How AI Supports Real-Time Decision-Making in Saudi Arabia's Airports and Ports

Airports and ports require an intelligent operational layer that connects data, processes, and resources to support better decision-making during disruptions. (Adobe)
Airports and ports require an intelligent operational layer that connects data, processes, and resources to support better decision-making during disruptions. (Adobe)
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How AI Supports Real-Time Decision-Making in Saudi Arabia's Airports and Ports

Airports and ports require an intelligent operational layer that connects data, processes, and resources to support better decision-making during disruptions. (Adobe)
Airports and ports require an intelligent operational layer that connects data, processes, and resources to support better decision-making during disruptions. (Adobe)

Infrastructure investment in Saudi Arabia is entering a new phase, one measured not only by the airports, ports, logistics corridors, energy systems, and digital infrastructure that have been built, but also by the ability of these assets to operate as a single integrated system.

The next source of value will not come solely from expanding capacity, but from improving the decisions that determine how aircraft, ships, cargo, energy, and data move from one moment to the next. At this stage, artificial intelligence becomes part of the operational equation itself: how can major infrastructure assets be transformed into operations that are more efficient, reliable, and resilient in the face of disruptions?

Bilal Abu-Ghazaleh, Founder and CEO of 1001. (Company)

In an exclusive interview with Asharq Al-Awsat, Bilal Abu-Ghazaleh, founder and CEO of 1001, a startup developing sovereign artificial intelligence that recently raised $30 million in a Series A funding round, said the difference between building assets and operating them efficiently is the difference between capacity and performance.

"Building an airport, a port, or a logistics corridor gives you capacity, but it does not automatically ensure the best use of it," he said. "A larger asset does not manage itself more efficiently. Instead, it creates a greater number of decisions that must be made correctly."

Intelligence Built into the Design

This idea lies at the heart of understanding the next phase of Saudi Arabia's transformation. Every new asset adds not only physical space or operational capacity, but also an entirely new network of relationships and interdependencies. A new airport terminal, an additional port berth, or a new logistics corridor does not function in isolation from the rest of the system. A delay involving a single aircraft or vessel can alter gate or berth assignments, triggering a chain reaction that affects truck movements, customs operations, warehouses, delivery schedules, and workforce allocation.

Abu-Ghazaleh explained that adding a new terminal, berth, or corridor also means "adding thousands of new connections between things that influence one another." Given the speed and scale of Saudi Arabia's development, he said, no human team, regardless of its experience, can keep track of all these relationships and consistently make the best decisions in real time.

Yet this challenge also presents an opportunity. Countries with aging infrastructure are often forced to introduce artificial intelligence after decades-old systems are already in place. Saudi Arabia, by contrast, can embed an intelligent operational layer into new projects such as King Salman International Airport and newly developed ports and rail networks from the design stage rather than years after operations begin.

Abu-Ghazaleh argued that "most countries around the world are stuck trying to bolt artificial intelligence onto legacy systems," whereas Saudi Arabia has the opportunity to design intelligence directly into its infrastructure assets from the outset.

Solving Complex Problems

At airports and ports, the most difficult challenges are not always a lack of capacity but a lack of coordination. That is why building more facilities, hiring more staff, or introducing another conventional software system is not enough. When a vessel is delayed at a major port such as Jeddah Islamic Port, or when a disruption occurs at a large airport, it sets off a chain of decisions: Which berth should be assigned? How should cranes be rescheduled? What happens to trucks and rail operations? How should yards, warehouses, and resources be reorganized?

Abu-Ghazaleh said, "The hardest problems in airports and ports are not capacity problems. They are coordination problems." He stressed that these cannot be solved simply by pouring more concrete or increasing the workforce. Adding more people can actually increase the coordination burden without necessarily providing a unified view of all the interconnected variables.

Conventional software also cannot fully bridge the gap because the core issue lies in fragmented data spread across multiple systems: one for transportation, another for warehouses, a third for enterprise resource planning, and others for customs or maintenance. Each system performs a specific function within its own domain, but none has visibility across the entire operation. The challenge, therefore, is to build a living operational model that unifies data, relationships, and business rules, enabling decisions to be made based on a single, comprehensive view of the system.

