From DeepSeek to Doom: China’s Bot Blueprint Will Be Next Shock
As China swaps humans for robots the U.S. risks falling behind, stuck in a cycle of exported jobs and ignored warnings.
DeepSeek caught investors off guard.
Wall Street recovered …
But it’s a sign of things to come.
Don’t get me wrong …
America is still a place where innovation is born.
But it’s home to a bunch of minions.
Not those minions.
Actual minions.
As an American - you think of the Chinese as being political minions.
Bowing down to the state.
Kissing the ring of Xi.
Slurping up state media.
American’s do the same shit.
That’s why DeepSeek caught investors off guard …
But a bigger shock is coming.
China bashing is one of the few topics republicans and democrats agree on.
Why would MSNBC probe China policy if it makes Democrats look stupid too?
There’s no incentive for the mainstream media to report accurately on what’s happening in China.
This has created a climate in America where most investors have their head in the sand.
So you have a choice …
Be a political minion, or understand what’s actually going on.
Let’s dive in …
China needs to dominate on automation and robotics for a simple reason.
Population control worked.
I was never a math wiz in school.
But how is China’s going to replace its industrial workforce with people that don’t exist?
Robots of course.
China produces what it calls a “5 year plan”.
Among other things, the last plan drummed up in 2020 called for accelerating social safety nets to encourage spending, alternative energy (electric car) subsidies, and addressing the aging workforce.
Many aspects have gone according to plan.
In 2020 the country had a robot density of around 246 units per 10,000 workers.
The goal was to roughly double that to 500 by 2025.
China is way ahead of schedule.
According to the International Federation of Robotics (IFR) China reached a density of 470 in 2023.
It’s not a huge surprise that China is outpacing the US (which has a density around 300) partly because the manufacturing base has been exported offshore.
A longer discussion could be had about other advantages China has over the west including raw or rare earth materials, but that’s relatively well known and it outside of the scope I’m trying to get across here.
Here’s the deal …
America has been exporting manufacturing and importing cheap labor for several decades now.
Without a coordinated plan in place - America will find itself relying more on China than ever before.
If China wants to - it could attempt cripple America’s ability to develop robotic technology in the same manner the US Chip export controls attempted to limit China’s AI innovation.
Limiting access to key raw materials, bearings, motors, actuators, and other components is one way to stop America from leading a robotics world.
But I believe, in some respects, China will just use the same playbook that has worked for years.
China will commoditize many aspects of the technology leaving little incentive for western companies to invest.
If you believe this is a pipe dream, it’s already happening.
Xiaomi’s Dark Factory is a good example where things are heading.
Reported costs were just 2.4 billion yuan or $330 million to build.
It pumps out 10 million phones a year, at a rate of one per second.
In another example, robots are already making robots.
Underneath all this is something even more scary.
In the coming decades, governments will pivot away from the messy, resource-hungry human militaries.
After all ..
War and conflict become easier to sell to the public when it’s robots and drones doing the fighting.
China, with its manufacturing backbone and authoritarian history, is likely already spearheading this revolution,
Hence why President Biden was quick to unleash semiconductor sanctions on China, before ChatGPT was launched and AI even became an acronym.
Even in 2022 President Biden was a corpse so we know it wasn’t him pulling these strings.
The United States military knows this is what’s coming.
In a world where military and economic dominance is based on how many robots your country can build - America is probably not even in the top 5.
That’s priced into stocks about as much as DeepSeek was.
In other words …
Not at all.
I believe we’re heading into an era where the best investors will be the ones that accept that the world is changing.
AI, technology, and robotics are both terrifying and exciting at the same time.
The opportunities cross over all industry - not just technology and semiconductors.
In fact, China’s master plan is to diminish the intellectual value of semiconductor technology and software.
That’s what DeepSeek was.
Sanctions from the US government make it a requirement for China to replicate what Nvidia, Intel, AMD and others have done.
Just focusing your portfolio on that sector will be a recipe for disaster.
Most of the index funds are concentrated around stocks that are ripe to underperform in this new world too.
Investors who aren’t focused on this new reality will struggle.
Those that embrace it will make money effortlessly.
The choice will be yours.
I’ll release my portfolio of picks at a later time. Until then,
Good luck with your investments.
Colin
Hi Colin can’t wait to see your portfolio I have followed you since you were with Brownstone Research I wish you still be there great stocks pick for the time that you stayed there
Waiting for the portfolio!