China’s $400 Billion Investment in Robotics Accelerates Autonomous Belt and Road Initiative

Executive Summary

This week on Autonomy Signals, Grayson Brulte and Rob Grant discuss China’s aggressive strategy to dominate the global autonomy economy. China is preparing to inject $400 billion into robotics in 2026, encouraging shared manufacturing processes between electric vehicles and humanoid robots to drastically lower fixed costs. Shut out of the U.S. market, Chinese autonomous vehicle companies are bypassing restrictions by rapidly expanding into Europe, the Middle East, and Southeast Asia to become the default underlying technology for global mass transit.

Key Autonomy Signals Episode Questions Answered

Autonomy Signals Topics & Timestamps

[00:00] AUTNMY AI

Welcome to the debut of Autonomy Signals, a new show co-hosted by Grayson Brute and Rob Grant. The hosts set the stage for a weekly format designed to cut through the industry noise and deliver the most important signals in the autonomy economy.

[00:40] Signal 1: China’s Planned $400 Billion Investment in Robotics

AUTNMY AI’s OMEGA algorithm uncovered that China is preparing to invest $400 billion into robotics in 2026 by sharing manufacturing lines and supply chains between electric vehicles and humanoid robots. This aggressive strategy creates massive economies of scale that could permanently leave the domestic U.S. robotics industry behind, prompting U.S. lawmakers to introduce legislation attempting to ban the government use of these foreign systems.

[21:11] Signal 2: Surging Chinese Automotive Exports & Growing Global Robotaxi Expansions

Driven by an intense domestic price war, Chinese automakers exported a record 7.1 million vehicles recently, with nearly half featuring highly advanced automated driving systems. To sidestep geopolitical friction and U.S. bans, these Chinese autonomous vehicle firms are aggressively expanding into Europe, the Middle East, and Southeast Asia by embedding their technology into established Western ride-hail networks Uber and Lyft.

[40:06] Signal 3: Increasing Compute Costs

Due to soaring demand and global supply shortages, AMD and Intel are reportedly looking to increase the price of their compute chips by 15% this year. Furthermore, AUTNMY AI’s OMEGA assesses that the primary constraints holding back the autonomy economy are no longer software capabilities, but rather physical components like advanced semiconductor packaging, magnets, and high-torque actuators.

[44:01] Closing

Grayson and Rob conclude by highlighting the incredible value of the proprietary intelligence and market signals generated by AUTNMY AI’s OMEGA algorithm. Viewers who are interested in learning more about accessing this platform and its data are encouraged to send an email to alpha [at] autnmy.ai.

Full Episode Transcript

AUTNMY AI: Right now somewhere a company is making a move in plain sight. The street reads the headline autonomy. AI sees the signal, we deliver it before the market catches up. Autonomy, ai, your models, our intelligence. Request a private strategic briefing@autnny.ai.

Grayson Brulte: Rob, great episode last week with autonomy signals. We got some really great feedback and this week, OMEGA, a proprietary AI algorithm that you and I created. It uncovered even more singles. This autonomy economy is really starting to emerge. This week, OMEGA uncovered that China is preparing to spend 400 billion on robotics in 2026. Their exports of automobiles are surging despite the global headlines while they’re surging. Their robotaxi expansion continues on and OMEGA uncovered that there is compute costs coming on the horizon. Costs are going to increase, but let’s start with China to spend 400 billion. That’s B with the billion in this year on robotics. What do you make of the news coming outta China?

Rob Grant: It’s amazing how much impetus that the Chinese government has put on succeeding in the field of humanoids right now. Uh, one of the latest things that they’re pushing and you’re seeing out of China is, uh, EV manufacturers, uh, sharing the cost, sharing lines, sharing supply chains with humanoid robotic manufacturers. Uh, I think we saw out of, uh, a few reports that OMEGA was able to uncover that Xpeng has been able to reduce their labor cost by 35% by sharing intelligence, sharing supply chains, sharing, uh, manufacturing processes and sharing manufacturing lines, uh, to build the humanoids that then help build the vehicles, um, which is tremendous. Uh, so, um, I make of it that China is intent on winning this race. Uh, and what that means is they wanna put out as many cheaply made high performing humanoids, uh, out into various uses, mostly for industrial uses to help, uh, reduce their own cost of labor to help increase their efficiencies, but also to, uh, flood the markets that are available to Chinese technology, which include the Middle East and Southeast Asian markets. And so, um, with this reduction in cost, these economies of scale that they’re producing, uh, Xpeng is also producing, or building as we understand it, a 110,000 square foot facility that will be dual purpose for this manufacturing process. Um, we’re seeing China really, really put its money and its effort behind succeeding, uh, and making China the premier place for intelligence that powers humanoids and the physical, uh, infrastructure behind building humanoids.

