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China's startup market is being reshaped around artificial intelligence (AI) and humanoid robots. Analysts say the country's tech ecosystem is pivoting toward "hard tech" — technology combining physical products with advanced engineering — as the wave of unicorns (unlisted companies valued at $1 billion or more) once led by electric vehicles and e-commerce shifts toward large AI models and advanced manufacturing.
According to Chinese startup data platform ITjuzi on the 6th, 67 companies newly joined the ranks of unicorns in China in the first half of this year. Their combined valuation reached $182.9 billion (about 279 trillion won), with an average valuation of $2.73 billion. The number of new unicorns on a half-year basis is the largest in the past five years.
This surge in unicorns was led notably by AI and robots. Of the 67 new unicorns in the first half, 19 were robotics firms and 17 were AI firms, accounting for more than 53% of the total. Unlike the previous unicorn heyday of 2021–2022, when a range of fields such as new-energy vehicles, biotech, and consumer internet drove growth, this cycle is characterized by its concentration in AI and physical AI.
In the AI field, the rising valuations of China's generative AI firms stood out. DeepSeek received the highest valuation among new unicorns in the first half at about $61.5 billion, followed by video and image generation AI firm Kling AI at $18 billion. A concentration of capital in large AI firms also emerged, with DeepSeek alone accounting for about 60% of the total value of China's new AI unicorns.
In the robotics field, humanoid robot-related firms grew rapidly. XSquare, Spirit AI, and Zhiping Fang were all valued at more than $1 billion. Analysts note that startups are expanding across the entire industrial ecosystem — not only conventional robot manufacturing but also robotic hands, operating software, and robot rental services.
By region, concentration in the four major cities of Beijing, Shanghai, Shenzhen, and Hangzhou deepened further. Of the 67 new unicorns, 51 (76.1%) were based in these cities. Beijing had the most with 19, followed by Shanghai with 18 and Shenzhen with 9. Hangzhou, buoyed by the high valuation of DeepSeek alone, far outpaced the major cities in terms of total valuation.
However, concerns over a bubble are growing alongside the rapid pace of growth. Of the new unicorns in the first half, 34.3% were companies founded within three years, many established by founders from large corporations or spun off from technology organizations. The market sees whether these firms can prove actual revenue and commercialization results within the next one to two years as the key question.
ITjuzi analyzed that "the rise in unicorns in the first half of this year shows that the center of China's technological innovation is shifting from internet consumption to hard-tech fields such as AI and robots," adding that "large AI models and physical AI are becoming the core drivers of a new startup cycle."
Meanwhile, the United States also saw notable unicorn output in the AI field, but unlike China, physical AI firms such as robotics companies were hard to find. Of the roughly 40 companies that became unicorns in the first half of this year, as disclosed by U.S. tech media outlet TechCrunch, the majority were software startups such as AI agents and enterprise software. Because the tally counts only firms that received global venture capital (VC) investment, most of those on the list are U.S. companies. Analysts say the results illustrate the difference between the U.S., which has strengths in software technology, and China, which excels at rapidly mass-producing products based on its manufacturing supply chain.
