Dear Fellow CRE professionals. We tend to be resistant to change and new tech, but for the physical AI wave, please embrace it early.
I’ve spent a few weeks in Asia (Taipei, Hong Kong, Guangzhou). AI is seen more positively. The major shopping malls have at least one “AI store.” The mall at Canton Tower had like three.
One was geared towards kids: AI enabled tablets for kids kind of like LeapFrog; they had a chess and Go board game machine (really cool, where the robot plays chess with you - we beat the robot! I can see this being everywhere in 5 years).
The other was a luggage on wheels that turned into a scooter. That cost $400 US dollars. The store had the words robotics in the name which caught my eye.
The third store was actually a showcase store near the Tower. It was set up like an Apple Store. 3D printer in the corner. Robot pet dog that talks to you. A dancing robot that was center stage. News camera crew interviewing foreign tourist on their impression. And the chess robot that we paid 20 RMB ($3) to play against for 20 mins. We beat the robot, but playing it was very enjoyable.
I can see robots creeping into our lives. The Hilton hotel we were staying at had food delivery robots. They look similar to the robots you see at some sushi restaurants that deliver waters and utensils to tables. They go up elevators to the secure hotel guest floors to deliver take out (delivery guy just leaves in lobby). These robots don’t really wait for you to get out of the elevator. They barge rigtt by in. They are on a mission.
While we debate about LLMs and all that, we are missing the point that this tech is coming, especially obvious to me on the physical AI side.
And this is very exciting for CRE professionals because we understand location, space planning for humans and in the future robots, there are new industries coming.
I write this because in the West, we are villainizing AI and robots. My kids have a negative reaction to AI. Meanwhile in China, kids are being encouraged to use it. I think for our competitive sakes, we need to have more things like these stores and showcase pop-ups, to show use cases that the future is coming and some of it isn’t so scary.
I highly, highly recommend you look beyond LLMs for this wave and for our societies to better showcase positive use cases that will encourage use and early adoption for the sake of staying competitive with China. They are kicking our butt right now on that front. I also believe minds can change quite easily once they experience (same thing with online shopping, ride sharing, vacation rentals, autonomous vehicles). Keep an open mind.
And for those with career ambitions, the world of asset intensity is getting wider and wider to apply your real estate (asset intensity) skill sets and strategies to new, emerging fields. Now is a very exciting time if you can envision this future.
Yeah tablets for kids have zero negative associations or impacts on cognitive development. If the Chinese want to rot their kids’ brains and stunt their development, more power to them.
No one is villainizing robotics anyhow. Stop trying to associate the slop machine with actually productive technology.
Not going to reply to a troll
Sorry for being short with you. Hard to tell if you were trolling. I was just frustrated that my message about being open minded about physical AI is getting sucked into the endless criticisms that just suck all the air away from the big picture.
I don’t care one way or the other about tablets and kids. I care that Chinese kids are learning to work with these future tech more than kids in the West. I also don’t think the kids in China or Taiwan are studying or learning any less than before.
Physical AI will need more data centers (that should end the debate of whether data centers are a fad). I just got on a plane in Hong Kong with just facial recognition as my ticket to board. Things are changing whether we like it or not.
Just left Asia and back to the US.
- I am less concerned about a US-China conflict over Taiwan, mainly because of how costly it was to fight a war against drones in the middle of maritime trade routes (Iran). The last large scale amphibious landing was the Incheon Landing during the Korean War, and that was a surprise attack in the 1950’s. Not possible today. Just 6 months ago, I thought Taiwan was the greatest geopolitical risk of my remaining lifetime.
- I have great admiration for Guangdong people (Southern China). They made up 70% of the Chinese immigrants around the world and they powered the rise of manufacturing in China.