Grayson Brulte: You’re seeing it with the Kimi models, the DeepSeek model, the Alibaba Quinn model, that they’re open sourcing, that their intelligence from a digital perspective, it’s getting very strong and we all know that China’s currently the leader in physical ai, look at Unitree robots that are shipped all over the world. And to give you some more context, Xpeng wants to produce a thousand humanoids a month by the end of the year. So that’s large numbers. The conversion of the factories sounds very familiar. It’s like, oh, are you listening to Mr. Musk do the Fremont conversion? Okay, we’re gonna shut down the S. We’re gonna shut down the X and we’re gonna make humanoids. It seems that China’s deploying the Tesla playbook. Am I reading the Tea Leafs right here?

Rob Grant: I had the same thought when I uncovered, uh, the report that that OMEGA produced for us. And, and it led me to believe two things. Uh, one will US domestic manufacturers, other manufacturers, other uh, automotive producers and suppliers look to, uh, continue to investigate how to have the same type of model that Tesla is doing and what China is picking up on. So that’s a signal right there. Like, Hey, let’s investigate, uh, and keep an eye on some of these, uh, uh, folks like Stellantis and, um, GM and Ford to see, you know, as they’re trying to figure out what to do with some of their factories that were intent on making EVs not so long ago. Can they be used for another purpose right now? Um, and the interesting thing is, will there be tie up as, as we talked about last week, with, you know, rare earth magnets being more difficult to obtain from China and some of the structural, um, impediments, uh, to relying on a Chinese supply chain. All of this stuff starts to get more localized in the United States. Will we see more tie up of this in the future? Uh, because the economics of scale right now are in favor of it, and we’re seeing this in real time out of China.

Grayson Brulte: We are seeing in, in a real time outta China, and it’s not just Xpeng that’s doing this. It’s also Xiaomi and Chery, which I never heard of until we did the research in OMEGA, a Chinese auto manufacturer. They’re doing humanoid robots to compliment on the factory lines. It just seems that, I’ll use the term national pride. It seems like there’s a lot of national pride in China to say, yes, we want to build and export electric vehicles. We want to build and export autonomous vehicles. And oh, by the way, yes, we wanna build and export humanoids to the world.

Rob Grant: For sure, 100% right, and you’re seeing it. All of these things suggest that China is intent on lowering their unit economics, uh, increasing their physical AI model training by having more of these human waves and other things out there. And then applying the learnings across many different sectors. Right? Uh, which suggests that, um, they’re likely to get to commercial maturity faster than just the US um, domestic manufacturers of humanoids or, or other, um, products. And they’re also, uh, creating a structural margin deficit for the Western OEMs that are in these fields. And so, if you can get your product out there, um, and you can get it out there faster and cheaper, there’s gonna be more adoption. And we’re seeing this already in, in what we’ll get to later on in this conversation, which is adoption of autonomous vehicles, um, in these non-Western aligned markets, Southeast Asia and the Gulf States in particular, what you’re starting to see is Chinese dominance, um, with this technology. Um, and it’s not only coming in the form of AVs, it’s now focused on humanoids. Um, and then it’s also gonna be focused on the large language models. And what they’re trying to do is establish the global standards outside of the Western hemisphere on hardware, on software, on all of the different, um, legs that go into producing an autonomous product.

Grayson Brulte: Right. And the bottom line here is that China has grand ambitions. I don’t know any other way to describe it as grand ambitions and part of the OMEGA and the reports that it does risk factors for us. I wanna go through some of these risk factors that it generated for us. It said that China’s massive state subsidy injection and domestic deployment scale, installing nearly 300,000 industrial robots annually compared to the United States of 30,000, creates an insurmountable data and hardware iteration loop. This asymmetry threatens to leave the US domestic robotics industry permanently behind in unit economics and physical AI model training. That’s a very interesting risk that OMEGA uncovered there.

