Technology
10 min
Insights on the Future of Supply Chain AI
AI is a strategic technology that will lead the new wave of technological and industrial transformation.
July 4, 2024
Mr. Xu is a renowned serial entrepreneur in the internet sector. He has founded several successful enterprises, including Galaxy Internet, Wowo Group, Percent Union, Wei Network, and Focus Wireless. He has also invested in listed companies such as ChineseAll and EGLS, as well as unicorns like Yunwang Na, Pimax, and Panda Selected. He was the first to introduce the concept of life services e-commerce in China, raising over $100 million in funding, and led Wowo Group to its IPO. Xu Maodong also pioneered the industrial internet, promoting the integration of the internet with traditional industries, and today, he is a trailblazer in industrial intelligence.
1. AI Will Spark an Industrial Revolution
Any industrial revolution is always driven by structural changes. This structural change often involves a major cost category transitioning from a marginal cost to a fixed cost. AI technology will replace traditional labor in many fields or provide more efficient labor, changing the cost structure of labor, leading to structural changes in various industries. Undoubtedly, AI is a strategic technology that will lead the new wave of technological and industrial transformation.
2. Supply Chain AI Micro-Models Will Be Ubiquitous
Models will be everywhere, and micro-models will be ubiquitous. For example, healthcare is a model-driven industry; a good doctor is a good model. Similarly, a good fashion designer is a good model, a good architect is a good model, and even a town can be a model. Many industries are essentially driven by strong models.
3. Industrial Intelligence is Deep AI
OpenAI targets general AGI. However, there are even greater opportunities in the AI field, potentially creating several trillion-dollar companies or even those worth tens of trillions. We can broadly categorize AI into two facets: Facet A involves AI based on internet and digital content—native data-based AI that does not rely on offline data, such as OpenAI, video production AI, and fashion design AI. Currently, many AI Applications fall into this category.
Facet B involves AI that relies on offline data, such as medical diagnostics requiring CT scans and blood tests. Facet B can be further divided into B1 and B2. B1 involves gathering data offline and then bringing it online, similar to medical diagnostics. B2 involves directly converting into offline automated execution, with outputs as offline results, such as autonomous driving and robotics—these AI transform completely into commands for offline hardware.
Compared to Facet A's native AI opportunities, I see more potential in Facet B. Analogous to the internet's development, when it combined with offline elements, it exploded with tremendous vitality. E-commerce birthed the first trillion-dollar internet company, Amazon. When AI merges with offline, it will transform many industries and unleash immense power. Especially B2, which will integrate with traditional industry automation and robotics, creating unprecedented wealth in human history. I call native AI "shallow AI," Facet B "deep AI," and B2 as "industrial AI."
4. Industrial Intelligence Will Accelerate Every Industry
Robots will be everywhere, and automation will be ubiquitous. Even Tesla cars will become robots. Ordinary labor will no longer be scarce. Evidently, industrial intelligence will significantly replace labor, increase productivity, and bring structural changes to some industries, leading to massive transformations. In many industries, AI will fundamentally and deeply increase capacity. As the pace of technological development accelerates, the speed of development in each industry will also quicken, making every industry's heartbeat faster.
5. Industrial Intelligence Will Reshuffle Global Industrial Division of Labor
Although the share of industrial intelligence technology in the global economy is currently relatively small, its potential is immense. Even small institutions can use these tools to compete with large institutions and offer superior services. Taking fashion design and manufacturing as an example, when AI completes the design and combines with newly emerged sewing robots, it can fully automate the design and manufacture of garments locally, eliminating the need for offshore processing. The global division of labor will be reallocated, and the scale of ordinary labor will no longer be an advantage.
6. Industrial Intelligence Will Change the Geopolitical Landscape
Industrial intelligence will accelerate human productivity and speed up the development of some industries, also leading to localized manufacturing. By 1870, British steam engines generated four million horsepower, equivalent to the labor capacity of 40 million people. The first country to master the core technologies of industrial intelligence will have a first-mover advantage, equivalent to having vast low-cost, high-efficiency production capacity, potentially at the level of hundreds of billions of labor units. If this advantage is maintained for more than five years, it becomes a generational advantage, overwhelming other countries and leading to further advantages, creating "super prosperous countries" and significantly impacting geopolitics.
