The hardest problem in physical AI may be the magnet, not the model

Actuators cost 40-60% of a humanoid robot, with gearboxes comprising 30-50% of each actuator’s expense. Fewer than a dozen qualified manufacturers and long qualification cycles limit supply. China controls over 90% of rare-earth magnet refining and about 69% of extraction. Europe’s Critical Raw Materials Act limits single-country supply to 65% by 2030 and mandates labeling for magnets over 0.2 kg from 2028, creating a policy-driven shortage despite domestic producers such as Schaeffler.