Deploying artificial intelligence in critical infrastructure requires human oversight, explainability, auditability, and a record of every decision. (Shutterstock)

The Role of Operational Intelligence

Abu-Ghazaleh emphasized that there is no single starting point for every industry. The greatest benefit from artificial intelligence may lie in improving capacity utilization at an airline, managing disruptions at a port, optimizing cargo flows across a logistics company, or reducing energy consumption at another infrastructure asset. "We don't start by guessing," he said. "We start by understanding the operation from the inside."

According to Abu-Ghazaleh, 1001's methodology places engineers within clients' teams to understand how an organization actually operates, rather than how it appears in diagrams or presentations. These engineers map workflows, data flows, and the highest-value operational challenges before working with operations teams to identify the first use case capable of delivering a measurable impact. They then build what he describes as a "living operational model," essentially a dynamic digital map that captures assets, processes, business rules, and the relationships between them, while updating continuously in real time.

The significance of this approach is that the value extends far beyond a single use case. Once this foundation has been established, subsequent applications can be developed much more quickly. Abu-Ghazaleh noted that while the first use case typically takes the longest to complete, the second and third benefit from the same underlying model, reducing implementation time from around 16 weeks to roughly four weeks. He added that the returns can be substantial, with a single use case capable of generating more than $100 million in value during its first year.

When a Ship Is Delayed

To illustrate the difference between automation and intelligence, Abu-Ghazaleh uses the example of a ship arriving several hours behind schedule. Such an event does not simply alter one arrival time. It disrupts the entire operational plan. The berth assigned to that vessel may now be needed for another ship, while the cranes and crews waiting for it remain idle. The containers it carries are linked to trucks, trains, and delivery schedules that are no longer aligned, even as the yard has already been organized according to the original arrival timetable.

Automation can handle some routine tasks, such as sending an alert, updating a schedule, or reallocating a slot based on predefined rules. But when real-world conditions diverge from the plan, executing a fixed rule is no longer enough. What is required is a complete reassessment of the operation and the identification of the best recovery plan across thousands of variables within minutes.

Abu-Ghazaleh said this is precisely the type of decision that artificial intelligence can improve because it "sees the entire operation at once." It can rapidly develop a new operating plan by determining which berth should accommodate the delayed vessel, how cranes and yard operations should be reorganized, and how trucks and trains should be rescheduled together while accounting for real-world constraints. Even so, this does not eliminate the role of human operators. The proposed plan is presented to the operator along with the reasoning behind it, while the final decision remains under human control.

AI as Part of the Operation

The risks change when artificial intelligence moves beyond analysis into recommendation or execution. At the analysis stage, the system serves as an advisory tool. If it makes a mistake, a human can identify the error before any harm occurs. But once it begins making recommendations that influence the operation of an airport, port, or energy asset, it becomes part of the operational process itself.

Abu-Ghazaleh explained that "failure in these environments is not a software bug in a report. It is a crisis." For that reason, the standard for trust becomes significantly higher. He identified three essential requirements: consistent reliability, the ability to explain the reasoning behind every recommendation or action, and the recording of every step so that decisions can be audited and reversed when necessary.

He added that the system must be governed rather than trusted unconditionally, while human operators must remain in control. The system should earn greater autonomy gradually, "one decision at a time."

This also explains why many AI projects struggle to move from the pilot stage to live operations. The gap is not merely technological. It is also operational and institutional. There is a significant difference between a convincing demonstration and a system that an operator is willing to trust alongside an airport runway or on a port berth. As a result, system governance, auditability, and operational continuity become essential requirements for deployment in critical infrastructure rather than optional features that can be added later.

The Challenge of Incomplete Data

Large-scale operations often contend with fragmented or incomplete data, particularly when they rely on legacy systems. Abu-Ghazaleh believes the answer is not to wait for perfect data, but to build integration and data lineage instead.

"You will never get perfectly clean data from systems that are decades old, and you do not need to," he said. The objective is to bring together scattered data sources within a consistent operational model while ensuring that every recommendation can be traced back to the data, logic, and alternative options on which it was based.

