Dan Bin: In 2025, the AI application sector will explode, and the software industry may experience disruptive changes, but 2025 will not be a year of AI disruption

The AI concept continues to explode in popularity, and the billionaire private equity mogul Dan Bin recently shared his judgment on the AI market in 2025.

Dan Bin, chairman of Oriental Harbor, began his securities research and investment career in 1992. In 2007, he published "The Rose of Time" and is a staunch practitioner of value investing in China.

In 2023, his company, Oriental Harbor Investment, achieved an average return of 22%, winning the championship among private equity firms with over 10 billion yuan. In 2024, according to the Morgan Hedge ranking, among the 9,956 hedge funds globally with assets under management exceeding ten million dollars, Oriental Harbor's overseas fund, Oriental Harbor Investment, ranked third in 2024 with a return of 46.99%.

The investment representative has summarized the key points as follows:

1. 2022 was the inaugural year for artificial intelligence, and this cycle should last until 2032, or even longer. Therefore, we believe that 2025 is still in the early stages of this cycle.

In 2025 and for a considerable time thereafter, Oriental Harbor's investment portfolio may primarily focus on artificial intelligence directions that can change the world.

1. We judge that the application side of AI may explode in 2025. AI applications may disrupt many industries, and in the future, 90% of industries in human society may be disrupted by AI.

2. In 2025, there may be breakthroughs in the software and application sectors and companies.

We will shift from hardware to focus more on companies with software and application business models.

4. In the software field, both Chinese software companies and top global companies are expected to perform excellently in 2024.

5. Humanoid robots may achieve significant breakthroughs in 2025 or even 2026, and this direction should receive sufficient attention, as it is likely to become a new driver of global market value growth.

6. There may be a clear distinction between new forces in the automotive industry and traditional companies, and we should be able to see the results around 2025 or 2026.

7. 2025 is likely to be a year without disruptive changes. Because AI has seen some growth in the past two years, it may face some challenges, but these are not disruptive changes; overall, it is a process where opportunities continue to emerge.

Dan Bin believes that in China, practicing value investing still requires standing on the shoulders of giants and keeping pace with the times. Because what truly drives the growth of wealth in human society is technological progress. Humanity is ushering in a more disruptive technological advancement in artificial intelligence, with an upward cycle expected to last over ten years, or even longer, and the focus will be on investing in artificial intelligence for a long time to come Talking about turnover rate, Dan Bin bluntly stated that the turnover rate is relatively low, basically buying and holding, with very few adjustments, and any adjustments are minor.

The following is the essence compiled by the investment notebook class representative (WeChat ID: touzizuoyeben), shared with everyone:

The AI cycle will last until 2032, with 2025 still in the early stages

Currently, humanity is 迎来 a more disruptive technological advancement in artificial intelligence, and its upward cycle should last more than ten years, or even longer. In the past, there were the electronic hardware era, the internet era, and the mobile internet era, all of which had upward cycles of over ten years.

If we consider 2022 as the first year of artificial intelligence, then this cycle should last until 2032, or even longer. Therefore, we believe that 2025 is still in the early stages of this cycle.

Our investment strategy remains value investment and long-term investment, with long-term investment being an important component of value investment.

In 2025 and for a considerable period thereafter, Dongfang Hongyuan's investment portfolio may primarily focus on artificial intelligence directions that can change the world. There may be some minor adjustments in 2025, but overall, we are fully committed to embracing the era of artificial intelligence.

AI applications may explode in 2025

Technological advancements have flourished in the past year (2024). Just entering 2025, we saw Mr. Jensen Huang's speech at the electronic consumer event, which was very shocking. Whether in the field of autonomous driving, humanoid robots, or AI computers, there have been exciting news.

Additionally, we judge that AI applications may explode in 2025. In the past few years, there has been significant market value growth in hardware, but growth in software and applications has been limited. In 2025, the industries and companies in the software and application sectors may achieve breakthroughs. This year, we may shift from hardware to focus more on companies with business models in software and applications. Recently, I used a software called Doubao, which I think is an outstanding product in AI applications in China. Just like in the internet era, WeChat and Douyin have strong advantages in the application sector.

Therefore, in 2025, Dongfang Hongyuan will not only focus on hardware and software but will also put more effort into exploring the application sector.

New forces in the automotive industry and traditional forces will determine the winner in 2025 and 2026

In fact, whether it is the decline in hardware costs or the decline in training model costs, both have a huge promoting effect on AI applications. For example, in the field of autonomous driving, companies represented by new forces and Huawei, which have a large amount of data supporting AI applications, may maintain an advantage in industry competition. Traditional companies, due to a lack of data accumulation, may face disruption in technology applications.

Therefore, I believe that the new force companies in the automotive industry and traditional companies may determine the winner, and we will likely see the results around 2025 or 2026

Disruptive Changes in the Software Industry

In the software sector, companies represented by CRM are transforming from traditional sales software companies to AI application companies due to the accumulation of vast amounts of commercial data. Therefore, the software industry may also experience disruptive changes. In the education sector, there has never been a super-large service company in human history, but the application of AI may bring significant changes.

For example, in the past, competition in the education industry depended on the ability to train teachers, but in the future, it may depend on whether powerful AI teachers can be trained to achieve one-on-one teaching without quantity limitations. If an education company can train excellent AI teachers, the industry will also undergo disruptive changes.

Thus, the application of AI may disrupt many industries, and in the future, 90% of industries in human society may be disrupted by AI.

Three Promising Directions for AI

AI applications are attempting to break NVIDIA's monopoly, and this direction is the focus of our research.

The second direction is the software field, where both Chinese software companies and top global companies are expected to perform excellently in 2024.

The third direction, humanoid robots, may achieve significant breakthroughs in 2025 or even 2026. This direction should receive sufficient attention, as it is likely to become a new driver of global market value growth. Of course, throughout the AI process, there are many sub-application areas, including AI applications in education, whether software companies can form new leading enterprises through AI, and the autonomous driving sector may also see breakthrough changes, leading to disruptive changes between traditional and modern industrial chains. These are all opportunities.

No Disruptive Changes Expected in AI by 2025

I personally believe that the macro background in 2025 does not have the high valuation context like the internet bubble, so the probability of changes that significantly impact the global capital market, similar to the 2000 internet bubble, is relatively low.

Additionally, there is no macro background similar to the subprime mortgage crisis.

Therefore, my basic judgment is that 2025 is likely to be a year without disruptive changes.

Given the explosion of AI technology in 2025, 2023 and 2024 are both preparation periods, and 2025 is just beginning. We have already seen significant technological advancements at the electronics exhibition.

Thus, I believe that 2025 will be an exciting year, both domestically and globally.

Of course, due to certain increases in the past two years, there may be some challenges, but they are not disruptive changes; overall, it is a process where opportunities continuously emerge.

We see excellent Chinese companies, such as Douyin, Pinduoduo, sports brands, and manufacturing companies, moving towards globalization. Asset management companies should also embrace globalization like manufacturing and internet companies to better reward investors Source: Investment Workbook Pro Author: Wang Li

For more insights from industry leaders, please follow↓↓↓

Risk Warning and Disclaimer

The market carries risks, and investment should be approached with caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at one's own risk