If the field is going to produce anything useful, cheap training gets us there faster.
But don't forget about the hysterical/irrational component that also causes prices to go up when investors are all worried about FOMO. Of course, sure, ASML isn't going anywhere, but their stock price isn't based on them "sticking around", it's based on the idea that growing usage of AI will require exponentially more computing power over time, and DeepSeek kinda put a pin to that balloon.
Anyway, this seems like a bigger problem for companies whose business model is actually selling those chips. It couldn’t be the case that much of ASML’s valuation is based on people continuing to use their old 28nm machines, right?
Main deficiency they have is in the litho machines.
We thought we won, and we thought we could "control" what other markets do, and we thought we could focus on only the "high-value add". Now where are we?
China is an enormous country. It has over 4x the population of the USA. Unless you assume Chinese people are fundamentally different, it should be producing 4x the output in every field vs America. Yet the impact and legacy of communism is dire: China clearly isn't even close to 4x the productivity of the USA. How many companies on the leading edge of AI does the USA have? Meta, OpenAI, Anthropic, Google, NVIDIA, Cerebras, X.ai to pick just a handful of thousands.
Meanwhile Europe has produced one, Mistral (or two if you count DeepMind), and China has produced one. DeepSeek meanwhile, despite being impressive, has been doing the usual thing Chinese firms focus on of rapidly driving down the cost of tech already proven out by companies elsewhere. They have a long history of doing this and it's something they take cultural pride in, but at the same time, Chinese tech executives do worry about their relative lack of leading edge innovation. The head of DeepSeek has given interviews where he talks about that specifically and their desire to change attitudes and ideas about what Chinese firms can do, because there's a widespread cultural belief there that the Americans go from 0-1 and the Chinese can go from 1-10.
It's also worth remembering that prices in China are artificial. It's a somewhat planned economy still. Sectors of the economy with military relevance are heavily subsidized and they play games with their exchange rates, indeed perhaps in an attempt to forcibly deindustrialize the west. Just because something is made cheaper there doesn't necessarily mean they're doing it better. It can also be that they're just subsidized all the way to do that, and the average Chinese citizen is the loser (because they can't afford to buy things that would otherwise be affordable to them).
What makes you think innovation/productivity/performance scales linearly with population?
China has roughly 500x the population of Jamaica; should they have 500x as many sprinting gold medals?
> has been doing the usual thing Chinese firms focus on of rapidly driving down the cost of tech already proven out by companies elsewhere
R1-Zero is actually new and interesting approach to building reasoning capability, that R1 is built on. Worth reading the paper.
I covered the Jamaica disparity by "unless you think there's something fundamentally different about the Chinese". In the case of people from some parts of the world being faster runners there is something different about them genetically, that translates directly into superior athletic performance. Is that the case for Americans vs Chinese? I don't know but haven't seen much evidence of it. The gaps are probably more due to culture and government i.e. artificial and quickly fixable, if they want to.