China Morning Missive
There was a bit of cope out of Silicon Valley last week. Uber tech titan, Mark Andressen, went on an autistic tirade over the future of robots and the urgent need for American policy makers to redirect resources and “reinvent manufacturing for the AI age”. When I stumbled across his comments, my mind immediately went to “it’s already too late”.
Much as I’ve shared in these Notes before, what China has done with EVs will be repeated in the race for dominance in robotics. It is simply an issue of vertical integration. China just has the individual processes already in place not to mention the availability to all critical components.
China is working with the benefit of having already moved into forms of power generation and the ability to convert that power into actual useful, commercial applications. The United States remains mired in knowing there’s a problem and only looking to find where to place blame. There are countless committee hearings and podcast soliloquies discussing the issue at hand. There’s, as of yet, been no meaningful action taken.
Time is quickly running out and there is no better evidence of this than the soon-to-be public offering of Unitree Robotics. Haven’t heard of the company? You’re not alone. Think of it this way. Are you familiar with a company called DJI Technologies? Well, what that company is to the global drone market, Unitree is now positioned to be for the humanoid robotics market.
Granted, in the example of Unitree, the company remains in the early stages of building – at scale – production. Once the company completes its IPO it will still only be valued at $7.0billion. For reference, Apple spent $25.0billion in share buybacks in just the second quarter alone. As an aside, that comparison does make you wonder what Apple could have achieved if it reinvested cashflow rather than buy back shares to support the stock price. That is a story for another day.
What I find to be the critical point here though isn’t the IPO or its size, rather it is the direction of travel. The Chinese are executing on policy directives and rapidly building out a host of future industries. Again, I will stress, it all comes down to vertical integration. None of this infrastructure is even close to being built in America.
https://amp.scmp.com/business/banking-finance/article/3333047/chinas-unitree-robotics-completes-pre-ipo-tutoring-onshore-listing
