Everything is Computer

• Smartphone blueprint (compute + power + sensing + software) now applies everywhere.
• The “modular middle” — subsystems between chips and products — determines competitiveness.
  • Whoever owns it owns the industrial stack.
• China wins by reapplying one electro-industrial stack across categories.
  • BYD: batteries → vehicles → trains. DJI: drones → robotics. Xiaomi: phones → EVs.
• U.S. chose design over manufacturing; now dependent on foreign ODMs.
  • No domestic modular middle = premature vertical integration or foreign lock-in.
• Defense now downstream of consumer electronics, not aerospace.
  • Drones, autonomy, power electronics all built on Asian supply chains.
• Aerospace moat eroding as systems electrify and become software-defined.
• SpaceX model: own architecture + key modules, leverage global supply chains elsewhere.
• Fix: distributed, automated U.S. supplier ecosystem — no subsidy incumbents, invite foreign fabs.
  • Software-coordinated manufacturing networks, not nostalgia-driven reshoring.

Ryan McEntush, a16z American Dynamism — Jan 7, 2026 · 2026-01-07 · Read on a16z.com