Asia’s supply chain strengths could give it edge over US in AI race: Granite Asia’s Foo

Venture capitalist Jixun Foo, Senior Managing Partner at Granite Asia, contends that Asia's industrial strengths position it to lead the next phase of the global AI competition. In an interview with the South China Morning Post, Foo argues that while the US has led in developing foundational language models like GPT-4 and Claude 3, the race is now shifting toward physical, embodied AI applications. This new phase, encompassing robotics, industrial automation, and AI-enabled hardware, plays directly to Asia's long-established advantages in manufacturing, supply chain integration, and engineering.

Foo points to the deeply integrated industrial ecosystem spanning mainland China, Japan, South Korea, and Southeast Asia as a decisive factor. This network allows for faster prototyping, iteration, and crucially, large-scale deployment of AI hardware systems. He suggests this tangible, production-focused advantage could outpace US software-centric innovation as AI moves into the real world. This shift is already influencing venture capital, with investors increasingly favoring application-layer companies that can generate tangible use cases and revenue from AI, rather than purely model-driven businesses.

The analysis signals a potential rebalancing in the global AI landscape. The initial wave, dominated by US firms like OpenAI and Anthropic, was defined by breakthroughs in large language models (LLMs). The emerging wave, focused on integrating AI into physical processes and machines, may see Asian companies and regions leverage their manufacturing prowess to capture significant value. Foo's perspective highlights that winning the AI race requires more than algorithmic excellence; it demands a robust industrial base capable of turning AI research into deployed, scalable solutions.