He added that data alone cannot capture everything that happens within an operation. A significant portion of operational knowledge exists only in the minds of the people who manage these systems every day and is not stored in any database. According to Abu-Ghazaleh, 1001 uses AI agents to capture that context directly from operational teams and integrate it into the model alongside system data. When data gaps or conflicts between sources emerge, they should be made visible to the operator rather than concealed, and the decision should be escalated to a human instead of having the system rely on guesswork.

Sovereignty Alone Is Not Enough

Sovereignty remains an important part of the discussion, particularly when it comes to critical infrastructure. However, Abu-Ghazaleh cautions against equating resilience with local deployment alone, arguing that "deploying systems locally does not automatically make them resilient." In his view, two distinct risks must be addressed: the risk of foreign control, and the risk of depending on a single component, facility, or supplier, even within the domestic market.

From this perspective, sovereignty addresses the risk of an external "kill switch" by ensuring that data, models, and infrastructure remain under national jurisdiction. Resilience, however, also requires an architecture that is not locked into a single model, vendor, or location. Abu-Ghazaleh told Asharq Al-Awsat that this is why model- and vendor-neutral infrastructure is essential, along with the ability to operate across both cloud and on-premises environments. He also stressed the importance of dividing systems into distinct components so that the failure of one does not bring down the entire operation.

He summarized the relationship succinctly: "Local control without redundancy and alternatives is fragile, while redundancy without control leaves you exposed." In other words, intelligent national operations require both sovereignty that reduces external dependence and resilient system design that minimizes domestic points of failure.

The Skills That Matter After Computing Infrastructure Is Built

In recent years, many countries have focused on building data centers and expanding computing capacity. Abu-Ghazaleh argues, however, that leadership in artificial intelligence will not be determined by computing power alone, but by applied AI, meaning the integration of intelligence into real-world operations.

"Applied AI is not won in the laboratory," he said. "It is won inside the most demanding live operations."

In his view, Saudi Arabia holds several advantages, including major infrastructure across aviation, ports, energy, and logistics, the ability to move quickly when institutions are aligned, new projects into which intelligence can be embedded from the outset, and the capacity to invest at scale. Turning those advantages into measurable performance, however, requires three capabilities: a data foundation that transforms fragmented systems into a unified decision-making asset, engineers who understand both software and operational environments, and institutional leadership willing to redesign decision-making processes while maintaining governance, security, and auditability.

If these capabilities are in place, computing infrastructure becomes a productive investment. Without them, it risks becoming expensive but underutilized capacity. As Abu-Ghazaleh put it, shortcomings in these areas turn investment into "costly idle capacity."

The Next Measures of Success

Abu-Ghazaleh believes Saudi Arabia's success will be measured by its ability to move beyond building AI infrastructure and begin embedding artificial intelligence into national operations. The true indicators, he said, will be operational rather than experimental.

The first indicator is that AI becomes part of the daily operations of ports, airports, and energy infrastructure instead of remaining confined to pilot projects. "Ninety-five percent of AI never reaches production," he said. The real test is whether day-to-day deployment is reflected in measurable outcomes such as productivity, on-time performance, uptime, and cost.

The second indicator is sovereignty across data, computing infrastructure, and AI models. When critical systems operate using intelligence built on the Kingdom's own data and models, that intelligence becomes a strategic asset that grows with every decision rather than a service that can be priced, restricted, or switched off from abroad.

The third indicator is ensuring that expertise remains within the domestic market through Saudi engineers and accumulated applied experience gained from each successful deployment.

In this sense, the next phase is not simply about adding artificial intelligence to existing infrastructure. It is a test of whether the entire system can transform major physical assets into smarter, more intelligent operations.



