Thoughts on the Market — How U.S. Industry Is Reinventing Itself
Morgan Stanley Podcast | September 16, 2025
Host: Michelle Weaver (US Thematic Strategist)
Guests: Chris Snyder (US Multi Industry Analyst), Adam Jonas (Embodied AI Strategist)
Episode Overview
This episode recaps the key takeaways from Morgan Stanley’s annual Industrials Conference, focusing on how U.S. industry is adapting and innovating amidst new macroeconomic realities, technological transformation (AI, humanoid robotics), and geopolitical shifts (tariffs, reshoring). The discussion explores opportunities and risks as U.S. industrial sectors chase a new era of growth and competitiveness.
Key Discussion Points & Insights
1. Major Themes from the Industrials Conference
[00:13 - 01:36, Michelle Weaver]
- AI as Central Topic: Nearly every company is engaging with AI, both as adopters integrating AI into operations and as enablers building AI solutions for others.
- Macroeconomic Uncertainty: Industrial firms are waiting for signals of a broader reacceleration—expansionary PMIs (above 50), better interest rates, and clearer tariff policies are critical.
- Tariffs & Margin Mitigation: Tariffs are a central concern, but most companies feel prepared to defend their margins through pricing strategies and shifts in supply chains.
“AI is incredibly important. It appeared in the vast majority of fireside conversations ... companies were talking about AI from both the adopter and the enabler angle.”
— Michelle Weaver, 00:23
2. Macro Outlook and Industrial Growth
[01:36 - 02:47, Chris Snyder]
- Stable to Modestly Improving Conditions: Sectors like data centers, non-residential construction, and plant manufacturing are strengthening, while residential HVAC, energy, and agriculture see weaknesses.
- Supportive Environment for Growth: Current stability (supported by potential rate cuts) is considered a launching pad for decade-high industrial growth in 2026-2027.
“We came away more constructive on the cycle because things are stable if not modestly improving into a rate cut cycle.”
— Chris Snyder, 01:52
3. Reshoring: $10 Trillion Opportunity
[02:47 - 04:45, Chris Snyder & Michelle Weaver]
- Massive Investments: U.S. manufacturing construction starts are up 3x post-pandemic, with commercial and industrial lending at record highs.
- Shifting Global Dynamics: Since 2019, the U.S. has steadily gained share of global capex, reversing years of decline since China’s WTO entry in 2000.
- Reshoring Is Incremental but Cumulative: The U.S. likely won’t win every project but is well positioned for incremental gains, especially as tariffs and domestic incentives change competitive dynamics.
“This is a game of increments ... we simply believe the US is better positioned to get the incremental factory over the next 20 years relative to the prior 20.”
— Chris Snyder, 04:15
4. Power Constraints & Competitive Advantage in Manufacturing
[04:45 - 05:56, Michelle Weaver & Chris Snyder]
- Electricity Demand Surging: AI/data centers are intensifying demand, currently outpacing supply. Data centers now consume about 5% of U.S. electricity, manufacturing 26%.
- Electricity Replacing Labor: As manufacturing becomes more automated, electricity consumption is expected to rise, benefitting the U.S. (abundant power) over low-labor-cost regions.
“If you think about the future of US manufacturing, we're simply taking labor out and replacing it with electricity. That is a phenomenal trade off for the US...”
— Chris Snyder, 05:28
5. Robotics & Humanoids: The Next Industrial Revolution
[05:56 - 08:51, Adam Jonas]
- Dual-Use Tech Drives Onshoring: Humanoid (agentic, autonomous) robots are key both to the need for and the ability to bring manufacturing onshore. The U.S. won’t replicate China’s mass labor model but can leapfrog with autonomous robotics.
- Game-Changing Economics: By 2040, the cost per humanoid could equate to ~$5 per hour, generating ~$200,000 in net present value over 15 years—massive productivity gains.
- Competition and Talent War: U.S. tech/TMT companies are rapidly ramping up hiring in robotics and manufacturing, signaling advanced industrial reshoring.
- U.S.-China Race: China holds a 3-5 year lead in many aspects of supply chain, manufacturing, and physical AI, which may widen unless U.S. policy makers act.
“Autonomous robots are both the cause of onshoring and the effect of onshoring at the same time. And it's going to transform every industry.”
— Adam Jonas, 06:36
“When you think about cost...centered on around $5 per [hour]...If that can replace two human workers at $25, that can NPV to around $200,000...That's $320 billion of value if you shift just 1% of the labor market.”
— Adam Jonas, 07:22
6. Risks and Investor Considerations in the Robot Revolution
[10:47 - 12:33, Adam Jonas]
- Enormous Opportunity: Labor represents $40 trillion of global GDP; advanced robotics could push economic value well beyond that.
- Potential Displacement Risks: Rapid automation may cause social upheaval without careful management—historic examples cited include the French and Industrial Revolutions.
- Call for Responsible Innovation: Investment and policy must balance innovation with social resilience and workforce transition.
“The risks will come and it is our professional responsibility, if not our moral responsibility, ... If we have labor displacement go too quickly, there's serious problems. And if you don't believe me, go look at the French Revolution or the Industrial Revolution ...”
— Adam Jonas, 11:37
7. Innovation Priorities for Industrials & Investors
[12:33 - 13:57, Michelle Weaver]
- AI Integration Accelerates: Companies increasingly go beyond basic AI (e.g., chatbots) to industry-specific, transformative use cases (like AI-optimized airline operations and seamless manufacturing processes).
- Adaptability and Collaboration Essential: The market’s winners will prioritize innovation, adaptability, and collaboration in the face of ongoing change.
“About 2/3 of companies at the conference mentioned AI in some way, shape or form. We know that from transcripts and we're seeing them continue to integrate AI into their businesses.”
— Michelle Weaver, 12:38
Memorable Moments & Quotes
-
“Talking about the world before AI, robotics and humanoids is like talking about the world before electricity or ... before the Internet.”
— Adam Jonas, 11:12 -
“We're watching China very, very closely. It makes me a little bit kind of nervous ... but it's invariably going to happen. You're going to have increased involvement of whichever administration ... you need those human bodies to do other things in this economy as well.”
— Adam Jonas, 09:27
Notable Timestamps
- 00:13 — Main themes from the Industrials Conference (AI, macro, tariffs)
- 01:36 — Sector trends and macro outlook
- 02:47 — U.S. Reshoring: drivers and data
- 04:45 — Power constraints and manufacturing competitiveness
- 05:56 — Robotics/humanoids in the new U.S. industrial model
- 08:51 — U.S.-China tech competition
- 10:47 — Risks and opportunities for investors in robotics
- 12:33 — Changing innovation priorities for industrials
Conclusion
The U.S. industrial sector stands at a turning point, driven by AI, advanced robotics, and a reshoring wave bolstered by new policy and macro tailwinds. Companies and investors must grapple with both the opportunities and complex risks—including power constraints, workforce shifts, and geopolitical competition—while leaning hard into innovation, adaptability, and responsible advancement.
Episode tone: Forward-looking, pragmatic, cautiously optimistic, and candid around both opportunity and risk.