Key Takeaways
- The AI race is shifting from pure language‑model research to tangible, real‑world applications such as robotics and industrial automation.
- Asia’s deeply integrated manufacturing supply chain—spanning mainland China, Japan, South Korea, and Southeast Asia—provides a unique advantage for rapid iteration and large‑scale deployment of AI‑enabled hardware.
- Venture capital is increasingly flowing toward application‑layer companies that can produce concrete use cases and revenue, rather than businesses focused solely on foundation‑model development.
- According to Jixun Foo, senior managing partner at Granite Asia, the decisive factor in the next wave of AI will be the ability to transform entire industries and unlock value across the full ecosystem, not just model performance.
The Next Frontier of AI: From Software to Physical Systems
Artificial intelligence has, for the past two years, been dominated by breakthroughs in large language models (LLMs) that power chatbots, translation tools, and generative text applications. However, the landscape is now evolving. As Jixun Foo, senior managing partner at Granite Asia, explained in a recent interview with the South China Morning Post, “AI is not just about models or applications in software.” He emphasized that the current wave of AI development has entered a new phase in which physical applications—from robotics to industrial automation—are becoming increasingly important. This shift reflects a broader industry recognition that the true transformative power of AI will be realized when it can interact with and manipulate the material world.
Asia’s Manufacturing Edge Fuels Real‑World AI
Foo pointed out that Asia possesses a structural advantage that aligns perfectly with this emerging focus: a deeply integrated industrial base that stretches across mainland China, Japan, South Korea, and Southeast Asia. “Our advantage is in the supply chain, hardware and engineering capabilities,” he asserted. This integrated ecosystem enables companies to iterate quickly on AI‑enabled hardware, prototype at scale, and deploy solutions across factories, logistics networks, and production lines without the bottlenecks that often plague more fragmented regions. The ability to source components, assemble systems, and fine‑tune software locally gives Asian firms a speed-to-market edge that is difficult to replicate elsewhere.
From Language Models to Tangible Use Cases
The venture capitalist noted that the shift in technological emphasis is mirrored in capital allocation. Investors are moving away from pure model‑driven ventures and toward application‑layer companies that can demonstrate concrete use cases and generate revenue. “When we look at [opportunities in] AI, we don’t just look at models or applications in isolation – we look at the entire ecosystem,” Foo said. He added that the key question for evaluators is not merely how accurate a model is, but what industries it can transform and what kind of value it can unlock. This perspective encourages funding for startups that pair sophisticated AI algorithms with robust hardware, such as autonomous guided vehicles in warehouses, vision‑guided inspection systems on assembly lines, or predictive maintenance platforms for heavy machinery.
Supply Chain Synergy Accelerates Innovation
One of the most compelling aspects of Asia’s advantage lies in the tight coupling between design, manufacturing, and logistics. In regions where semiconductor fabs, PCB assembly plants, and robotics integrators are geographically concentrated, engineering teams can receive feedback from the production floor within hours rather than weeks. This rapid feedback loop is essential for refining AI models that must operate under real‑world constraints—such as varying lighting conditions on a factory floor or the dynamic payloads handled by collaborative robots. Foo highlighted that this environment allows for faster iteration and large‑scale deployment of AI‑enabled hardware, which could prove decisive as the AI race moves from theoretical benchmarks to operational performance.
Real‑World Impact: Industries Poised for Transformation
The practical implications of this shift are already visible across several sectors. In electronics manufacturing, AI‑driven vision systems are detecting microscopic defects that human inspectors miss, boosting yields and reducing waste. In automotive assembly, collaborative robots equipped with reinforcement‑learning algorithms adapt to variations in part positioning, increasing line flexibility. In logistics, AI‑optimized routing and autonomous forklifts are cutting delivery times and labor costs. Each of these examples illustrates Foo’s assertion that the value unlocked by AI extends beyond software metrics to measurable improvements in productivity, quality, and safety.
Challenges and the Road Ahead
Despite the clear advantages, Foo cautioned that realizing AI’s full potential in the physical world requires addressing several challenges. These include ensuring robust data pipelines from sensors to cloud analytics, developing standardized interfaces between AI modules and legacy machinery, and cultivating a workforce skilled in both AI software and hardware integration. Moreover, geopolitical tensions and trade restrictions could disrupt the finely tuned supply chains that currently give Asia its edge. Nevertheless, Foo remains optimistic, noting that the region’s engineering depth and supply‑chain resilience provide a strong foundation for overcoming such obstacles.
Conclusion: Asia’s Role in the Next AI Wave
The conversation with Jixun Foo underscores a pivotal moment in the evolution of artificial intelligence. As the focus migrates from abstract language models to tangible, hardware‑centric applications, Asia’s manufacturing prowess, integrated supply chains, and engineering expertise position it to lead the next phase of AI innovation. Venture capital is already aligning with this reality, favoring startups that can deliver real‑world value through AI‑enhanced robotics, automation, and industrial systems. For businesses, policymakers, and investors alike, the message is clear: the future of AI will be written not only in code but also on the factory floor, and Asia is poised to hold the pen.
https://www.scmp.com/business/markets/article/3350609/asias-supply-chain-strengths-could-give-it-edge-over-us-ai-race-granite-asias-foo