Microsoft Arabia Chief Outlines Saudi Arabia's AI Priorities for Next Phase

Ayman Al-Ghamdi, President of Microsoft Arabia (Company)
Ayman Al-Ghamdi, President of Microsoft Arabia (Company)
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Microsoft Arabia Chief Outlines Saudi Arabia's AI Priorities for Next Phase

Ayman Al-Ghamdi, President of Microsoft Arabia (Company)
Ayman Al-Ghamdi, President of Microsoft Arabia (Company)

After years of building infrastructure and regulatory frameworks, Saudi Arabia's challenge is shifting toward how to effectively integrate artificial intelligence into the core operations of institutions. This is the gap Ayman Al-Ghamdi, the new president of Microsoft Arabia, has placed at the top of his priorities as he takes over the company's business in the Kingdom.

In his first media interview since taking office last July, Al-Ghamdi identified three priorities for the next phase: building a trusted cloud foundation, moving AI from experimentation to practical deployment, and expanding local capabilities.

This comes alongside the launch of the Azure region in Saudi Arabia's Eastern Province, the expansion of skills programs, and the development of scalable local solutions that can grow regionally and globally.

The implementation gap within institutions

Al-Ghamdi says Saudi Arabia has completed much of the foundational work required to move toward an economy that relies more heavily on data and AI, pointing to progress in infrastructure, data governance, responsible AI, and capacity building.

In this context, he cites what he described as the progress made by the Saudi Data and Artificial Intelligence Authority, noting that the regulatory ecosystem includes 32 regulatory instruments related to data and 13 related to AI. However, he believes the next phase will depend more heavily on what happens within institutions themselves.

He tells Asharq Al-Awsat: "Many institutions are still treating AI as something to experiment with, rather than integrating it into core operations."

In his view, closing this gap requires linking AI directly to business and service performance and customer experience, while providing the appropriate data, governance, talent, and operating models capable of turning adoption into measurable impact.

This approach forms the central focus of Al-Ghamdi's priorities for his first year. He believes the goal is to make the impact of AI "real, not just a headline," so that it is reflected in how institutions operate, the services they provide, and the results they achieve.

Three priorities for the first year

Al-Ghamdi's first priority is what he calls a "trusted cloud foundation," particularly as the Azure region in the Kingdom's Eastern Province prepares to become available for customer workloads. He links this step to institutions' ability to modernize critical systems securely and responsibly, rather than simply adding more computing capacity inside the Kingdom.

The second priority is moving AI projects from experimentation to practical value. He says the measure of success will not be the number of use cases companies announce, but the extent of improvement achieved in productivity, services, operations, and customer experience.

He points to the O3ai platform, an intelligent system for smart factories developed by Obeikan Group, as an example of what this transition from experimentation to practical use could look like, according to his response.

The third priority is building Saudi capabilities, based on Microsoft's commitment to help 3 million people in Saudi Arabia acquire AI skills by 2030. He says the objective is for the transformation to be built and sustained locally, because "technology alone does not create transformation, people do."

The cloud region... more than local hosting

Al-Ghamdi does not present the launch of the Saudi cloud region simply as a matter of capacity or data residency. Instead, he links it to the ability of companies and government entities to modernize critical workloads and prepare to expand their use of AI.

He notes that expansion at the national level requires an integrated set of elements, including cloud readiness, data infrastructure, security, governance, skills, and a strong partner network. From this perspective, he believes the broader impact of the new region could emerge through a greater share of digital value creation shifting into the Kingdom.

He says this could mean more local solutions, deeper technical capabilities, greater innovation among partners, and, over the longer term, the production of intellectual property capable of serving the Saudi market and other markets in the region.

A more competitive market

Al-Ghamdi views the growing range of choices available to Saudi customers among local and global cloud service providers as a positive development, considering it a reflection of a "strong and rapidly maturing" market. As cloud capacity expands and access to advanced AI models becomes easier, he does not believe competition will remain focused solely on who owns the infrastructure or the model.

He notes that "differentiation will shift from access to impact," explaining that the question will not simply be who has the model, but who can help institutions use it safely and responsibly in ways that genuinely change how they work.

He links this to an effort to bring cloud, data, cybersecurity, productivity tools, business applications, developer tools, and model options together on a single platform, making AI part of daily workflows, decisions, operations, and customer experiences.

