China is building for the future, while Western Democracies are afraid of the future, and of their own shadow.
Of course, like literally every other time this has played out in computing history, the companies focused on price performance will end up with more economic resources, and get to turn the upgrade crank more often and for longer.
Also, of course, China's way ahead of the US on things like renewables, batteries, and electrification of their economy. All of that feeds into cheaper power to run the models, but I suspect it's a second order effect vs. "improve the software".
https://cryptonews.com/news/china-doubles-down-on-crypto-ban...
Eh? The entire CPU & GPU wars for the last 30 years consistently rewarded the top performer above all else. Price/performance has always been the consolation prize of the loser of any given generation, and sitting in the price/performance pit for several generations in a row results in being essentially out of money in a fringe position. Like, for example, AMD's GPU division currently but also AMD's CPU division before Athlon 64 and also Phenom up through Ryzen.
The iphone is the best selling computing device in history and is among the most expensive in its category.
Of course people show off their iPhone. It's a big reason of owing one, it's also a big reason behind slight/major redesigns (people are able to show they have the latest model).
Perhaps you take "show off" literally, like someone going "hey, look, I have an expensive phone"?
It's way more subtle than that, only someone totally crash would do it that way. It's done the same way people buy expensive sneakers and clothes, or how people buy Teslas (or used to) and similar stuff. As a consumer identity that signals you afford a higher cost lifestyle.
This year, things look pretty comparable according to this shopping guide. You can get slightly worse or last year's line for about $100 less, or something with comparable specs (some better, some worse) for about the same price:
https://www.androidcentral.com/phones/apple-iphone/4-android...
The thing with price/performance is that it doesn't dictate high end or low end. It just says you need to be competitive at some price points.
They're subsidizing this in many ways - Huawei chips, new DDR5 memory fabs, etc.
Ultimately, DeepSeek's architecture is significantly more cost effective than anything from Google, OpenAI, or Anthropic.
Presumably, they'll incorporate DeepSeek's MLA* architecture to get all the benefits for next year's releases (if not this year's upcoming releases) which will bring down their costs...
They need to actually make money, though, so that might still not give them enough room to make enough money.
Ultimately, hardware depreciation is like 80% of total spending. So power is not as big of a deal in cost. The bigger problem is if you can get the power at all, not how expensive it is.
If you want to bring down inference costs, using less hardware is far more effective than getting cheaper electricity.
Google is in a sweet spot, because they aren't paying 80% margins to nVidia for hardware. So they're probably paying half as much deprecation as everyone else is (or maybe 1/4th for inference - which is now the biggest percentage overall).
The US is subsidizing in exactly the same way through the US Chip Act (as well as state level tax subsidies):
> The act includes $39 billion in subsidies for chip manufacturing on U.S. soil along with 25% investment tax credits for costs of manufacturing equipment, and $13 billion for semiconductor research and workforce training
https://en.wikipedia.org/wiki/CHIPS_and_Science_Act
> Presumably, they'll incorporate DeepSeek's MLA* architecture to get all the benefits for next year's releases (if not this year's upcoming releases) which will bring down their costs.
You can be sure the frontier labs all have similar approaches, but they just don't talk about them. That's why eg Google Flash (the old versions!) were do cheap.
I mean Google published MTP a month or so ago and it has sped up Qwen models by 1.7 times.
If that is what they still publish you get an idea of what they aren't.
Like there was something in the American DNA that was lacking in China and innovation would always need to happen here.
But China it seems doesn’t need the US to produce great cars, devices, robotics, or AI. We absolutely need China to help us build all of the above.
I think this is vastly underestimating what "catching up" means. All my life, people have been saying "China copies". Now they are objectively better at many things (including robotics), and... well it seems that we cannot "just copy".
I saw western companies trying to "copy" superior Chinese technology, talking to brilliant engineers explaining how much they were learning by actually trying to copy.
The lesson I got from that is that China did not "copy"; they learned. And it took time, and now they are better. Now the western world has to learn from them, I guess.
It got told as: the evil English made it illegal to even import blueprints for factory machinery, to keep the colonies in resource-extractive poverty, so they'd have to send raw materials overseas to get processed, then import the finished goods. (My other history teacher, the Anno / Dawn of Discovery video game series, also cemented this bit about resource extraction in my head at a young age.) But then thanks to heroic ingenuity and cunning, I was told, the US was able to outwit the colonizers and process its own raw materials, eventually gaining full economic, military, and political supremacy.
