Advanced robots have long been confined to the realm of science fiction, gracing our screens in the form of now iconic characters like Terminator, R2D2 or Blade Runner's replicants.

Science fiction is rapidly becoming a reality though, with US company Micropolis announcing this week that it has completed the development of two robotic patrol units for the Dubai police. 

The robots, Micropolis said, are designed for open-road deployment and can hit speeds of 47kph. 

With facial recognition technology and the ability to read license plates, the robots can track suspects and navigate autonomously.

Recent footage posted on X by Elon Musk shows Tesla's Optimus robot practicing Kung Fu alongside a human partner, replicating the moves with frightening accuracy and expert timing. 

While the potential applications of Kung Fu fighting abilities are somewhat limited, the advancement in the sector over recent years demonstrates an expanding number of use cases for robot technology.

Already, robotics is used in manufacturing and healthcare, and the technology has even been deployed in combat in Ukraine.

Experts say the number of applications will inevitably grow, while becoming increasingly cost effective. 

So should investors be looking to include firms making robots in their portfolios? 

Robots could replace human labour 

It is a controversial idea, but one of the most obvious applications for humanoid robots is to do work that was previously done by humans - either more cheaply or more effectively.  

Julian Cook, portfolio specialist at T. Rowe Price Global Technology Fund, says: 'They're designed to replace human labour at lower cost, and as reliability and uptime improve, they could reduce wage pressures and operating costs across industries.'

Critical electrical components such as sensors and batteries have become more powerful and cheaper to produce.

Meanwhile, significant development in the AI sector over the past few years has enabled companies to build robots that can learn and adapt to new tasks, and operate more independently of human control.

YT Boon, fund manager and head of thematic at investment manager Neuberger Berman, says robots could eventually become a form of 'physical AI'. 

'Robotics is rapidly emerging as a transformative application of artificial intelligence in the physical world, enabling automation with intelligence,' he says. 

'This new wave of innovation is not just about mechanisation, but about machines that can perceive, reason, and adapt to complex environments.'

This means they could be well-suited to work on factory production lines, parcel delivery warehouses and perhaps even in shops on the high street. 

'With advances in sensors, computer vision, and deep learning, physical AI is increasingly able to execute intricate tasks previously reserved for skilled human labour, paving the way for smarter factories, logistics hubs, and even service industries to be disrupted,' Boon says. 

'By automating labour-intensive processes and reducing dependency on human labour, robotics can lower unit costs, suppress wage inflation in repetitive roles, and increase economic capacity, though this may also result in greater demand for robotics enabled skills and technologies.'

Tesla boss Elon Musk recently said he expects that Tesla's Optimus will eventually be responsible for as much as 80 per cent of the company's revenue.

He claims Tesla will build between 500,000 and one million robots by the end of 2027.

Cook said: 'While that's a long-term vision, humanoid robots are already moving from lab demos to pilot programs. Early use will focus on simple, repetitive tasks in semi-structured environments like machine tending and material handling.

'Broader deployment will take years, but if Tesla shows real productivity gains and adoption, markets could start pricing in Optimus's value within the next few years.'

Who to invest in if you want to back robotics 

Aside from Tesla, other Silicon Valley giants are also throwing their weight behind robotics. 

Nvidia recently launched a new chip, Jetson AGX Thor, which can be installed into robots as a 'robot brain'.

Boon said Nvidia is 'at the forefront of physical AI, providing the computational backbone for intelligent robots globally'.

Google's Deepmind has been flirting with robotics too, rolling out new vision-language models in September that it says will enable develops to build robots that can solve complex multi-step tasks.

Dan Coatsworth, head of markets at AJ Bell, says: 'We could be on the cusp of a new phase for the robotics industry where advancements in AI lead to more sophisticated capabilities for machines.

'If technological capabilities improve and costs come down, it's plausible that we could see a sharp rise in companies using robotics. That's a compelling narrative for investors looking to play a specific theme.'

China is aiming to be a 'global robotics powerhouse' according to Boon, with the likes of Unitree and UBTech leading the sector and with more than half of the world's humanoid robotics firms based in country.

Cook adds: 'Chinese firms are advancing quickly in humanoids, Robots, and mobile robots, helped by cost and supply chain advantages, though top-tier software and reliability still favour US and Japanese companies.'

In October, Japanese investment giant Softbank agreed to buy the robotics arm of Swiss firm ABB for $5.4billion as it pushes to take a hold in the sector.

ABB, alongside others like Siemens, are 'benefitting from better AI, cheaper components, and faster integration,' Cook said.

European players, Cook adds, are more focused on service, research and remote operation. 

'Only a few are aiming for large-scale industrial use like Tesla or leading Chinese players,' he says. 'Overall, Europe's role in factory-focused humanoid robotics is still limited.'