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Niki 🎩🔮
@niki-finance
Thread 🧵 This is the simplest diagram I could do to explain what is happening in the world and why China has already won.
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Niki 🎩🔮
@niki-finance
To add to this and to explain why this era's 'economic commanding heights ' manufacturing is different - it's software enabled. For example an EV, smartphone, drone and obviously a robot, rely on software. But if you make the software free, as BYD has with its self drive software, then you can sell more hardware. This means that you have added network effects to hardware (Nvidia does this with CUDA, Apple do this to phones with IOS - but they don't own the whole manufacturing). The issue for the US (and Europe) is that China does own all the hardware manufacturing for its network effect enabled hardware and it owns the supply chain too, and with a population of 1.4 billion, it has stronger network effects than the US.
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Niki 🎩🔮
@niki-finance
There have been two eras of digital era distribution: PC era and smartphone era, but there have been three eras of internet business model: 1. Online only (social networks), 2. Online meets the real world (Uber, Airbnb etc.) 3. Online meets hardware and manufacturing. The third era is exacerbated by the fact that AI has production rather than distribution network effects (software is cheaper to build not just cheaper to acquire users) so it can be used for manufactured goods which have smarts embedded. Europe fell behind with software so companies like German car manufacturers can't compete with EVs. Meanwhile the US not only has less network effects than China, it has less control of supply chains (e.g. batteries and components) so still relies on China for manufacturing or components so Tesla can't compete with BYD. China wins this third era of digitisation where it meets all physical goods.
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