Sounds familiar.
And Apple played a huge role in teaching them. We should all thank Tim Cook and team for almost single handedly bootstrapping China 2.0, the China that runs circles around the west in terms of production and development.
Peter Zeihann really got it wrong in his latter books.
[0] https://www.simonandschuster.com/books/Apple-in-China/Patric...
Yes, but "the US" is reductive. The exploitation wasn't done by the towns having their tentpole industries shipped overseas, it was done by the people shipping them overseas and pocketing the profit. US capital owners made a deal with the Chinese Communist Party that was good for both of them and bad for the US.
The promise was always to get cheaper goods and services in the US, so long as the Chinese firms never competed. Guess what, they compete now.
We also can’t blame subsidy. All countries subsidize their industries.
This video on the auto industry covers a different industry but has a lot of the same rhymes as far as China’s strategy:
https://youtube.com/watch?v=UhhZu0ZHdw4
The gist of it is that China does the following:
1. Treats low margin industries like mining and utilities as areas to focus investment and come up with incremental improvements, making those available to all companies. The West, by contrast, allows private companies to handle those industries, who logically don’t bother investing in them since their investors consider those basic industries to be low-value segments of the production chain. But now we see those advantages in China where investments have been made (e.g., the best battery chemistries and mining/refining, the cheapest power (when was the last time your local utility company focused on reducing pricing?)).
2. Because all companies in China have access to the same excellent infrastructure, they must compete furiously on quality/features/price of their products.
3. China allows foreign competition so long as they operate in China (see: Tesla) further insisting that their domestic products be globally competitive and that foreign products sold in their country benefit their local ecosystem.
Jet engines, proximity fuzes, radar, how to make a nuclear weapon, etc. are all examples of British / Commonwealth technology "gifted" or "traded" to the USofA during the WWII years in exchange for production.
So, not IP theft .. but absolutely foreign ideas taken in by the US and built upon.
But I think we underestimate the Chinese diaspora. They had been running factories, shops and banks from Singapore to Suriname for generations and answered the call from the PRC to share that knowledge base.
I personally have little issue with countries doing that for domestic use (I hate using term "IP theft"), but to re-export so quickly you can't run a viable business in your own country is not fine.
> He learned of the American interest in developing similar machines, and he was also aware of British law against exporting the designs. He memorized as much as he could, and departed for New York City in 1789. Some people of Belper called him "Slater the Traitor", as they considered his move a betrayal of the town where many earned their living at Strutt's mills
https://en.wikipedia.org/wiki/Samuel_Slater#Early_life_and_e...
It plays this way: you're behind, you ignore IP rules. You're ahead: you create them to defend your newly-gained status.
Also please no moralizing here on IP when the entire OpenAI/Anthropic playbook has been "massive straight up IP theft". The irony.
Can we stop this crying baby already. Every country has stolen from the other. Did you really expect countries to settle on sewing closes and ship all profits to foreign companies for eternity? The IP is just an artificial concept that participants follow for so long as it benefits all parties.
Looking at Loongsons processors for instance. About 15 years ago they coudl barely compete with a Pentium 2. Now they are about 4-5 years behind Intel/AMD. Further behind on some more specific work loads (SSL decoding for example) Not great but that is a decent jump. The jumps between generations are pretty decent.
LA446 was a decent enough processor core but had an awful memory controller that held it back as soon as it needed to reach outside of cache. As such it was SLOW.
But they learned the lesson and now the LA664 almost entirely fixed that issue. I think a big part of performance issues is that they are working domestic 5 to 7nm processes, so a good 5-7 years behind.
They are launching the LA864 later this year and are touting some decent performance gains. That is just marketing so far but something to keep an eye on.
Considering that these chips are using their own ISA, own designs, domestic manufacturing and they aren't terrible is a big thing.
I suspect in the next 5 years they have the chance of completely closing the gap. But it can also go the other way that they end up stalling as smaller nodes get much more difficult to attain.
I'm not finding many benchmarks but looking at this https://chipsandcheese.com/p/loongson-3a6000-a-star-among-ch...
it looks like it's right around Zen 1 class performance. Which I hate to tell you is 10 years old already...
You could be right! But I do see this claim come up every time Chinese tech comes up. It might be a valid concern but it might also just be folks attempts to try and undermine the technology gains of the nation.