I had dinner with a successful Guangzhou real estate developer turned business school professor and financier (helps companies go public). He’s around 60 years old. I asked him a somewhat provocative question, “what stage of life are you in” and his reply “make more money.” The culture of making more money just blew my mind (me with a family, I had been looking to slow down). The other thing he mentioned, when he’s teaching his business school class he said he holds up a simple teacup and asks the class to ask questions. Usually he gets like two questions. It’s a cup! What more to ask? It’s not just Chinese students, but many others that “information is knowledge, but asking the right questions is wisdom.” I think it is important as students but also professionals to think deductively. We can work on that, even with thinking about our own careers in real estate. For example the Guangzhou real estate developer who is a professor and helps companies go public. There is much we can do beyond working on buildings in our careers.
I am glad that a vistor had such an impressive reflection for a visit in China. As a Chinese born and originally from Shenzhen/Guangzhou, I would say the culture in Canton,aka Guangdong is totally different from other provinces in China. You can learn that as a West Coast vs. East Coast in the US.
AI could definitely be a driver for the whole world, and both the US and China have invested heavily to boost development. However, I have yet to see any profitable avenues arising from AI usage. A dancing robot or a pet dog merely showcases engineering advancement. Given the current high unemployment rate (30%+ for graduates within one year of graduation), robots and autonomous vehicles cannot be a driver for China.
While it is helpful to educate children with AI products, the side effects are obvious: more and more people will depend on the output of LLMs, meaning they will lose the ability to think critically.
For the professor story, it's a great change from developer, as the collapse has been five years since the rollout of the 3-Redline policy. I am also curious how he could facilitate financing in such a difficult environment.
This is interesting commentary. You have a lot more background knowledge than me about this topic (I was just taking a vacation).
I found it fascinating that Chinese factories that are fully automated, they turn off the lights in the factory during certain times (to save a few yuan), meanwhile the robots work around the clock sometimes in the dark.
Yes, unemployment will be a continuing issue.
While dancing robots and robot pets are a novelty and engineering feat, I like how open into the public attention it’s been. For example, my middle school aged daughter is a “maker” and I live in SF, the tech capital of the US and World, but if I want to get her access to a 3D printer, it’s not very kid friendly. Or, I have to send her to Nueva School (expensive private school). Why is it so hard?
I agree that over-reliance with LLMs is going to erode some skill building.
But if I’m not around to play chess with my son, the Xiangqi chess robot is a pretty good substitute for skills building.
I think in the educational sector, parents would pay for this stuff.
Anyways, you have some great points. Thank you for providing your insights.
If you look at the skyline of Shenzhen, China it is crazy. Going from a population of 300,000 in 1980 to 18 million in 2026. Want to know where globally priced building commodities and capital are going? Places like Shenzhen, and other high growth developing places.
Makes me think about different real estate cycles and country cycles. I’ve been to China several times in the past, and the real estate growth story was urbanization. Folks going from the countryside and moving to the urban cities. That investment thesis, risk adjusted seemed pretty money.
But a couple things, I was talking to some Chinese. The cities became more expensive to live in and the rural vs urban quality of life started to have parity. That equilibrium started to (I believe/guess since I’m not a China expert) in the slowing of the urbanization trade. So called “ghost cities” is one such outcome, overbuilding.
But in 2026, Shenzhen is growing as the tech city of China. I think it is the “cannibalization” phase where cities become specialized, and magnets for certain types of growth. The US has some of that with Silicon Valley. It’s just interesting seeing another country’s Silicon Valley being built.
Still, if you can find a developing country still in the early to mid stages of the urbanization phase, invest as much as you can (until the rural quality of life catches up, that is).
I got DM’d about physical AI and how CRE professionals could position themselves for that. I’m still thinking about it.
Thanks! Happy to share info as a Chinese!
Thank you. This technology is going to change the world. LLMs are just the beginning. The hardware space is moving fast even in America, and will touch fields like autonomous devices, healthcare, and more.
This week Midjourney, an already profitable AI image-generation company, released a medical device that uses AI to 3D map your body 10x cheaper and 100x faster than an MRI. Technology like this will help people catch diseases like cancer earlier and will prolong lives.