He also emphasizes control over the data, context, and institutional knowledge that distinguish each organization. Al-Ghamdi sums up the elements of competition on which Microsoft is betting in three concepts: "trust, choice, and control," alongside the ability to turn AI into measurable impact at scale.

Uneven returns from AI

Despite the acceleration of investment in generative AI, Al-Ghamdi acknowledges the risk that institutions may move toward these technologies faster than they can address problems with data, processes, and governance.

He says generative AI can accelerate what an organization is already doing, but it "cannot compensate for weak data foundations, fragmented processes, or the absence of clear governance." He believes institutions achieving stronger results are those that treat AI as part of business transformation rather than as a standalone technology project.

He cites the experience of Ma'aden, saying its teams save more than 2,200 hours per month using Microsoft 365 Copilot, Copilot Studio, and Azure OpenAI Service. In his view, the speed of adoption should not be considered separately from the quality of the foundations supporting it. He says security and governance must advance at the same pace, so the question is not whether an institution is moving too quickly, but whether its organizational, data, and security infrastructure is moving with it.

From consuming technology to producing it

Al-Ghamdi believes the next phase in Saudi Arabia is not only about using global platforms, but also about increasing the country's ability to build technologies from within the Kingdom that can expand beyond it.

He says Microsoft's role in this area is to provide cloud infrastructure, AI and cybersecurity tools, data platforms, and support from its partner ecosystem to Saudi companies, startups, and developers. He also stresses that the local cloud region can help build and host solutions inside the Kingdom while meeting data residency and regulatory requirements.

He adds that the long-term opportunity is for more Saudi institutions to move "from consuming technology to producing it," including by developing intellectual property, platforms, and AI solutions capable of competing regionally and globally.

Digital sovereignty... and local capability

Asked about digital sovereignty and the distinction between data residency, operational control, and technological independence, Al-Ghamdi focused in his response on increasing local capacity to build and host solutions inside the Kingdom.

He noted that the presence of local cloud infrastructure enables innovators to develop and host solutions within Saudi Arabia while taking data residency and regulatory requirements into account, linking this to the shift from using technology to producing it.

Al-Ghamdi did not directly distinguish between data residency, operational control, and technological independence. Instead, he linked the issue to the ability of Saudi companies, startups, and developers to retain a greater share of technological value, knowledge, and intellectual property within the Kingdom.

A role beyond infrastructure

Al-Ghamdi traces Microsoft's role in Saudi Arabia to more than 25 years of work with the government, institutions, companies, developers, partners, and educational organizations, including cooperation with the Ministry of Communications and Information Technology in cloud, skills, and responsible AI.

He says the current phase raises the level of responsibility from simply providing technology to turning it into national outcomes, such as improving services and productivity, strengthening secure digital environments, and creating broader opportunities for Saudi talent.

Al-Ghamdi takes up his position after more than 15 years of experience at Microsoft. Before that, he led the company's public sector business in Saudi Arabia, covering government entities, national institutions, education, and healthcare, in addition to participating in initiatives related to government cloud regulation and the National Analytics Platform. His career has also included roles at Oracle and Google.

The three-year test

In response to a question about the criteria by which his tenure could be assessed after three years, Al-Ghamdi did not tie success to business volume or the number of products sold. Instead, he framed it more broadly around turning AI ambitions into tangible results.

"After three years, I will measure success through one question: Did we help Saudi Arabia turn its AI ambition into progress that people can see?" he says.

He defines this in terms of the expansion of trusted cloud infrastructure across institutions and critical sectors, the transition of AI from experimentation to measurable improvements in productivity, services, and customer experience, as well as an increase in the number of Saudi talents, partners, and developers capable of creating digital value from within the Kingdom.

Within this framework, the phase described by Al-Ghamdi centers on testing whether technology investments can move from adoption to execution, and from the use of models and platforms to measurable outcomes in productivity, services, skills, and intellectual property within the Saudi economy.