Rob Grant: It is and, and it is hard to overcome those things as a US domestic manufacturer right now, both because of some structural things that we’ve talked about a few times, uh, last week and already on the, uh, podcast today, but also, uh, because of the government support, right? We are, you know, a little bit messy here in the United States when it comes to government focus and government priority of these technologies. Um, we certainly lead the world in, um, venture capital funding and capital funding for these technologies, right? Which is a huge advantage for us globally. But in terms of the government prioritization of these efforts, um, it’s a little bit messier here in the United States, and we’re seeing a little bit of that play out in the United States Congress this week, um, where a new bill was introduced by Senator Cotton, uh, from Arkansas. And Senator Schumer, the, um, minority leader of the Senate out of New York. Um, so a Democrat and a Republican, um, that puts a prioritization and a prohibition on US executive agencies, meaning Department of Justice, Department of Homeland Security, Department of Defense from purchasing, um, uh, unmanned ground vehicles and other autonomous systems, uh, that are either produced from what they call a, um, a covered foreign entity, which are basically four countries: China, Korea, Iran, and Russia. Um, and it’s also, uh, banned them from operating it. So even if they didn’t directly use federal funds to purchase it, if they come into possession of it, they say they can’t operate it. Now there are some, uh, provisions that allow some exceptions to that. But overall, what you’re seeing is a, I think a signal that there is a fear from the United States government that China is advancing in the field of unmanned systems, whether that be, uh, ground vehicles, humanoids, autonomous vehicles faster than the United States, and perhaps better. Now, I don’t think the language is meant to directly say that we’re behind because I believe that both of these senators are very much behind US innovation generally, even though specifically, uh, we can get into it at a different time, they may have had issues with certain technologies. Um, but I think what that reads to me is that there is a fear that China is advancing faster in these areas in the United States. And uh, that is I think, something that we’re seeing this signal suggest to in terms of its commercial advancement. Um, but the US at first, their first policy response is to say, well, let’s not use this technology in our military and official government capacities because we feel there’s a danger in using Chinese technology in that way. I will caveat all this, that is just a signal, as we all know, uh, or as many of us might know, the United States Senate introduces thousands of bills a year. The Congress introduces thousands of bills and the likelihood of any particular bill becoming law is less than 1%. And I’ll just give you the numbers I looked up this morning. Uh, as many folks might know, who know me, I spent 15 years in the United States Senate. Um, there were 14,600 bills introduced in this 119th Congress to date. So the 119th Congress began in January of 2025. It ends in December of 2026, so 14,000 plus bills total, a total of 81 bills have become law. Of that 81, 24 of them are resolutions that really only apply to the house and Senate itself. These are things that when, um, President Trump was elected, the Republican, uh, dominated house and Senate said, Hey, let’s do what they call a Congressional Review Act of certain actions that took place, executive actions that took place under Biden. So 24 are of those nature. So we’re talking 57 bills. So the likelihood that this bill goes anywhere is less than zero. Literally it’s like 0.3% chance. But I think it does signal that some of our leaders are very concerned about where, uh, investments that OMEGA uncovered, um, the dual purpose manufacturing crossover between EVs and humanoids in China is becoming a serious, uh, concern for the United States government.

Grayson Brulte: It’s becoming a concern. Senator Cotton is a well-known China Hawk. If you read Senator Cotton’s public statements on the bill introduction, he talks about using certain robotics, the unmanned robotics as a backdoor to spying. We did have a bill previously around DJI drones, which were effectively banned from, uh, Department of War. The likelihood, as you said, is next to zero for all essential purposes of actually getting the bill through, but to me, the signal that OMEGA surfaced for us, that Congress is paying attention, you have the minority leader in Senator Schumer, then you have a Republican in Senator Cotton that are coming together, and as we know from previous legislation, the China issue can be bipartisan depending on the angle there. That’s the policy angle and you were spot on that. But then here’s the manufacturing angle that OMEGA surfaced as a risk that I want to get into with you. It says that Chinese EV makers are sharing manufacturing equipment, processes, and supply chains between intelligent vehicles and humanoid robots. This shared infrastructure drastically lowers fixed costs and accelerates commercial maturity faster than standalone US robotics firms can manage creating a structural deficit for Western OEMs. The signal from OMEGA is right, and when I say the signal is right, let’s remove Tesla from that ’cause they’re very publicly building humanoids. And let’s also remove Hyundai from that. They had the plant in Savannah, Georgia, where they’re very publicly deploying the Boston Dynamics. With those two OEMs, one’s a more traditional South Korean OEM, and one is an American innovation robotics company. I don’t view them as an automobile company. You have experience here. When does GM, Ford and even Stellantis say, okay, we need humanoids if this OMEGA signal does hold true?