Autonomous vehicles are basically already here. Anyone who's driven in a Cybertruck or Waymo knows this. This same technology will power humanoid robots that will skyrocket our productivity.
These are very, very exciting times. AI doomers like @Ozymandia @CRE @IsItREPE will be caught with their mouths open.
I have no idea why all of this AI shit has to be 100% in or 100% out or why you nerds are constantly polluting the RE forum about it. There is no possible way you used the Cybertruck as an example of cool or innovative tech either.
You’re being an evangelical about your new techno god, not a rational person. I’m not a “doomer” because I don’t think LLMs are currently as revolutionary or applicable to commercial real estate as you do.
What do body scans replacing MRI have to do with commercial real estate? Almost the entirely of your posts on this website are about AI. Not finance. Definitely not real estate. Mostly just AI. There are probably better websites for you.
Well, if you're not paying attention to the most cutting edge technology of the 21st century, you will fall behind in finance. Like OP said, the skills required to manage capital-intensive real estate assets can translate well to managing AI infrastructure, but those who don't pay attention will miss opportunities like this.
I think the point is we (white collar finance / real state professionals) are immediately focused on our careers and jobs. Which at this time is being impacted by LLM’s. But, we as professionals with a longer term investment view of our domains must think beyond LLMs (and not only what affects our livelihood in the short term).
That’s why I think Physical AI will be an important topic, not really touched upon.
Every time you post, you reinforce my point.
I'm not an "AI Doomer" and only someone so committed to fellating Mr Altman and Amodei could possibly think so. My opinion, which is based in fact (unlike yours), is that an insane amount of money is being lit on fire to fund "AI" which no one really wants. LLMs and machine learning and and AI exists. It has uses, some of them very important ones. But it isn't going to upend the economy. It isn't worth the trillions being spent. What I find so damn objectionable is people like you act like if you aren't 100% in on AI, that if you don't take every absurd press release as gospel truth, if you don't predicate your entire life on the premise that AI will do everything and replace every job, that means that somehow you're an idiot or a "doomer".
On a scale of 0-100, you're standing around a 95 in terms of "buying into AI hype." I'm at like a 30. My position is reasonable, yours is not. My position is based on actual objective analysis of what is happening, yours is entirely based on vague predictions about a future we were promised 3 years ago magically appearing tomorrow.
It is near-criminal that we could have solved several pressing social problems with the money that's been wasted on AI, and instead we have some software that produces slop garbage of no real value. What have we gotten for the trillion plus being spent on AI? When it inevitably blows up the economy and takes many people's savings down with it, who gets held accountable?
So instead of investing in coding agents, medical scanners, autonomous vehicles and robotics, all of which have unlocked enormous productivity and created thousands upon thousands of jobs, what would you rather we invest this money in? Another Somali daycare center? More EBT cards? Get a grip.
Coding agents are by far the greatest thing that have come out of AI. This alone is worth hundreds of billions if not trillions. A software project that took months can now be finished in a week. Companies like Anthropic are using agents to churn out robust products at record speed, so the argument that this is just useless "slop" code doesn't hold.
Then there's creative tools, which are profitable and making hundreds of millions in revenue (e.g., Gamma, Midjourney, ElevenLabs).
There's also autonomous devices like self driving cars (Waymo, Tesla), humanoid robots (FigureAI, Optimus), and AI-powered drones (Anduril, Helsing) which will automate transportation, manual labor, and strengthen our militaries.
Also unicorns in the vertical AI space, like Harvey, EliseAI, Sierra, and Decagon, which are automating white collar work. As the frontier models get more advanced, these workflows will only become easier to automate. So the growth we're seeing now is just the start.
I could go on and on. You claim to have an "objective analysis" of what's going on, but in fact, you haven't even scratched the surface.