Xiaomi Sees Smartphone Cost Pressures Easing, Looks to EVs for Growth

Xiaomi is increasingly relying on electric vehicles and artificial intelligence as it seeks growth drivers beyond its increasingly saturated core business of smartphones. - File Photo
Xiaomi is increasingly relying on electric vehicles and artificial intelligence as it seeks growth drivers beyond its increasingly saturated core business of smartphones. - File Photo
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Xiaomi Sees Smartphone Cost Pressures Easing, Looks to EVs for Growth

Xiaomi is increasingly relying on electric vehicles and artificial intelligence as it seeks growth drivers beyond its increasingly saturated core business of smartphones. - File Photo
Xiaomi is increasingly relying on electric vehicles and artificial intelligence as it seeks growth drivers beyond its increasingly saturated core business of smartphones. - File Photo

China's Xiaomi Corp said the worst period of pressure on its smartphone business had passed as the pace of memory price increases looked set to slow in the second half, while it sees its fast-growing electric vehicle business delivering a larger share of revenue.

Xiaomi on Tuesday posted a 42.6% fall in second-quarter adjusted net profit to 6.2 billion yuan ($919.5 million), missing analysts' estimates, as historically high memory and other component costs squeezed margins for the maker of smartphones and electric vehicles.

Analysts had on average expected 6.6 billion yuan, according to LSEG data.

Revenue fell 6.1% from a year earlier to 108.9 billion yuan, also missing the 112.2 billion consensus forecast.

"Significant increases in key component costs, including memory, along with intensified industry competition, continued to create headwinds for our business," Xiaomi said in its earnings statement.

MEMORY COSTS REMAIN HIGH

In a post-earnings call, Xiaomi President William Lu said memory costs remained at historically high levels in the second quarter, as higher component costs weighed on margins in Xiaomi's smartphone and tablet businesses.

Xiaomi's smartphone revenue fell 7.5% year-on-year to 42.1 billion yuan, while its smartphone gross margin declined to 8.5% from 11.5% a year earlier.

Xiaomi, ranked as the world's No. 3 smartphone maker, shipped 31.2 million smartphone units in the quarter, down 26% from a year ago, for a second consecutive quarter of decline, research firm Omdia said.

With more than half its shipments priced below $200, Xiaomi was the most exposed among the top five smartphone vendors to memory cost inflation, Omdia added.

Yet Xiaomi said the pace of memory-price increases had started to slow and should continue to slow in the second half.

Lu said the most difficult period for the smartphone business had passed, adding that Xiaomi had adjusted its product mix and launch schedule.

EV BUSINESS PLAYS A BIGGER ROLE

Xiaomi is increasingly relying on electric vehicles and artificial intelligence as it seeks growth drivers beyond its increasingly saturated core business of smartphones.

Its EV, AI and other new initiatives segments accounted for about 23% of total revenue, up from 18.3% a year earlier.

EV revenue alone rose 15.9% to 23.9 billion yuan.

The domestic car market has been in steady decline since late 2025, while other Chinese carmakers are aggressively expanding exports. Xiaomi plans to enter European markets in 2027.

The loss from operations related to its EV, AI and other new initiatives was 2.6 billion yuan, reflecting the company's continued investments in those areas.

Xiaomi delivered 104,199 vehicles in the second quarter, up 28.2% from a year earlier.

In July, Xiaomi unveiled its SkyNomad SUV series, expanding beyond battery-powered sedans and crossovers into a category popularised by models from Chinese peers.


Beyond Marathons and Backflips, China’s Robots Face a Commercial Test

 Children look at a remote-controlled robot by Unitree Robotics while visiting the Unitree Robotics Embodied Intelligence Experience Center in the Jing' an district in Shanghai on August 17, 2026. (AFP)
Children look at a remote-controlled robot by Unitree Robotics while visiting the Unitree Robotics Embodied Intelligence Experience Center in the Jing' an district in Shanghai on August 17, 2026. (AFP)
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Beyond Marathons and Backflips, China’s Robots Face a Commercial Test

 Children look at a remote-controlled robot by Unitree Robotics while visiting the Unitree Robotics Embodied Intelligence Experience Center in the Jing' an district in Shanghai on August 17, 2026. (AFP)
Children look at a remote-controlled robot by Unitree Robotics while visiting the Unitree Robotics Embodied Intelligence Experience Center in the Jing' an district in Shanghai on August 17, 2026. (AFP)

China's humanoid robot makers have spent the past two years dazzling investors with machines that can breakdance, throw punches and even set marathon records. This week in Beijing, they face a tougher test in proving their inventions can work reliably to generate economic value.

