You really think China doesn't have massive amounts of capital expenditure related to AI? They're actively bootstrapping an entire chip industry.... https://www.reuters.com/world/china/china-prepares-295-billi...
You really think China doesn't have massive amounts of capital expenditure related to AI? They're actively bootstrapping an entire chip industry.... https://www.reuters.com/world/china/china-prepares-295-billi...
Relatives vs absolutes. America will spend $500B and because of leaky pipes that's effectively 100B going directly to what's needed. China gets a lot of bang for their buck so even if they're spending a fraction of the US, they make it worth their money.
That's true for domestic labor and manufacturing, like shipbuilding, but the bleeding edge chips only come from one place and the US labs get the best while Chinese labs do not (unless they smuggle them). China gets creative, sure, but it can't overcome the fundamental issue that the US labs have more magic rocks that do math faster than their magic rocks. And the current state of the art is to just "do more math".
Nvidia GPUs aren't even the absolute SOTA for LLM inference anymore. Some labs are moving to ASICs and Huawei already have their own custom chips running DeepSeek as we speak.
There's enough money and scale on the line that software affinity like CUDA is no longer the deciding factor and there's margin for custom stacks.
Even more so after the USA GPU exports ban which is proving to have backfired by speeding up China's tech growth.
Definitely hasn’t backfired. Exporting would have just sped up their progress. Instead they had to get clever and lean into the bottleneck which for them, now, is compute efficiency. This is temporary and they’ll figure out competitive chip design and production but not for several more years. It’s incredibly hard to match the quality of NVidia and TSMC, as China has found throughout years of trying.
I’m worried if west gets to ahead the best thing for C is to destroy the factories to slow down the ai.
If west ai is too advanced can take over the world. So better go to war now on a same level playing field than later when you need to fight against a SGI
That is exactly the scenario that I believe and invest in. I peg trouble in Taiwan in the next 2 years at about 30%, which is waaaay higher than is priced into the market right now. If you think intel has gone up in price a lot now, it will absolutely skyrocket if TSMC fabs suddenly disappear. After adjusting to a domestic fab pipeline, we will have built up again an industry with a good talent pool (which we don't have now, Arizona TSMC fab needed to ship people in from Taiwan). At that point, why go back to a TSMC model? Hence we will have a booming domestic production pipeline, though still with complex international dependencies for various components.
Nope. If China were not banned from US-controlled chips, it would be importing chips at much higher prices, therefore getting less bang for its buck while strengthening competitors with its money in the process.
Instead, the US banned China from chips and lithography machines, giving China the legal excuse to start producing them domestically without violating WTO rules. Now China produces cheap chips and uses them with cheap electricity.
This was a dumb move by the US. Brought upon it by dumbf*ck aristocratic elites who grew up in isolated mansions and then received law degrees, with absolutely no understanding of technology and technology ecosystems. They thought they'd just make the rules and everybody would have to obey. It turns out in technology, they don't have to...
> Nope. If China were not banned from US-controlled chips, it would be importing chips at much higher prices, therefore getting less bang for its buck while strengthening competitors with its money in the process.
Nowhere near the value of having access to chips, at any cost. They have extremely deep pockets. They already pay 6x the cost per FLOP.
> Instead, the US banned China from chips and lithography machines, giving China the legal excuse to start producing them domestically without violating WTO rules. Now China produces cheap chips and uses them with cheap electricity.
You think without export restrictions China wouldn't be doing the exact same thing? China needs absolutely zero legal excuse. I mean sure they have compute available on grey market / domestically but at 6x the cost per FLOP. Access to NVIDIA chips would make it dramatically cheaper for them. Yes you get chip income but that is not even close to what you lose. The strategy is doing what it was always supposed to do: slow them down, bleed their resources to force them to spin their wheels catching up. China is doing a great job with this but they are fundamentally constrained by these export controls.
You are right that this greases the wheels, they are further along than they would have been without export restrictions, but they are still delayed even with the reduced friction. The alternative is that they move slightly slower _while having the same compute infrastructure available_ and at dramatically lower energy costs. That is a far worse position for the US to be in.
> This was a dumb move by the US. Brought upon it by dumbf-ck aristocratic elites who grew up in isolated mansions and then received law degrees, with absolutely no understanding of technology and technology ecosystems. They thought they'd just make the rules and everybody would have to obey. It turns out in technology, they don't have to...
