NH Investment & Securities: "Why We Have No Choice but to Invest Despite AI Controversies"
US-China AI Hegemony War... Rising Demand for Physical AI in Focus
NH Investment & Securities explained that the reason big tech companies must continue to invest in AI is due to these factors. In particular, the firm diagnosed that the flow of AI investment in the United States and China is defined as a core infrastructure that determines national competitiveness, making it difficult to halt.
Na Jeonghwan, a researcher at NH Investment & Securities, defined AI as "not merely the adoption of a new technology, but an essential infrastructure that accompanies the redesign of social and economic systems" in a report titled "Why We Have No Other Choice but to Invest in AI Despite the Controversy" released on this day. He continued, "When AI is introduced to companies, not only core work but also investments in data centers and the structure of IT and operations personnel are reorganized based on AI. Reverting to the original state from this point would require enormous costs," emphasizing that "AI investment, once started, is an irreversible investment that is difficult to retreat from."
He particularly stressed that since the United States and China are already engaged in a hegemonic competition over AI, policies and capital are inevitably moving toward maintaining or expanding AI investments rather than reducing them. Na explained, "The United States' 'One Big Beautiful Bill (OBBB)' is also designed to allow companies to expense qualified assets such as AI equipment, data centers, and semiconductors in the first year, thereby lowering the initial tax burden," adding, "AI investment has come to resemble a national strategic investment." He further stated, "As long as the OBBB bill is in effect, it is a rational choice to accelerate, rather than delay, AI capital expenditures (CAPEX)."
He also judged that current investments in generative AI and related fields could lead to productivity improvements after a certain time lag. Na explained, "The effects of introducing generative AI follow a J-curve structure. In the initial stage, which requires building AI capital and organizational restructuring, productivity improvements are not readily apparent. However, once a critical point is surpassed, the contribution to productivity rises rapidly, and the economy's potential growth trajectory is fixed at a higher level than before."
Na emphasized the need to pay attention to the increasing demand for physical AI. In the United States, physical AI investment is necessary to directly automate production processes in order to offset high labor costs and continue reshoring. He also explained that in China, automation is progressing rapidly across the manufacturing sector in response to rising labor cost pressures.
Regarding Korea, he mentioned that the country is competitive because it already possesses core robot components and manufacturing automation capabilities. In particular, Korea has accumulated component technologies that determine robot performance, such as actuators, motors, and controllers. A representative example is that actuators from Robotis have been adopted by global big tech companies and China's Unitree, leading to strong export performance. Na analyzed, "As global physical AI investment expands, the on-site robot and core component industries grow together," adding, "Korea is a country that possesses both elements simultaneously and is entering a phase of structural growth."
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