The ISA they have developed with based off years of with with MIPS and RISC V, so it isn't entirely new but they are definitely pushing it forwards. I have no idea if any of their developments could be back ported down the RISC V.
There's nothing special about anything we design in the US other than time and money commitment to create it. China did have some espionage of course going on, but the vast majority of shit isn't some secret. And with the US shitting on China with restrictions, we increasingly caused them to invest time and money into things they otherwise would have passively accepted as coming from the west. ASML sees the writing on the wall for themselves in particular.
The US has generally resorted to propaganda rather than addressing the self-inflicted structural conditions responsible for the erosion of our dominance. China also conducted a broad, sustained, large-scale campaign of IP theft across almost every industry.
Obviously there is no natural law preventing China from innovating (We have treated political liberalism as a prerequisite to innovation in a way that was always partly self-congratulatory), but it's also obviously true that the speed of the gap closure is due in significant part to theft.
That doesn't change the fact that they are now a legitimate competitor who has gotten a lot of things right (and among these, some things that we get very wrong) and probably actually leads in some areas.
and this acknowledgement will pay your bills
In most Americans' eyes, unfortunately, there was. It was just known by the name "American Exceptionalism". Yes, it's nonsense, but unfortunately it is nonsense that has historically been used by most empires throughout history, and believed just as fervently by said empires' populi since it's one of the central elements of imperialism as a whole.
Capishe?
Seriously though, take a hike if you can't be bothered to read things.
You’re defining “better” is “absolute best at any cost” instead of the more balanced price/performance considerations consumers actually take, so you can declare America #1 again. In a practical sense DS4 is so much cheaper at similar quality that it’s better in most cases. If i can throw 10x the tokens at the same problem at slightly lower quality, i can probably do a better job.
There is a best model, and then there is what you can afford. Call that the "better value" or something if you must, but calling it the "better" model is clearly spreading a falsehood.
We failed you somehow, kids. I'm not sure where, but we failed you.
There is (was): attracting the best minds around the world to a free and stable society. Trump voters threw it all away because they couldn't stand non-whites coming to America and doing better than old stock Americans.
China is comprised of ~91.5% ethnically Chinese citizens. [0]
> Tump voters threw it all away because they couldn't stand non-whites coming to America and doing better than old stock Americans.
The U.S. is more diverse than it's ever been [1], and under Trump we're still below the deportations of Obama's terms.
Sounds like open-borders immigration was never necessary in the first place, given that we're being beat by a country with a similar demographic skew that we had like 80 years ago. Coincidentally, when we arguably had our best economic opportunities for citizens. Who'da thunk.
Clearly, the only solution to our fading relevance is opening the border again and importing 500 million more ""doctors and engineers"" all the while China is investing in their *actual* doctors and engineers, and has extremely strict immigration policies [2].
[0] https://en.wikipedia.org/wiki/List_of_ethnic_groups_in_China
[1] https://en.wikipedia.org/wiki/Historical_racial_and_ethnic_d...
I'm absolutely opposed to illegal immigration and have a more extreme position on how to deal with it than most Americans.
What I'm irked by are Trump's attacks on legal immigration and the general worsening of the environment. ICE's kidnappings, the 100k H-1B fee, and the recent Green Card thing have deeply eroded America's attractiveness to legal immigrants.
I think when MAGA came after H-1Bs, it became pretty clear that it's not about law and order, it's just a race thing.
And if you want to go gloves off, I'll just say it: the main problem in America is that its 3 major ethnic groups are infected by anti-intellectualism and slothfulness, whereas the Chinese and various other cultures are not. The direct benefit from skilled immigration is so that we can increase the ratio of people who actually value education and hard work vs the failing old stock Americans whose broccoli-headed kids dream of becoming YouTube influencers instead of astronauts.
The desire to be influencers isn't as boneheaded as you think, in a future where AI is solving the hardest technical challenges, the ability to get attention and create community is the last frontier. Influencers and salesmen will be eating good when scientists and engineers are derelict.
Ethnic diversity is neither really here nor there in terms of the measurable needs that immigration fulfills. Immigration keeps economic and population growth rates trending up. Having high skilled immigration to bolster science and research is nice, but it's still mainly about the growth.
