The rules that define what's in the China Physical AI Index, how constituents are selected, how positions are sized, and how the index value is calculated.
The China Physical AI Index measures the public-equity performance of Chinese companies whose business depends on artificial intelligence being embodied in the physical world — robots, autonomous vehicles, drones, the sensors and components that give them senses and motion, and the equipment that manufactures them.
It is a rules-based, transparent, public information product published by Tech Buzz China for informational and educational purposes only. The Index is not investment advice, is not an investment product, and is not a recommendation to buy or sell any security. See §11 for full disclosures.
The Index adopts Deloitte's working definition of Physical AI:
"Physical AI refers to artificial intelligence systems that enable machines to autonomously perceive, understand, reason about, and interact with the physical world in real time."
— Deloitte Insights, Tech Trends 2026 (December 10, 2025)
These capabilities show up in robots, autonomous vehicles, AI-enabled drones, smart sensor systems, simulations, and in the AI software and components that make all of those possible. Deloitte uses "Embodied AI" and "Physical AI" as synonyms; this Index follows that convention with "Physical AI" as the umbrella term.
A company qualifies as Physical AI for purposes of this Index if its products or services are dependent on, or directly enable, AI-driven perception, decision, or action in the physical world — regardless of whether those products take a hardware or software form. The test is functional, not formal: a robotics foundation model with no hardware can qualify; a generic LLM cannot. Smart-manufacturing equipment qualifies only if it specifically produces Physical AI products (humanoids, AVs, lidar, drones); generic factory equipment does not.
Out of scope, as a general matter: software AI with no specific Physical AI use case (general-purpose LLMs, search, content, ad tech), hardware with no meaningful AI content (basic conveyor belts, hand tools), and consumer electronics that aren't AI-embodied.
| Tier | Category | Examples |
|---|---|---|
| Endpoints | Humanoid & legged robots | UBTECH |
| Industrial & collaborative robots | Estun, Siasun, EFORT, Han's Robot, STEP, Topstar | |
| Service & consumer robots | Ecovacs | |
| Autonomous vehicles & robotaxis | Pony.ai, WeRide, Joyson Electronics | |
| Drones & unmanned systems | EHang, Autel | |
| Components | Sensors & perception | Hesai, RoboSense, Sunny Optical, Will Semi, Orbbec, Senodia |
| Actuators, motors, harmonic reducers | Leader Harmonic Drive, Inovance, Hengli, Tuopu, Moons' | |
| Edge / embodied AI compute | Cambricon, Horizon Robotics, Black Sesame, Intellifusion | |
| Software | Robotics & embodied-AI foundation models | Sub-sector currently empty in v1 (see Watch list) |
| AV autonomy software stacks | ||
| Robotics simulation & training infrastructure | ||
| Enablers | Smart-manufacturing equipment for Physical AI | Companies producing humanoids, AVs, drones, lidar |
| Connectivity for embodied systems | Quectel |
Tech Buzz China may add or remove sub-categories at any quarterly review based on industry evolution. The boundary between Physical AI hardware and software is expected to evolve — for example, pure-software robotics foundation-model providers may emerge as material public companies, and the sub-category structure will be reassessed accordingly.
The Index draws from companies whose primary listing is on:
ADRs are included only when a company has material dominance in a Physical AI sub-area not adequately represented through A/H listings. The reasoning for each ADR exception is published alongside the constituent list.
A company must satisfy all five:
The Index does not currently apply a formal ESG screen, though the investability screens above already exclude a number of companies on grounds that overlap with criteria institutional investors commonly address through ESG.
Physical AI revenue exposure is calculated at the consolidated reporting entity level using a company's most recent annual report and any interim disclosures available. Equity-method or minority investments in non-consolidated Physical AI subsidiaries are not added back to the parent's exposure; conversely, Physical AI revenue earned by consolidated subsidiaries flows through to the parent's exposure on a fully-consolidated basis. Where a company does not break out Physical AI revenue explicitly, an estimate is made based on segment commentary, management guidance, and analyst coverage, and the estimate's basis is disclosed alongside the constituent record.
The Index targets 40–60 constituents at any point in time. The count is not forced above or below this band; the band exists to balance breadth with concentration.
Constituents are weighted by float-adjusted market capitalization × Physical AI revenue exposure, with concentration caps applied.
For each constituent i:
Effective Market Capi = Free-Float Market Capi × Physical AI Revenue Exposurei
This handles diversified giants cleanly. A $200B company with 10% Physical AI revenue contributes a $20B effective weight; a $2B pure-play with 100% exposure contributes its full $2B.
This is the same family of weighting used by major thematic indices in the robotics and AI space (Global X Robotics & AI, iShares Robotics & AI Multisector). It is transparent, replicable, and well-understood within equity research.
The Index is researched, calculated, and published by Tech Buzz China as part of its broader research output on China's technology sector. Methodology decisions, constituent additions and removals, and revenue-exposure estimates are made by the TBC research team, led by founder Rui Ma, with input from external industry contacts as appropriate.
A public change log records all methodology amendments and constituent changes with the reasoning behind them.
The China Physical AI Index is a public information product published by Tech Buzz China for informational and educational purposes only. Please read this section carefully.
The Index, this methodology, the constituent list, calculated index values, and any related commentary published by Tech Buzz China are not investment advice, not a recommendation, and not an offer or solicitation to buy, sell, or hold any security or financial instrument. Tech Buzz China is not a registered investment advisor and does not provide personalized investment advice. Readers should consult their own qualified financial, legal, and tax advisors before making any investment decision.
The Index is a calculated value derived from publicly available market data. It is not a fund, not an ETF, and not a tradable financial instrument. No investable product tracking the Index exists as of this publication. References to specific companies are descriptive — used to illustrate the methodology — and are not recommendations regarding those companies.
Index values for periods prior to the live publication date are backtested and hypothetical. They are calculated by applying the current methodology to historical data and do not reflect actual trading, actual investor returns, transaction costs, taxes, slippage, fees, or the impact of material economic conditions that would have affected real investment decisions made in real time.
Hypothetical performance has inherent limitations: it benefits from hindsight in defining categories and selecting constituents, and may not reflect the methodology a reasonable index provider would have published in those earlier periods.
Past performance — whether actual or hypothetical — is not indicative of future results.
Securities listed in mainland China (A-shares), Hong Kong (H-shares), and US-listed Chinese ADRs are subject to risks that are not present, or less present, in many developed markets. These include but are not limited to: currency-exchange risk; capital-controls risk; regulatory and policy risk; differences in accounting and disclosure standards; potential delisting and audit-inspection risk for ADRs; and geopolitical risk.
The methodology, constituent list, and weights are subject to change at any quarterly review per the rules in §7.
Tech Buzz China and its affiliates make no representation or warranty, express or implied, regarding the accuracy, completeness, timeliness, or reliability of the data, methodology, or any calculations presented. To the maximum extent permitted by applicable law, none of the foregoing parties accept any liability for any loss, damage, or other consequence arising from any use of, or reliance on, the Index or its accompanying materials.
Tech Buzz China, its team members, and their immediate families may hold positions in some or all of the constituent securities. Tech Buzz China does not currently have any commercial relationship (licensing, sponsorship, sub-advisory, or similar) tied to any fund or product based on this Index. Any such relationship, if entered into in the future, will be publicly disclosed.
This material is published from the United States and is not directed at, or intended for use by, any person in any jurisdiction where such use would be contrary to local law or regulation.
This methodology is a working draft and may be updated as the field evolves and as feedback is incorporated. All material changes are published with the reasoning behind them. The current version is v0.1.
See the References section on the About page for full citations and source links.