I think this is too cynical. Neither one of us is in the room to actually observe the real decision making, but export restrictions as a strategy are not some "dumbf-ck aristocratic elite" thing. They are perfectly rational from a strategic standpoint and arguably doing what they're supposed to do.
I believe China has leaky pipes as well.
China has a big corruption problem.
their putting a ton of money into things that will benefit AI work if they work, but chipmaking is important for other reasons too, so if AI (somehow? I doubt) doesn't give enough ROI chips can be used for other things
China’s chip industry is 7-10 years behind, and that is because they are desperate and have been throwing money at it. But technological progress requires more than just money.
Jensen said the Huawei Ascend 950 is roughly comparable to the NVidia H200[1]
The H200 was released Nov 2024.
Even allowing for Jensen exaggerating the risk there is no way China is 7-10 years behind.
Looking at manufacturing process nodes, SMIC N+3 is a a 5nm process. 5nm was introduced by Samsung and TSMC in 2020 so at most that is 6 years.
But the chips they can produce on it are roughly comparable to "roughly level with Android flagships from three years ago"[2]
TL;DR: China is more like 2-4 years behind than 7-10 years. If China developed EUV lithography then all bets are off.
[1] https://www.reddit.com/r/LocalLLaMA/comments/1kxw6b9/nvidia_... - see video.
[2] https://www.tomshardware.com/tech-industry/semiconductors/se...
2-4 years is enough to lock them out of the race.
The H200 is a more powerful H100, and the H100 is far from obsolete - for example it is what Musk's Colossus-1 data center, currently being rented to Anthropic, uses.
The only difference between using a slower chip such as H100 (or Huawei's Ascend 750) vs NVIDIA's newer Blackwell chips (B200 etc) is that you need more of the slower chips to achieve the same total FLOPs in your cluster. It has zero effect on what models you can run on it.
It's hard to understand: Do you think that having to use chips that were 20% less performant would lock China out of anything? Are you not aware that with the low costs they have, they can just stack ten times or more datacenters and run workloads in parallel to make up for that performance difference - even if there was actually one that high?
No? They are actively in the race, what are you talking about
By "the race" I mean "the frontier, and the race to superintelligence." They are categorically behind. The best they can do with the capacity they have is to distill US models, but that doesn't enable them to reach the scale needed to leapfrog the US in the race to superintelligence.
It isn't distillation that gave GLM 5.2 it's jump in performance.
To quote Pat Toulme:
There’s a big misconception about how GLM 5.2 was trained. Yes, they distilled Claude and GPT 5.5 — but distillation is not how they matched Opus quality. Distillation only fixed the cold start problem in RL.
RLing an agentic coding model isn’t rocket science. In simplified terms:
1. RL needs trajectories — rollouts where the model actually completed a task in some env
2. No successful trajectory on a task = zero gradient = you can’t RL it. This is the cold start problem
3. Distillation solves it. You seed your model with knowledge from a smarter one (Claude, GPT) on tasks it can’t do yet
4. Now it produces positive trajectories on those tasks
5. RL on those trajectories and hill climb agentic coding
6. At that point you no longer need to distill and can solely hill climb RL to better models
This is an interesting curve. I’d argue it’s harder to get to Opus 4.8 from scratch than to go from Opus 4.8 → Fable/Mythos tier.
GLM 5.2 is already producing positive trajectories, so they have plenty to RL on — they’ll keep climbing to Mythos quality without distilling any further. They no longer need American models.
https://x.com/PatrickToulme/status/2069211575437627743
Not exactly sure what the finish line in "the race to superintelligence" looks like and even moreso it's unclear why you think being there first is a critical benefit.
Yes but in an equilibrium steady state, compute and data advantages are all you need to first order. China does not yet have a compute advantage. RL is indeed the magic sauce for coding agents but the bottleneck for how much progress you can make, for both the US and China, is compute. The US at least for the next few years has a clear advantage here.
So, China is in the race. Just not leading yet
Exactly -- the hope for US strategy is that you can slow them down a lot but not forever. That slowing them down is in itself enough to keep a strategic advantage over them both in terms of economic growth and offensive capabilities both in terms of cyber attacks, intelligence and things like drones, etc.