Yea, Obama deported lots of people, but even then we still had net positive migration. Now under Trump, we have net negative migration for the first time in decades. The very public terror campaign waged by the Trump admin was in part to deter immigration in the first place.
> Sounds like open-borders immigration was never necessary in the first place, given that we're being beat by a country with a similar demographic skew that we had like 80 years ago.
1) Economic growth is possible with stagnating/declining population levels if you overcome those deficits with commensurate increases in productivity per capita. Otherwise, you're cooked.
2) The US is actually far more productive per capita than China - in fact, the US is one of the best in the world, as far as that goes.
With those points in mind, we can begin to see why China has an easier time growing economically with little immigration. The US has a much harder time doing the same. We need more population, since it's just harder to squeeze more productivity out of our already very productive workforce.
Once China achieves similar productivity levels, they will need to rely more on growing the population.
We were actually on track to catch up to China's population levels in a few of decades (thanks to immigration). So unless China successfully pivoted to mass immigration or expansionism, the US was likely to remain dominant - easily so - for the foreseeable future.
That's why the MAGA anti-immigration push is so tragically stupid and suicidal (if it persists). They're killing America's golden goose.
As an aside: I wish the "open borders" canard would die. We've never had open-borders immigration in recent history. Definitely not since 9/11. Not even under Biden. Border laws were enforced. Biden has the same apprehension rate at the border as both Trump and Obama.
First of all, the only group of immigrants targeted by the admin are those critical of certain middle eastern regime.
Republican racists mainly care about the immigrants that do not take their middle-class jobs anyways.
Anti-Indian hate is restricted to a minority of software engineers and anti-Chinese hate is virtually non-existent.
I do believe it is idiotic to have your universities full of Chinese, your manufacturing in China and, at the same time, treat China as a geopolitical enemy.
cz if you're smart & pragmatic - then you will know innovation can come from anywhere - but western elites choose to continually bury their heads in the sand.
China can certainly design an inflatable barbecue. China can certainly biuld an inlfatable barbecue. But will the chinese people ever want and buy an inflatable barbecue? ... never. That is why the US will remain the premier consumer economy.
And yet BYD is likely to outsell Ford worldwide this year (despite being banned in the US)
https://en.wikipedia.org/wiki/List_of_automotive_manufacture...
I have some exposure to utility regulation and from what I can tell some of the AI companies are "good actors" and willing to shoulder some of the burden. But others are pretty adversarial and want a free lunch.
Not long ago we were crying death to bitcoin, it’s going to destroy the planet.
Come AI, with unlimited power demand. Everybody screaming we need more power.
We need infrastructure, clean energy, even nuclear. We are doing all in the wrong order.
For context, EU added 65 and US 43.
In one year, China _added_ almost the total capacity EU has.
China is the one place where AI actually can use clean energy…
- 70% nuclear
- 26% renewables
- 4% gas/coal
The future is blatantly going to be electric. Between cars, heat pumps, ranges, etc, the quantity of kilowatt hours consumed will rise dramatically per capita because they are replacing burned fossil fuels.
We don't need to subsidize the trillion dollar companies, we can settle for just not cancelling wind and solar projects, and generally updating the grid infrastructure.
A rising tide lifts all boats. If the subsidies go to common infrastructure, that's good for everyone. There's no need to complain about a road being paved because it will benefit FedEx in addition to everyone else.
Tell it to the guy doing just that, as much as possible.
Now in Iran, the intention was to repeat Venezuela and effect regime change in a hostile country, bolstering America's military status.
Whether these wars have the effect they intend is beside the point; you're asking why they were fought, not whether they resulted in "Mission Accomplished".
What? No it isn't.
There are many places the government could use to appropriate funds, not just social services. The military, for example. Other subsidies. Tax credits. Simply increasing the debt.
Their cost of energy is what matters vs the US as much as speed buildout.
Is there actually a huge Chinese consumer market for these products? If not then I'm not sure how you ever actually achieve this endpoint. Chinese wages and American wages are not nearly the same thing yet.
> It will simply be absolutely cheaper (including profit margin) to serve tokens in China.
It will simply create more pollution and environmental destruction too.
> China is building for the future
That's the plan. Whether that's true requires an honest analysis.
> while Western Democracies are afraid of the future
Developed nations take fewer risks than undeveloped ones. Do you assume this pitched dichotomy will naturally sustain itself?
> and of their own shadow.
