premise: start simple and earn public trust.

• Stage one: Industrial base
  Robots are first deployed in predictable places like shipping and manufacturing, where they work alongside expert human operators and the environment is predictable.
• Stage two: Public commercial settings
  Robots are then introduced into public-facing businesses such as retail and healthcare. They will work around the general public, including children and the elderly, requiring a higher degree of safety and interaction capability.
• Stage three: The home
  The final and most challenging stage involves placing robots in homes to provide assistive care.

An echo of the 1980s PC boom
Cardenas likens the current moment to the dawn of a new hardware era, saying, “the thing I like to point out is that this is basically the personal computer for robotics. I think of the humanoid as the general purpose platform that can scale, but it’s early. This is the ’80s maybe if you use that analogy.”

A 2035 target for home deployment
“I think that by 2035, you will see these robots in homes,” Cardenas projects. “The question is, how quick is that uptake? And I think that’s a point of debate, but I think we’re now on the window and I think you’re gonna see a very fast acceleration.”

Building robots without building factories

This step-by-step introduction depends on a manufacturing strategy that avoids the massive spending that has sunk other hardware startups. Apptronik is avoiding the cost of building its own factories, a decision Cardenas modeled on the early days of Tesla.

Learning from Tesla’s early days
Cardenas points out that many forget the automaker’s origins.

“Tesla actually worked with contract manufacturers in the early days. People talk about the AI stack and they say, ‘you have to own your AI stack or you’re not competitive.’ Tesla didn’t own Autopilot in the early days. They worked with MobileEye,” Cardenas says. “They worked with other experts at particular areas, and that’s one of the things that allowed them to play for more and more vertical integration over time.”

Choosing where to compete
“The way that I think about building a company like this is you wanna choose your battles,” Cardenas explains. “What we know how to do very well, what I would say better than anyone else in the world, is build amazing robots, build amazing software. So, we’re really focused on that and we wanna work with the best manufacturers in the world.”

The billions required for market dominance

An efficient building method can only take a company so far. Cardenas is clear that staying in business for a long time will require a massive financial boost to compete against a few players with a lot of money.

He is blunt about the financial reality, “the amount of capital that’s required to do something like this at the scope that we aim to will require billions of dollars.”

Why humanoids could become cheaper than cars
Cardenas says, “if you compare a humanoid robot to a car, there’s 96% less raw material by weight in a humanoid robot… from first principles, there’s no inherent reason why these robots have to be expensive and why they won’t be much cheaper than cars as you build up the supply chain.”

China’s government-backed competition

This expensive race is also one between nations. Cardenas sees China as the main competitor, not because of its technology, but because of its national strategy.

A unified national effort
“One of the interesting things that the Chinese companies are doing that’s very difficult to do in the capitalist structure here in the US is they’re working together,” Cardenas observes. “They have open standards for sharing data. They are open sourcing their models and even their hardware designs.”

State funding fuels supply and demand
Cardenas adds, “they have a national robotic strategy… They’ve announced a 1 trillion Yuan national fund, that’s about $138 billion… on the other side, they’re incentivizing demand and uptake from companies. You know, [the Chinese government will] pay for these robots, they’ll give rebates for the robots. And in the U.S., we don’t have a national robotic strategy.”

Robotics as the foundation of national security

China’s organized plan turns a business competition into a matter of national importance. For Cardenas, the race to build and deploy humanoid robots is not just about share of the sales, but about securing America’s future economic power.

How robotics redefines an economy
“What is an economy? An economy is productivity per person,” Cardenas claims. “If you change the number of productive units, you change an economy fundamentally. So, my view is there’s nothing bigger than this.”

Losing this race means depending on a rival nation
“I think robotics will drive national competitiveness and national security in the future,” Cardenas concludes. “You know, that’s why I call this the space race… we don’t want to rely on another government for the technologies and capabilities we need in the future.”

This Too Long; Didn’t Listen (TL;DL) summary was AI-generated and human-reviewed. Read all summaries here.