Rob Grant: Look, I think, right, um, they’re gonna have to start investigating it relatively soon. I think automation has been a part of the US domestic manufacturing process, right? Let’s not hide the fact that if you walked into a Ford plant or a GM plant today, you’d see a lot of automation, um, on that plant floor. I think what we’re talking about is additional facets of the process being automated as well as adding another use for that line. So, um, not just building a vehicle through automation, but building additional, um, humanoids and other industrial automation, um, robots that can then be used to help further automate the plant. Um, I think given what we’ve seen in terms of their pullback and EV manufacturing, what we saw today, there was a report in the Wall Street Journal about Magna and one of its big factories laying kind of fallow for the last couple of months as that EV pullback, um, occurred. We’ve got some open plants, um, that has state-of-the-art manufacturing in it. Now, it is a long process, you know, 18, 24 months to perhaps repurpose them to do both things at the same time. But I think there’s an opportunity here, particularly as, um, we look to, uh, as the United States, and if you’re an OEM or you’re anybody in this automotive automation space to look to cut costs, uh, to, um, reduce your risk on supply chains and things. A lot of things are going to be localized going forward. So I would say they would at least explore an opportunity here. Right? There’s plenty of hardware manufacturers on the humanoid side that I think can produce some pretty interesting numbers on their own, but if they really want to produce at scale, there’s a potential—a potential, I say for perhaps, uh, aligning, uh, the use of these kind of fallow but modern factories that are out there. Um, and now I have no inside information, but you look at somebody like a Rivian, right? Where you look at somebody like, uh, a GM, um, and then you see some of the folks out there, like a Figure or others. Is there a way for those two to join forces to get these economies of scale, to reduce these costs, to share intelligence amongst the humanoids and the EV manufacturing process to share costs along supply chain, uh, considerations? I think it’s an interesting signal that OMEGA’s putting out there. We’ll have to continue to watch it and look for additional signals. But we’ll see.

Grayson Brulte: It’s a very interesting signal to watch with Figure AI. They were deployed at the Spartanburg BMW plant. They put out a public post, I don’t recall which factory, but they’re going to another factory. We’re seeing reports out of Germany where German automotive companies are looking at deploying humanoids. So we’re starting to see that market emerge, and when I say that the signals there, when I put on the capital hat we look at all the write downs that big auto—let’s say the German auto and US auto—had to take write downs on EVs. Are they gun shy? Because I could sit here and make a very intellectual argument for you, and you and I have talked about this offline many times where instead of going all in on EV, they should have went all in on AV and they’d be a different company. So there’s a lot of signals to watch, especially around how these large auto manufacturer companies are being managed. What are they doing for buybacks? What are they doing for dividends and where most importantly, where are they investing and where are they doing partnerships? Which brings us to OMEGA’s take. OMEGA’s got a great take on this here. OMEGA assesses that China’s $400 billion subsidy package in EV robotics convergence ensures China’s humanoid platforms will achieve commercial viability and scale 24 to 36 months ahead of US counterparts. Global commercial markets will be flooded with heavily subsidized, highly capable Chinese units. Conviction is high that standalone US robotics hardware startups lacking automotive manufacturing synergies will face a mass extinction event by 2028, partially due to BOM costs—the bill of materials cost. If, as we talked about last week, OMEGA’s picking up on early signals in the supply chain, that could happen if OMEGA’s take is right. This is hypothetical. Could we potentially see a global OEM acquire a humanoid company? Very similar to how we saw Hyundai acquire Boston Dynamics. I think it was from Alphabet. They actually acquired it from…

Rob Grant: That’s right. Yeah. I, I mean, I think that is something, um, OMEGA might be dead on a couple years out. Uh, from now we might see a lot more of this. It makes, like you said, it makes intellectual sense to some degree. Um, but it is a very difficult commitment to make if you’re sitting in the chair of a CEO of an OEM. Right. And there’s been so much volatility in the last few years in terms of your investments in EVs and AVs. Um, that’s both in terms of the structural things that we’ve talked about, whether it’s supply chain, whether it’s geopolitics, whether it’s tariffs, um, you know, it makes it very difficult to go all in. But if you’re bold enough, I think we’ll see a few of these folks, uh, at least investigate what’s going on there. Um, or we might have some smaller things. We saw a lot of this with the early battery technology, right? Where you had OEMs and others, um, announce a series of kind of smaller joint ventures together just to see and explore what could be possible. Um, and I think we’re gonna see more of that. I think OMEGA’s right.

