Tesla And Other US Robotics Giants Demand Federal Strategy To Compete With China's $138 Billion Push — Warn America Will Lose The Race Without It

As China doubles down on robotics and artificial intelligence with a $138 billion state-backed fund, U.S. robotics leaders have urged Washington to establish a national strategy or risk falling behind in the global technology race.

What Happened: Executives from Tesla, Inc. TSLA, Boston Dynamics, now owned by Hyundai Motor Group HYMLF, Agility Robotics, and other American robotics companies met with lawmakers on Capitol Hill on Wednesday, reported the Associated Press.

"We're leading in AI, and I think we're building some of the best robots in the world. But we need a national strategy if we're going to continue to build and stay ahead," said Jeff Cardenas, CEO of humanoid robotics startup Apptronik.

The companies showcased their latest robotic technologies while advocating for a federal robotics office, tax incentives, academic funding, and federally-backed workforce training programs.

Jonathan Chen, Tesla's Optimus Engineering Manager, stressed the importance of scaling, saying, "You create the robots, the question is who's going to scale them?"

See Also: Intel ‘Will Be Fighting For Every Socket' In The Data Center Business, Says Co-CEO Michelle Holthaus As Competition From AMD, Nvidia Heats Up

Rep. Raja Krishnamoorthi (D-Ill.) acknowledged the urgency, noting that China is "devoting a lot of resources very quickly."

The Association for Advanced Automation also supported the idea of a national robotics strategy and highlighted that China and several other nations have already established similar plans.

Without that leadership, America will “not only lose the robotics race but also the AI race,” the association stated.

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Why It's Important: China leads the global market for industrial robots, with approximately 1.8 million machines in operation across factories and other sectors in 2023, according to the Germany-based International Federation of Robotics.

Earlier this week, it was reported that China’s Agibot plans to produce 5,000 robots in 2025, directly competing with Elon Musk’s Optimus.

Nvidia Corporation NVDA CEO Jensen Huang has also projected the widespread deployment of humanoid robots in manufacturing units in the next five years.

Previously, it was reported that Amazon.com, Inc. AMZN has committed up to $25 billion to improve its retail network, including developing robotics-driven warehouses to enhance efficiency.

This investment was aimed at staying ahead of competitors, particularly Temu, which is owned by China's PDD Holdings PDD. 

However, Alibaba Group BABA chairman Joe Tsai appears to have a skeptical outlook. On Wednesday, during an event, he questioned the practicality of humanoid robots.

Price Action: Tesla’s stock fell 5.58% during Wednesday’s regular trading session, closing at $272.06. In after-hours trading, it declined further by 1.34% to $268.41. Year-to-date, Tesla shares have dropped 28.27%, according to Benzinga Pro data.

Benzinga’s Edge Rankings assign Tesla (TSLA) a 67.88% growth rating. Curious how it stacks up against other companies? Click here for the full breakdown.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.