I'm guessing the farthest extent of your interaction with AI has been drafting emails or asking for dinner recommendations. Obviously, for people with that little immersion in this space, AI will seem useless. But there's plenty of people who've worked much harder than you have in learning this technology, and they're finding a plethora of billion dollar use cases for it. You're oblivious.
I am hardly an AI doomer. I am a LLM (and LLM proselytizer) mocker.
You said in the other thread that LLMs are
"a staple of modern life. Take it away, and we live in an entirely different world, like taking away oil or the internet." That is nonsensical. You act as if LLMs have been around for generations and if they disappeared tomorrow society wouldn't be able to function. Society would barely notice. People would go back to writing their own emails and coming up with their own instagram captions.
There are plenty of theoretical applications for actual "AI," including some mentioned in this thread, but most are not real or provably reliable yet. LLMs in particular, branded as AI not because they are, but to earn investor money, are not actualizations of that possibility, and you don't get to group the two together because the better use cases for machine learning bring up the average of the email-writing and anime-porn-generating slop machine that melts your brain.
And as has been said, Cybertrucks are not only comically lame, but utter trash in their construction. If that's your shining example of the future, that makes you the doomer, not me. I have more faith in humanity.
Stop tagging me with your engagement bait.
First of all, reducing AI to just LLMs is incorrect. Much of the current infrastructure buildout will power AI of all forms, not just language models. Things like autonomous devices, creative visual and audio tools, medical technology and more. I've given many examples of these technologies in this thread.
That being said, you're still underestimating LLMs. Coding agents are automating six figure SWE jobs, along with many other workflows in white collar work. This is what made Anthropic a profitable $1T company, and contributed to countless AI unicorns like Harvey and Sierra.
I'll say the same to you that I said to Ozymandia. You're simply oblivious to AI's value because you haven't taken enough time to learn about it. I suggest you try to look around instead of sticking your head in the ground.
Alright, pencils down for me to guess how CRE/asset intensity professionals can pivot to Physical AI (infrastructure and robots):
Approach #1 (infrastructure): use a Project Finance mindset, and “risk mitigation is value” approach. Similar to traditional RE development, the key risks: Site Risk, Legal Risk, Entitlement Risk, Financing Risk, Construction Risk, Market Risk, and lastly, Technology Risk. Because you have experience managing the other risks, the technology risk side is the part you will learn. If the sector is in the early innings, there are fewer perfect candidates.
Approach #2 (robots): depending on the robot use, it can be a stretch for CRE/asset intensity to Physical AI (robots), but I think it can be done if: 1) you have a personal attraction to the category; 2) can tie the robot use case to improving ____ in a real world environment you are familiar with (in the home, in the office, factory, etc - these are real estate spaces); 3) expand your mind from single asset specific investments to integrated portfolios (this is big when you are making the jump from investor to business service operator - where are you making the robots? Do they interact with each other? Humans? Real estate? Ultimately, what problem do they solve? Including in Maslow’s Hierarchy of Needs: shelter? Companionship? Happiness? Real estate properties should target these things, after all CRE is a box, just like a robot is a box. 4) find a situation where you have “skill set leverage.” Early innings industries are opportunities for people who don’t quite have the perfect resume.
My recommendations are not unique to Physical AI. But it’s a way of thinking if you want to pivot out of CRE into an asset intensive industry. The cool part is there are new early innings categories forming now, to leverage your existing skill set.
If we look over time the institutionalization of CRE, the Money is a herd. If you are in a category that makes money, the institutions will find you. 4 food groups (residential, retail, office, industrial), then hotels, skilled nursing/rehabs, senior housing, REITs, public to private takedowns, self storage, commodity properties (forestry, farm, etc), mobile home parks, mental health/behavioral health, cold storage, data centers, power/infra. Each one of these things was a cottage industry at one point. That’s the beauty and big picture you get from CRE about the evolution of industries. Starts with a box, what does it do to add value, and how does it make money.
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