Grayson Brulte: I think it’s fair to say, and I think a majority of our audience would agree with this statement: Being the CEO of a global auto manufacturer is a very tough job right now. I don’t think there’s any other way to say it. And so we need to look for public statements from the CEOs on their earnings calls to try and uncover some of the clues there. Or if perhaps we see a global OEM do an automation and autonomy day, and perhaps they showcase something that is a sign to look for. Which brings us to signal number two. We’re staying in China, but we’re going from humanoids to vehicles here. This was fascinating that OMEGA uncovered Chinese automakers exported a record 7.1 million cars in 2025 with nearly 50% having highly advanced versions of ADAS. For the audience that doesn’t know what ADAS is, that’s advanced automated driving systems. But here’s the kicker on this: Vehicle exports are surging 48% year over year between January and February alone this year. 1.35 million units were shipped out of China globally. China’s automobile industry is accelerating their exports.

Rob Grant: Yeah, I think part of that is by necessity, right? Um, there is an intense price war going on in China, um, between BYD, Geely, Xpeng, Nio, uh, Chery and others. Um, so the margins that they’re seeing out of places like Europe and Brazil are starting to become even more attractive. Uh, even though some of these places, you know, are a little bit, their vehicles are a little bit more expensive than they are in China for various reasons. Um, the margins are coming in, um, and the signal that they’re telling the Chinese manufacturers is there is more to be had in these, uh, outside regions. Um, and given their manufacturing capacity, um, they can turn this on and start to sell these units. And look, you and I have heard anecdotally, um, we’ve seen it in person. Um, some of these vehicles are highly impressive and they come even with a tariff or a tax on it are still cost competitive versus, uh, some of the domestic vehicles that are available in these markets or even versus some of the other foreign manufacturers selling into these markets. And so it’s, uh, I think we’re going to continue to see—we just talked about with humanoids, right? There are certain non-Western aligned markets that are really ripe for cheap, highly advanced goods from China. Uh, and the Chinese are starting to see the signals that this is a place to earn good money. Um, and so these exports, I think they’re only going to, um, be increasing over time, uh, as those margins continue to improve, especially if this internal competitive war for China, uh, in terms of their price war, uh, moves forward.

Grayson Brulte: If the quality of the vehicles… Jim Farley last year did an interview with the Wall Street Journal about the Xiaomi car, and he didn’t want to give it back. Mr. Farley’s telling the Wall Street Journal, “I’m the CEO of Ford. No, I don’t want to give back my Chinese made Xiaomi car there.” And if you see other reports from other analysts that you and I read and the general reviews of the Chinese vehicles are, they’re manufactured very well. When I say that they do have issues as we saw with BYD’s God’s Eye and the issues that they’ve had, but overall from a manufacturing standpoint, the reviews are generally very positive. Geely, for example, they want to export 640,000 vehicles this year following a 240% surge in electric vehicle exports last year. Says, okay, the price, we’re having a price war at home margin constraint. Oh, by the way, let’s go ship to Europe. Let’s go to Australia, let’s go to South America that’s only accelerating. So that’s on the passenger, the traditional automotive side. And then you have the robotaxis that are starting to get exported and accelerating. And as you and I have talked about many times, Europe is becoming the home of Chinese autonomy. Do we continue to see that expand or what signals did OMEGA uncover there?

Rob Grant: Yeah, I mean, look, uh. WeRide, Pony, Baidu. Every time I see an announcement that’s, uh, outside of the United States, it involves one of these companies. Uh, I mean, Waymo has a few things going on internationally, but, um, what we’re increasingly seeing is, um, the Uber, Lyfts, and Grab—the consumer network, so to speak. Um, the Chinese folks are partnering with these already established regulatorily approved, um, consumer networks, and they’re becoming the technical layer behind the distribution layer. And so, you know, we’ve seen it with what Baidu and Lyft announced last week that we talked about, where we see Uber and um, uh, Pony and WeRide and what they’re doing over in, uh, the UAE. And now we saw just the other day, Baidu and Grab announcing things in Singapore. And you know what this tells me is that slowly but surely, the Chinese are embedding their technical, uh, achievements into various layers of these, uh, European and Eastern Hemisphere transit systems and, um. As that happens, as people get more accustomed to the advancements and the achievements and the benefits that come with this technology, the more embedded that the Chinese become as the leader and those that, um, the European networks look to. European regulators will look to, uh, say, “Well, if we’re gonna discuss regulations in this area, we should be talking with the Chinese. We shouldn’t be talking with the Americans.” Uh, and so that gives, I think the Chinese, uh, you know, uh, folks in this space, a leg up in terms of what are going to be the global standards for the hardware and the software. Um, and I think that’s not an unintentional result here. I think this is a very intentional way for Chinese technology to enter these markets in a less friction-filled way than some of the American technology companies are doing.

