Chinese regulators have quietly slowed domestic IPOs by AI humanoid robot companies, according to Reuters, after AI-themed fundraising raised questions about real demand.

Reuters reported Monday, citing sources familiar with the matter, that Chinese regulators are holding back IPO applications for humanoid-robot listings through so-called "window guidance" - a practice where regulators informally instruct institutions rather than issuing published rules.

One source said such IPOs had effectively been frozen, while another said the slowdown was specific to the sector, according to the report.

Earlier this month, The Information reported that the China Securities Regulatory Commission (CSRC) is tightening IPO approval for humanoid startups, and has given "window guidance" to some investment banks and companies that it wanted proof that they ​can generate recurring revenue and are on track to achieve real innovation.

While China continues to promote "embodied intelligence" - AI that can act and interact in the physical world, usually through a robotic body - as a strategic emerging industry, the rush of investments from private capital and local governments has raised regulators' eyebrows.

Volatility

One spark was the Shanghai debut of Unitree Robotics, which went public on the STAR Market on Aug. 19. The stock surged 460% on day one, but has since fallen 41%. It closed down 3.9% at 494.85 yuan ($73.90) on Monday.

Several other humanoid robotics firms, including Deep Robotics, X Square Robot, and AGIBOT, have also planned public listings.

Regulators are also focusing on revenue quality, according to Reuters. A large portion of reported sales at some companies comes from local-government data-collection centers - sites where robots are run to generate training data, the report said.

In some cases, local governments could provide 80% to 90% of initial investment, and projects can provide booked orders as revenue to help a company clear listing thresholds, per the report. Regulators are questioning whether that appropriately accounts for demand from independent customers.

One source told Reuters that valuations at some firms could fall 60% to 70% if such revenue tied to data collection centers were stripped out.

The Latent has reached out to the CSRC for comment.