More than 300 companies are expected at the World Robot Conference from Wednesday through Sunday, showcasing over 2,000 exhibits and launching more than 150 products, according to Beijing authorities.

The conference coincides with the Shanghai stock market debut of Unitree, one of the world's largest humanoid robot makers by sales volume, after an initial public offering that was more than 8,000 times oversubscribed by retail investors.

Unitree founder Wang Xingxing will address the conference's main forum on Thursday on the next decade of the humanoid industry, according to the Beijing municipal government.

The event comes as investor enthusiasm around Chinese humanoids reaches new ‌heights, but the conversation ‌is shifting from viral demonstrations to commercial reality. Investors and customers are increasingly judging robots ‌not ⁠by how spectacularly they ⁠move, but by how productively they work, how much human supervision they require and whether they can earn a return on their cost.

Although robots in China are starting to replace human workers in niche applications such as hotel food deliveries and on some assembly lines, large-scale adoption across industries beyond limited pilot projects has yet to occur.

FROM DEMOS TO DEPLOYMENT

Some in the industry argue that reckoning is overdue. Lumos Robotics, a Mitsubishi Electric-backed startup exhibiting at WRC, has focused its MOS robot on industrial inspection and material handling rather than household or entertainment applications.

CEO Yu Chao told Reuters the companies most at risk in China's crowded embodied-AI sector were those developing ⁠robot bodies, models or data in isolation without proving their technology in actual applications.

For Yu, the ‌eventual shakeout will come down to a simple question: can a robot ‌create value for a customer? Companies that cannot, he said, "will be washed out."

Georg Stieler, a robotics analyst who advises industrial companies in China, ‌estimates that 50% to 70% of humanoid robots produced this year could end up in "data factories", where they are used ‌to collect training data rather than perform productive work for paying customers.

Guotai Securities, a Chinese brokerage, estimates an industrial humanoid would need to cost about 160,000 yuan, including maintenance, to pay for itself within two years compared with a worker earning 80,000 yuan annually.

In reality, such robots typically cost 300,000 to 500,000 yuan, according to Berlin-based think tank MERICS.

ROBOT GAMES TEST WORK ABILITY

Some of the industry's claims will face ‌a more public test from Saturday.

The World Humanoid Robot Games, running from August 22 to 26 at Beijing's National Speed Skating Oval, will combine headline-grabbing races, football and fighting with ⁠a growing number of competitions designed ⁠around actual work.

Official plans include factory, hotel and household scenarios, with organizers requiring robots in some events to perform longer, continuous tasks in complex environments.

The competition schedule reviewed by Reuters includes packing and warehousing, industrial assembly and material feeding, retail and office services, electric-vehicle charging and dexterous tasks such as connecting cables and using tools.

Unlike a sprint or dance routine, such tasks test whether robots can identify unfamiliar objects, manipulate them repeatedly, recover from mistakes and complete jobs without engineers stepping in.

A GLOBAL PROBLEM

The challenge of turning impressive demonstrations into economically viable products is not confined to China.

In the United States, Jerry Wang, CEO of AIxCrypto Holdings, recently launched RoboShare, a marketplace designed to let businesses rent robots by the task rather than buy them outright.

Wang said one of the biggest bottlenecks today is not the robots themselves but the surrounding ecosystem. Skilled operators remain scarce, while transportation, deployment and maintenance costs can make robotic labor uneconomic.

Geopolitics is adding another layer of uncertainty. The US Federal Communications Commission in July restricted new equipment authorizations for foreign-made advanced robotic devices, affecting companies including Unitree, though previously authorized models can still be sold.

Technology research firm IDC estimates China accounts for 82% of global humanoid shipments. Under its worst-case scenario for the US restrictions, US humanoid sales would be 58% below its prior baseline forecast by 2030.