Grayson Brulte: I’m gonna put my hat on, and not to toot my own horn, but on The Road to Autonomy Podcast about roughly a year ago, I coined the term “Autonomous Belt and Road Initiative” where I bring that up today because if you look at the Historical Belt and Road Initiative, China invested heavily in the Congo. And why do they invest heavily in the Congo? They wanted access to critical minerals, especially cobalt. If you read Henry Sanderson’s wonderful book, by the way, Volt Rush, he talks about seeing more Chinese restaurants in the Congo than Congolese restaurants, and how that was a sign and the security guards guarding facilities were Chinese. So obviously, why do they do that? Because they control 90 plus percent of the rare earth, and that helped accelerate China’s push into electric vehicles. Now I believe that they are taking the similar strategy from Belt and Road and making it autonomous. And I say that because OMEGA is uncovering some really interesting signals in Europe as it relates to autonomy in China. They’re not just exporting electric vehicles. They’re not just exporting autonomous vehicles/robotaxis. They’re investing in building plants. They’re doing partnerships. They’re planting a flag. They’re investing in the local community. They’re investing in countries throughout Europe. To me, there’s a lot of similarities here for the signals that OMEGA’s uncovering to what we historically know with the Belt and Road Initiative.

Rob Grant: Agreed and, and what’s really interesting right, is one of the reasons to, um, kind of put your assets locally is to reduce, uh, this friction of entering markets and saying, “Hey, I’m gonna bring my technology here, or I’m gonna bring my hardware here, but I’m gonna build it somewhere else. I’m gonna refine it somewhere else. I’m gonna perfect it somewhere else.” And I think what we’re seeing, um, more frequently than, uh, perhaps in the last 20 years where we were focused or 30 years focused on kind of this, uh, globalization is this kind of retreat into a little bit more of localization, regionalization. So if you’re able to come in and say, “Hey, not only, yes, I might be a Chinese manufacturer and I might have, uh, Chinese AV tech on it, but look, I build this vehicle in the region here. I have a plant, whether it’s in Brazil or Germany or somewhere else, Croatia, I, uh, store all the data here locally, right? Um, yes, I do kind of have a training model that I use, but I train it with data that’s just from this area. You have access to it. We’re not sharing it.” Now, people who are critical of the Chinese will say, “Well, they’ll say all that, but that may not be true.” We’re not getting into that here, but by being able to say, “Hey, I am in your region. I’m invested in your region. I’m willing to kind of, um, adhere to some more localization requirements.” This moves the entryway in, uh, for this technology. And then once it’s embedded… It’s that old, uh, line that comes to me, right? If I owe the bank $5,000, right? That’s my problem. But if I owe the bank $500 million, that’s the bank’s problem. And so if China is able to get in kind of in this manner, slowly but surely, and then build up sort of the industrial base there, build up the technical base there, build up the data layer base there… um. Europe has nowhere else to go, right? They’ve kind of just taken over the tent and Western manufacturers and Western technology, um, has to be able to respond to this more quickly than it is, um, if they want to compete in these markets in the long term. I mean, you just look at the Middle East and you look at what’s going on in the Southeast Asia and the Chinese presence is overwhelming compared to what the US is doing right now.

Grayson Brulte: Yes, and you could even make the analogy that they’re using the global ride hailing networks as Trojan horses to enter that market because it’s not their branding on the app. It is something that the individuals are familiar with in those markets. So it could be perhaps a Trojan horse strategy. But if you look at it from a local politician perspective, or let’s go down to the city council level or the municipality level. If you’re a Chinese controlled entity and you are investing X millions of dollars in the community creating XX number of jobs, you and I know that’s very hard to rip that out of the community. Once that money starts flowing, it says, okay. Now they’ve got a policy edge. Am I reading that right? They’re investing in the community. They get a policy edge as well.

Rob Grant: I think so. Right. Um, and you know, you’re starting to see, you know, um, the US folks understand this a little bit more directly, right? I think the manufacturers, the traditional OEMs knew this a long time ago, right? They used to have plants in Italy and used to have plants in, uh, France and other places like that. Um, but the economics of that business, uh, have kind of forced them into more regional markets. But, you know, if you have the ability and fundraising and the state support, uh, to go in and invest and bring jobs and build things and build out, uh, programs and things like that, of course, the people that are there who benefit from them are gonna give you a more willing ear than they are folks that aren’t doing those things.