Yea, it's funny what having open and fair elections can do for a country.
Where do we start...
You completely walked past the argument to pick at a meaningless nit.
Maybe I picked like 4 meaningless nits as in: US politicians respect so much democracy that they constantly reweight "one person, one vote" to suit the interest of the incumbent, they do not have their outrageously expensive campaigns financed (legally) by private interest groups, the popular vote is represented, and elections are uncontested (unless the wrong candidate wins, where the Supreme Court promptly fixes the issue), and it has room for more than two (quite similar I may say) viewpoints in representation.
Maybe.
But please don't call “Yea, it's funny what having open and fair elections can do for a country.” an argument.
Which, again, you've managed to completely ignore.
The argument, ironically in black and white, so you can sense it, "this isn't a black and white scenario and seeing it as China vs USA blinds you to the complex differences and global geopolitical forces involved."
I get that you don't personally like America, for whatever reason, but you've blinded yourself to sense in your rush to convey your rather negative and absolutely common sensibilities.
(The USA, I am fine with the continent of America).
And it's for a reason: I am from one of those countries where US-american meddling buttressed a dictatorship that caused hundreds of thousands of deaths.
Trillions of Dollars being invested against AI infra would indicate otherwise. US is in fact betting a lot of its economic future on AI.
BTW form my benchmarking, open weigh models are good enough for many agentic tasks starting with Qwen 3.5/6 family and Deepseek v4 family, so it's likely we'll see displacement of api usage from the premium priced providers. Yes trainingis expensive, this isn't training
Meanwhile, the USA is paying for its past excesses, with interest on its debt being the number two most expensive line item in the budget.
https://fiscaldata.treasury.gov/americas-finance-guide/feder...
Article in Fortune: https://archive.is/53Vu0
Sure, taking out the Tunisian pirates was a good thing for most of the world, but it's a bad precedent...
The formerly "fiscal conservatives" that I know are working overtime explaining how the debt isn't a bad thing and we can just move numbers.
Sounds like they're just catching up to what Democrats always used to say whenever a Democrat was in the White House and some Republican would complain about the national debt. "A government isn't a household, debt doesn't work the same way, you don't get it."
You might say that US would prefer sovereignty but that's a separate argument vis-a-vis strategic competition with China in particular.
Yes, countries where compromise is not required, where social, capital and human costs are non-factors and where regulations are bendable at will by who's in power can be more effective at achieving some goals.
Don't follow AI close, but I remember DeepSeek being a "much cheaper" to deploy model for close performance.
Not that, there's a cool new frontier to explore.
But that its a great opportunity to subsidise an industry and watch their slower fatter competitor go bankrupt trying to keep up.
>But the US did it first
What is sputnik.
who are the decision makers in china?
Who are the decision makers in western democracies?
I'm being slightly facetious - there are many answers to these questions.
The one that actually matters to me though is "do the people that are making the decisions do so in the interests of society?" Not in my 'democracy', that's for sure.
Well, yeah. This is a technology that has the potential to make large chunks of the population unemployed.
Chunks of the population that took on debts prior to late 2022 with the understanding that there would be a way to pay those debts back with their labor.
I’m calling it now, the future is indentured servitude.
https://www.wired.com/story/super-pac-backed-by-openai-and-p...
"Build American AI, a nonprofit linked to a super PAC bankrolled by executives at OpenAI and Andreessen Horowitz, is funding a campaign to spread pro-AI messaging and stoke fears about China."
In reality Xi has warned of AI bubbles. If China was really pushing it they'd be equal or ahead because so many researchers are Chinese anyway. Instead, China is building real stuff instead of focusing on hot air like a16z ("crypto", "AI", you name it). Maybe China should sponsor that PAC to accelerate the demise of the West.
Blackwell is 10-20x more efficient than H200. Vera Rubin is expected to be several times more efficient than Blackwell.
The US has way more compute installed in Gigawatts because China can’t get enough chips. https://epoch.ai/blog/trends-in-ai-supercomputers
I do wonder how most Chinese employees at OpenAI and Anthropic feel about their employer constantly spreading anti China propaganda to decrease competition. Perhaps money solves almost all things so they go along with it.
Selling under price to capture market was American playbook for last 20 or more years.
They wanted the division, they're getting it and one side is raping and pillaging the masses.
We have exported production to China in many things, we forget that we had dark satanic mills of our own.