AI, Automation, and the Impact on Investment Opportunities
How AI and robotics are reshaping industries in China and elsewhere, creating new investment risks and opportunities
A Trip into the Future - Visiting Shenzhen
In December, I spend my Christmas vacation in Shenzhen—the Silicon Valley of China, if you want to put it that way. But really, Shenzhen is more than just a hub of innovation; it’s the testing ground for all of China. The government rolls out its latest ideas here first, like a massive trial run. If something clicks, it’s then pushed out across the country. And once it works in China? Well, the rest of the world might want to start taking notes. If you ever get the chance to see this city in action, take it. But be warned: your sense of the present might just get a little squashed by the sheer force of the future.
I had coffee delivered by drone in a park while riding a bike—yep, I ordered it to a spot far off, and by the time I got there, the drone was already dropping it off. Not exactly ideal for my coffee consumption habits, but hey, who’s complaining when the future’s knocking?
Meanwhile, Meituan’s service robots were busy delivering my online purchases straight to my hotel room. But these service robots are actually nothing new—I already saw them back in 2018 in Meishan, a third-tier city near Chengdu.
Then, I hopped into an autonomous taxi—not on some fancy test track, but on the actual roads of a city with 17 million people who seem to treat traffic laws as guidelines not rules.
And yet, it all just worked. It felt like I’d time-traveled a few decades into the future, except I was still enjoying Shenzhen’s mild December weather—just one small step for man, one giant leap for coffee delivery.
Back in Shanghai, life returned to its usual rhythm—until I came across a tweet that made me think. Someone was arguing that people without kids are selfish, as they expect others to raise children and later depend on them for pensions and elderly care.
This sparked an interesting thought. For centuries, having more people has been an advantage. Just look at China—the size of its population has played a major role in its global influence. But what if we’re entering a time when having fewer people is actually a strategic advantage? Could the old “more is better” formula finally be out of date?
The Acceleration of AI and Robotics
When it comes to predictions, there are two kinds: the brilliant, mind-blowing insights that leave everyone wondering, “How did they see that?” and the more straightforward extrapolations, where you look at what’s already in play and say, “Well, yeah, that’s going to happen next.”
What I’m talking about here? It’s not the first category. No, I’m not about to blow anyone’s mind with some hidden genius. I’m just looking at the technology we have, seeing its trajectory, and thinking, “That’s going to keep getting better.” So, what I’m saying is: it’s not a matter of if—it’s a matter of time.
This kind of leap in capability isn’t new. It takes me back to a mathematics and neuroscience conference I attended at UCLA in 2012. A researcher pointed out how computers had a tough time recognizing license plates if they were dirty, at an odd angle, or in bad lighting. Back then, it felt like an unsolvable puzzle, but it was obvious that it would eventually be resolved. Fast forward just three years, and China had already rolled out automated license plate recognition across the country. Now, every mall logs your plate without you even blinking an eye.
The developments in AI and robotics aren’t particularly surprising—they’re more about scaling up what’s already available at small scale today. But the implications? Well, those are nothing short of massive.
What will change?
Take Meituan, one of my favorite companies in China. In China, you can swap JD for Alibaba, Alibaba for Pinduoduo—no problem. But try living without WeChat or Meituan? Good luck, my friend. Their edge is a huge army of riders who deliver everything, from noodles to nail clippers, in minutes. This “instant delivery” is something no other e-commerce giant has quite managed to commoditize at scale. But Meituan’s management is no fool. They (and of course also others) are already testing autonomous delivery vehicles in Shenzhen.
Today, Meituan’s massive army of riders serves as a powerful competitive advantage, and no other competitor can match them in terms of scale. This scale allows them to deliver efficiently and push delivery prices down in a way that no one else can replicate. But let’s be real—it’s not hard to predict that in 20 years, or probably even less than 10 or even 5, this moat will completely vanish. Couriers will be swapped out for drones, autonomous vehicles, and whatever else the future has in store.
And it’s not just the people zipping around on scooters. White-collar work—from coding to law to medicine—is facing an equally existential shakeup. AI is drafting contracts, diagnosing diseases, and writing code snippets so fast, often better, and more reliably (at least they’re not tired or going through a divorce). Is this a new frontier?
Skeptics point out that we’ve survived similar transitions before. From hunting and gathering to agriculture, and later from agriculture to industry, we’ve always had better tools—first horses and oxen, then steam engines, and eventually software supporting engineers and accountants with spreadsheets. With each shift, people were given more powerful tools, allowing them to do more work in less time. And when that manpower was freed up, we always found a way to reinvest it into developing even more powerful tools.
The Critical Difference
A spreadsheet never plugged in the numbers itself; it needed you to tell it what to calculate. A factory robot needed a human to program it and keep an eye on things. But now, AI and humanoid robots can learn and adapt independently. They’re not just advanced calculators; they’re more like actual co-workers than tools—never call in sick, and never spend 20 minutes in the break room gossiping about the boss.
Who are the winner and who are the losers?
So, who are the winners in this AI game, and who’s getting left behind? Sure, replacing people with software and robots sounds like a dream for a lot of companies—tech firms, e-commerce firms, law firms, hospitals, you name it. But here’s the problem: if everyone’s using the same tools, does anyone really have an edge? Sure, in the short term, costs might go down, but in the long term, competition’s just going to eat away at whatever margin you thought you had. Welcome to the race to the bottom. No one’s really winning, except maybe those who make those robots or AI tools.
In the rest of the article, I’ll see how competitive moats can quickly turn into burdens in a rapidly evolving landscape—and take a look at what the future of work might actually look like in an AI-driven world.
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