Grayson Brulte: And then “builds” the key word. ‘Cause if you look going back to mainland China, you’re building Chinese influence, which the mainland—this is my assumption—will fully support. OMEGA’s got some really great takes on this and it’s truly amazing that what you and I built with OMEGA and proprietary research, what she’s able to uncover. And I want to go through some of the takes that OMEGA has on this. This is to start with the first one. The immediate economic implication is a structural shift in how autonomous vehicles are deployed globally. Shut out of the US market by national security bans, Chinese AV leaders, Baidu, Pony AI, and WeRide are executing a highly targeted expansion, strategically focused on the Middle East, Europe and Southeast Asia by acting as the underlying technology enablers for Western Ride hail giants like Uber and Lyft. These Chinese firms bypass the massive customer acquisition cost and local operational friction that typically stall international robotaxi expansions. You said it earlier. You’re right. OMEGA’s spot on on this one.

Rob Grant: Agreed. And I think what’ll be interesting to see is if the pace of these, uh, expansions increases both in terms of the number of them, but also what does it mean on the ground. And that’s something that, you know, you’ve been, uh, great at throughout the history of The Road to Autonomy, which is really understanding what is real, what is not. Um, and look, I’m not saying all of these announcements are going to come to fruition and, um, be real. But what we are seeing is the signal that there is a more real willingness, uh, and perhaps, uh, financial capability and government backing to try these expansions. And so we’ll continue to put feet to the fire and unpack, you know, how are these things working? You know, we’ve got announcements of 2,000, um, WeRides being deployed, uh, with Geely coming up soon in a European, um, market. We’ll see. I mean, I think we will put the same kind of scrutiny on if that is actually real or not. Will they have drivers in them? Will it be driver out? Where are their depots gonna be? Where are they gonna get the electricity? All that kind of stuff. Um, but I think what we’re seeing is a more aggressive, uh, approach to international expansion coming out of China right now.

Grayson Brulte: Yeah, and as you and I grow The Road to Autonomy together, we’re gonna continue to do more field reports and actually go in the field and report on that and combine our field intelligence with our OMEGA intelligence, which brings us to a really interesting one that is highly debated ’cause this is a really good take from OMEGA as well. This dynamic fundamentally alters the global competitive landscape by bifurcating the autonomy market. While North America remains a walled garden, Chinese software is rapidly becoming the default operating system for next-generation transit in the Eastern Hemisphere and Europe. Furthermore, with China controlling roughly 90% of the global automotive lidar market, and leveraging massive cost advantages, Western OEMs face a severe potential margin deficit. Chinese auto manufacturers such as BYD, Xpeng and Nio are aggressively exporting consumer EVs, which we spoke about, pre-installed with level two plus ADAS, turning smart driving tech into a primary global differentiator. OMEGA’s right, because this is hypothetical again, over time, with software updates, those systems become level four, then all of a sudden a large swath of vehicles in Europe or personally owned autonomous vehicles are made in China, and it’s like, okay, here we go back to autonomous belt and road check.

Rob Grant: 100%. And we’ve seen this playbook before, right? I mean, we can look at, uh, Huawei and its, uh, communication systems and it’s embedded throughout Europe, right? Um, and so I think this is a tried and true approach from the Chinese. Um, it’s intentional. Uh, I’m not saying there’s anything nefarious about that, right? Don’t read me wrong. I think for folks that are looking at, you know, how do I evaluate, um, placing my capital, whether it’s venture capital or other capital, right? Equities and things like that into, uh, autonomous systems and the, um, infrastructure and other plays that are around autonomous systems, it is important to know, um, kind of where folks are targeted at, where are they perhaps gonna get a more receptive target, um, and what that might mean for further investment there. And I think what we’re seeing is the signal that China is going all in on external exports of EVs, but also, uh, going all in on international expansion in these markets, uh, such as the Middle East and Southeast Asia. To start to really, uh, lay the infrastructure for domination of those markets in terms of hardware and software.

Grayson Brulte: If you look at China’s, basically for all practical purposes, trying to become the defacto standard for deploying autonomy globally, which brings us to our final signal here. Regulatory, you’re in your wheelhouse ’cause OMEGA’s got a really good take on the regulatory environment of this year. The regulatory angle most investors miss is the strategic use of multi-point penetration to sidestep geopolitical friction. While the European Union tightens data privacy laws via the GDPR and the Cyber Resilient Act, Chinese AV firms are embedding their technology directly into European mass transit operators and European automakers. Simultaneously, they’re utilizing the Middle East with pristine infrastructure, sunny weather, and deep-pocketed sovereign wealth funds as a receptive launchpad to prove commercial viability and achieve scale velocity before Western regulators came out with a unified response. We’ve seen that momentum with Mercedes. We’ve seen VW invest in Horizon Robotics. We’re seeing the WeRide deals throughout Europe mass transit, while OMEGA is picking up on signals that we’re not seeing covered anywhere else.

