In 2020, humans have been replaced by robots in boxing. Charlie Kenton (Hugh Jackman) is a former boxer who owns such a robot, Ambush, competing in unsanctioned matches and in exhibitions with it. At a rural fair, Ambush is destroyed by Black Thunder, a bull belonging to promoter Ricky (Kevin Durand). Having made a bet that Ambush would win, Charlie now owes Ricky $20,000, which he doesn’t pay before leaving.
Charlie is informed his ex-girlfriend has died, and that he must attend a hearing to decide the fate of his preteen son Max (Dakota Goyo). Max’s aunt Debra (Hope Davis) and uncle Marvin (James Rebhorn) want full custody, which Charlie gives them in exchange for $100,000, $50,000 of it in advance, on the condition that Charlie take care of Max for three months while the couple are away on a second honeymoon.
Charlie and Max meet with Charlie’s childhood friend Bailey Tallet (Evangeline Lilly), who runs the boxing gym of her deceased father, Charlie’s old coach. There, Charlie buys a secondhand WRB league robot, the once-famous Noisy Boy, and arranges for it to fight the illegal circuit’s champion, Midas, at a venue belonging to his friend Finn (Anthony Mackie). Partly due to his inexperience with Noisy Boy’s combinations and partly due to his overconfidence, Charlie ends up losing control of Noisy Boy and Midas destroys it.
Charlie breaks into a junkyard with Max to steal scraps that he can use to put a new robot together. There, Max falls over a ledge, where he is saved from doom after being snagged by a lodged and buried robot arm. After Charlie pulls him back up, Max uncovers the entire robot, called Atom. On Max’s insistence, Charlie takes it back to Bailey’s gym, where they discover Atom is an obsolete Generation-2 sparring bot built in 2014. Atom has been designed to sustain massive damage, but is unable to deal much damage itself. Partly due to Max’s insistence and partly due to Charlie needing money, the duo takes Atom to fight an unsanctioned outdoor match against a robot called Metro, and Atom wins, earning back some of Charlie’s money.
Max later upgrades it to take vocal commands using spare parts from Noisy Boy and Ambush and successfully convinces Charlie to train the robot. Atom’s string of subsequent wins and high-speed maneuvers, which were rarely seen from a robot, attracts the attention of a promoter from the World Robot Boxing league (WRB), who offers Atom a professional fight against a robot called Twin Cities. Charlie accepts, and Atom wins again, thanks to Charlie’s knowledge of boxing, which allows him to locate a design flaw in Twin Cities. Taking advantage of Atom’s subsequent novelty attention, Max challenges WRB champion Zeus, designed by arrogant genius Tak Mashido (Karl Yune) and sponsored by rich Russian Farra Lemcova (Olga Fonda), who first tries to buy the upstart Atom.
As Max and Charlie leave after the Twin Cities fight, Ricky and his men attack them, and steal their winnings. Feeling guilty, Charlie returns Max to his aunt and uncle, feeling Max will be safer with them, but Bailey convinces him that he can be a better father. Debra allows Charlie to take Max out for one last night, to the Zeus-Atom match. Zeus severely damages Atom while also getting injured, a first for Zeus. Ricky, who had bet Finn $100,000 that Atom would not last the first round, tries to slip away, but is cornered by Finn and his colleagues. In the last round of the five-round match, Atom’s vocal receptors are damaged, and Atom must fight in shadow-boxing mode, copying Charlie’s moves from the aisle. Zeus, now controlled manually by a furious Mashido, expends energy on trashing the defensive Atom, running low on power and turning sluggish as a result. Atom then begins to pummel Zeus, even knocking the seemingly invincible champion down once, but not winning before the round ends. The judges declare Zeus the winner on points, but that robot’s reputation is tarnished, and Atom has become famous as the “People’s Champion”.