Category Archives: Strategy

AI use growing, but cost…?

This report by McKinsey, the global consulting firm, sheds some light on what’s happening in the commercial realm with AI. It’s based on an online survey taken in May and June 2026, with 1,719 participants in 97 nations, spread across a full range of regions, industries, company sizes, and functional specialties. 36% of respondents work for companies with more than $1B USD in annual revenue.

The heat map below, from the report, shows the relation of AI use that has passed beyond R&D into scaling phase by industry type and business function. The entries are the percent of respondents who say their firm is into the scaling phase. The business function rows are ranked by total percent.

What stands out?

  • How low are supply chain and manufacturing functions!! You would think there would be a lot of applications in these business functions. But, NO! Maybe it’s just because these functions are typically cost-conscious and slow to choose new technology.
  • But in advanced manufacturing, industry use in supply chains and manufacturing is close to the highest at 14%.
  • IT, knowledge management and software engineering are high. That’s what one expects when a technology such as AI emerges. We saw the same thing with the coming of the internet in the late 1990s.
  • Media is high!! What a surprise! The AI engines train on large quantities of media output. If they just operate as a grandiose search engine, they already add value of a kind we can appreciate.

One of the fascinating tidbits from the report is that chatbots are the most frequently employed form of AI. We guess that already, if we use the internet at all today. Every website seems to have one. And if my experience is any guide, they are mostly useless. They give answers to stupid questions, and can’t handle anything even slightly complicated. The most they do is have a real agent call you, and mostly they don’t do that. They direct you to someplace in the company’s sitemap, which you have probably already read without profit before desperately trying the chat.

I question whether this is the best use of all the energy and other resources consumed searching and re-searching all those tokenized training documents.

We haven’t yet seen the real cost of all these searches, over and over again, of all those training documents. It’s measured in tokens, and currently the tokens are underpriced as a loss leader to get us hooked on using AI instead of the far simpler internet search like Google. We see in daily news how many massive data centers are being built, how much resource they consume (electricity, water, grid capacity). Those costs have to be paid for in a viable business. They have no choice but to charge us for the use.

Just like internet and cell phones and cable TV, and phone service before that, we users will have to pay.

Dan Tinkoff, Lieven van der Veken, Michael Chu, and Tara Balakrishnan, August 2026

India’s Maritime and Ports Goals

India is instituting major improvements in their ports and maritime system. This is crucial, since India is rapidly becoming an important technology and manufacturing center for the world.

Drewry recently put on a webinar about India’s plans.

India is taking steps to improve shipbuilding. The figure below shows regions affected.

India is also driving to increase India-flagged ships, and control more ships to carry their production goods. They want to increase the capacity of trade from India, as well as trade to India.

One aspect is improving waterways, including inland waterways. The figure below shows their goals for 2047.

Funding is important. India does not want to make the mistake many countries have made, seeking external capital, for instance from China. That would not be geopolitically smart, since it creates a dependency on a large foreign state and gives that state some control. But India now is generating excess capital looking for investments, because of the fast development in the country. India can do a lot of it themselves, even including private Indian financing. So India is creating financial incentives.

It’s a demanding agenda.

Drewry claims that India should focus on an ecosystem approach rather than individual projects.

With geopolitics favoring India right now as a manufacturing destination, the projects should all work together to create the overall maritime service system the nation needs.

The 30-Day Gate for AI

I was unaware of this shift in US policy from reading general media accounts of what’s going on. Gwanhoo Lee identifies clearly the effect on firms playing in the AI marketplace.

As new and better models become available, both China and the US are now going to screen them for national security impact and decide whether to allow sales. The US can no longer claim to be different through allowing competition to determine the best available product.

It’s not surprising as we drift toward a totalitarian government here in the US. First, the national government has taken ownership stakes in high-tech companies such as Intel. Now the government is exercising control over what can be sold in the AI marketplace, so the consumer, particularly the international consumer, no longer determines what’s best through their money choice. It’s national socialism.

Furthermore, the way is now opened for AI decisions by the government to be bought. Back the government position and policies, or you can’t sell your product. If money changes hands to lubricate the decisions, say by support of a White House remodeling or a reflecting Pool redo, we’ve become a third-world country, no different from Angola or Mozambique. (These countries might argue with my characterization, and I agree, it’s egregious of me to make examples of them– but there are lots of examples around the world now.)

While the US leaders can talk the talk, they can’t walk it any more.

The situation is more complicated with AI than with earlier technologies such as relational databases or ERP or TMS/WMS. In those cases, once you purchased, you relied on the vendor to supply maintenance and support. They did it more or less well, and engendered many howls of fury about its quality.

AI is a bit different, because of the learning or training component. An AI product becomes more valuable over time because it trains on a larger and larger set of inputs. The software may improve somewhat, with better algorithms, but also the training set becomes larger, so more refined conclusions can be drawn. You now have two motivations for making a new purchase, or upgrading your subscription.

For users of AI technology purchased from the behemoths, it’s time to focus on exactly what job you want done, and whether some technology will accomplish it. Chasing the latest new version may not serve your specific goals. Your experts need to be able to tell you why results, financial or business, will be measurably better with a new model. Mostly this has nothing to do with the perceived security risks to the US tech environment. but corporate execs can control it much more closely than by following the AI news.

Gwanhoo Lee July 22, 2026

https://www.linkedin.com/pulse/30-day-gate-gwanhoo-lee-xvlue