Rob Grant: Agreed. And I think, you know, if you want to understand, uh, you know where your returns are gonna come from in the autonomous, uh, autonomy economy, you gotta listen to us. That’s all I have to say.

Grayson Brulte: I like that. See, listen to us and reach out. If you wanna learn more about OMEGA, it’s alpha [at] autnny.ai, we can walk you through the platform and how we uncover all this intelligence, which brings us to signal number three, and this is going to be an interesting signal for interesting times. I’m not gonna give you the tale of two cities: It was the best of times. It was the worst of times. I’ll give you, it was the most interesting of times. Signal three is we are potentially seeing an increased compute cost. There are several reports that came out this week that AMD and Intel are looking to increase the price of compute chips by 15% this year. That’s a pretty significant jump. Oh, and by the way, there’s a global shortage on these chips just based on the demand.

Rob Grant: Yeah, I mean, look, I, I believe this is, um, perhaps the beginning of a compute cost inflation cycle. Um, I think it is well known. We’ve heard other folks, uh, speak about it, uh, in various, uh, platforms. We’ve got a crunch coming, right? So demand is outstripping supply here, uh, in all sorts of respects. Uh, right. We’ve got longer wait times for chips. We’ve got higher compute costs. Um, and I think raising prices is one way to hopefully throttle this demand a bit. Now, I don’t think folks want to turn anybody away. That’s not what I’m saying. But, um, given what you’re seeing from the demand side of this, um, it only makes sense, uh, given the cost of adding more capacity, adding more ability to build chips, to process them, to package them, um, to increase your costs, uh, to cover future build outs and things of that nature. And so my sense is that these costs, once they go up, they’re unlikely to come down for a bit. I don’t believe this is a temporary increase. I believe this is, um, where the cost is, this is the new floor. The question is, how long do other folks take to raise their costs as well?

Grayson Brulte: Do other companies follow? And you see the reports out of China with their overtures towards Taiwan. That is a major risk ’cause 85% of these advanced chips for AI and GPUs come out of Taiwan. We see what’s happening in the Strait of Hormuz right now. You’ve got the Strait of Taiwan’s like, oh boy, you look at the oil markets, oh, that 15% of that does happen… That’s gonna be a lot more than 15%. That’s another risk that we have to watch, as this market evolves and these price increases go through.

Rob Grant: Yeah, and, and I think, you know, what you will also, uh, see kind of goes back to what we just talked about with our first signal, which is where else are these costs gonna go up? And, you know, as a manufacturer, you’re seeing your overall cost exceed kind of planned expenditures for, um, the year. Where can you kind of claw back some additional expenses? Um, and what we talked about with our first signal is that what you’re seeing is a potential, uh, more efficient, less expensive ability, uh, on the manufacturing side if you combine certain supply chains and you combine certain processes and you combine certain intelligence, uh, as we saw with the EV and humanoid, uh, combination that’s coming outta China. So I think, you know when costs get high, uh, or particularly too expensive for folks, um, that forces a rethinking of where else you might be able to save money. And I think Signal one and Signal three, uh, play well together, um, as a chance for, um, manufacturers and others to look at, “how do I reduce other costs if this cost is going up?”

Grayson Brulte: And tying that all together. OMEGA’s take on this, which really does a great job of overlapping with last week is… She says the bottleneck has shifted to physical components. The primary constraints on the autonomy economy are no longer software or LLM capabilities. They are NdFeB magnets, high torque actuators, and advanced semiconductor packaging. That basically puts a bow on everything we just described here.

Rob Grant: Indeed, indeed said it more succinctly than I did.

Grayson Brulte: OMEGA was great this week. Uncovered signals in each and every week. You and I are going to be here uncovering the signals that we learned in OMEGA. And if you’re interested in learning about OMEGA, please send an email to alpha@autnny.ai. That’s alpha at a-u-t-n-n-y dot a-i. The future is bright. The future autonomous, the future is signals. Rob, another great episode, sir.

Rob Grant: I loved every minute of it. Appreciate whenever I get a chance to see you and have these discussions.