Tag Archives: technology

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

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

California’s BIG Project: Transforming Rail Logistics

Here’s a project that should have happened 20 years ago.

California’s major ports, at Los Angeles and Long Beach, have been desperate for relief from drayage traffic for containers they bring in. It was a struggle to get rail to the ports so that containers could be directly loaded. In 2002 the Alameda Corridor began to move double-stack double-track trains from near (but not on) the ports to the San Bernardino area. But rail service to the bulk of the US was still elusive. Transloading to 53-foot truck containers was the main activity in the Eastern valley. And that led to more truck traffic on the already busy freeways.

Remember that in the earlier days, pre-COVID, the land-bridge was still a preferred route from Asia to Europe. Ship to LA/Long Beach, Rail to New York or another eastern port, and ship again to Europe. It was lower cost and shorter time than any other Asia-North Europe route. And that included the numerous delays in moving goods by rail out of the port areas.

The problem has been urgent because of air pollution from the many drayage trucks traversing the area. California has been trying to address this problem from many directions. One of the first methods was the Clean Trucks program, which banned engines earlier than 2007 carrying to and from ports, and imposed other requirements on NOx and particulate emissions, especially PM2.5, a demonstrated pathogen for breathing problems. Gate reservations came next, as an attempt to articulate delivery and pickup with container movements in the yard.

But many noticed that switching from truck to rail would cut pollution even faster, and perhaps even improve efficiency. Numerous researchers, including my coauthor Chris Clott and me, suggested that moving functions off the port quickly to inland sites, called inland ports, would work. We even suggested, back when the land-bridge was functioning well, that inland ports as far away as Chicago could boost efficiency. The ports were not interested at that time.

Meantime, the ports and private firms have invested in the Alameda Corridor, which took double-stack, double-track trains through a frantically busy melange of LA suburbs, with many overpasses and intersections that had to be rebuilt, and many regulatory challenges.

Now finally, BNSF, a major Class I railroad, one of two serving the West Coast, has committed to a large inland rail intermodal terminal. It’s near Barstow, CA, out in the desert, kind of toward Las Vegas. This large inland port will be able to eliminate over 200 million truck miles by its completion in 2028.

The latest yard technology will be used, including zero-emission cranes, forklifts, and hostlers, electric plug-ins for refrigerated containers, and hybrid rubber-tired gantry cranes. BNSF has also committed to use the cleanest available switching locomotives in the yard.

The project is appropriately nicknamed BIG (for Barstow Intermodal Gateway). The press release says “By relocating container sorting and processing from congested port-adjacent communities to Barstow—a high desert hub with strong transportation infrastructure—the project enables a major mode shift from trucking to cleaner, more efficient rail.”

California and its residents are serious about industry controlling pollution.

Stuart Chirls·Wednesday, June 17, 2026

https://www.freightwaves.com/news/bnsf-wins-local-approval-for-new-4b-california-rail-intermodal-project

Christopher Clott, Bruce C. Hartman, Supply chain integration, landside operations and port accessibility in metropolitan Chicago, Journal of Transport Geography, Volume 51, 2016, Pages 130-139, ISSN 0966-6923,
https://doi.org/10.1016/j.jtrangeo.2015.12.005.