Alice Han

even in the EU, are very worried about Chinese overcapacity. They will use trade measures to tariff or sanction Chinese goods. So they need to find alternative markets, both to re-export but also to export to. And another fun fact is that the Chinese trade surplus with the rest of the world has gone up to almost a trillion. As of last year, so $992 billion.

even in the EU, are very worried about Chinese overcapacity. They will use trade measures to tariff or sanction Chinese goods. So they need to find alternative markets, both to re-export but also to export to. And another fun fact is that the Chinese trade surplus with the rest of the world has gone up to almost a trillion. As of last year, so $992 billion.

even in the EU, are very worried about Chinese overcapacity. They will use trade measures to tariff or sanction Chinese goods. So they need to find alternative markets, both to re-export but also to export to. And another fun fact is that the Chinese trade surplus with the rest of the world has gone up to almost a trillion. As of last year, so $992 billion.

And I don't think that's going to stop anytime soon. It goes back to your question, Ed, about disinflation or deflation. China needs more exports, not less, because its internal domestic demand is so weak.

And I don't think that's going to stop anytime soon. It goes back to your question, Ed, about disinflation or deflation. China needs more exports, not less, because its internal domestic demand is so weak.

And I don't think that's going to stop anytime soon. It goes back to your question, Ed, about disinflation or deflation. China needs more exports, not less, because its internal domestic demand is so weak.

Yeah, I would broadly agree with that. I think Trump, even although his instinct is right to try to rebalance the trade deficit with China, he's using a hammer rather than a scalpel. So he's effectively going to a list of countries that he thinks that are running a surplus or US is running a deficit with those countries and trying to use tariffs to attack them. The same is the case with China.

Yeah, I would broadly agree with that. I think Trump, even although his instinct is right to try to rebalance the trade deficit with China, he's using a hammer rather than a scalpel. So he's effectively going to a list of countries that he thinks that are running a surplus or US is running a deficit with those countries and trying to use tariffs to attack them. The same is the case with China.

Yeah, I would broadly agree with that. I think Trump, even although his instinct is right to try to rebalance the trade deficit with China, he's using a hammer rather than a scalpel. So he's effectively going to a list of countries that he thinks that are running a surplus or US is running a deficit with those countries and trying to use tariffs to attack them. The same is the case with China.

What I think people have realized with DeepSeek, and it goes to people like Marc Andreessen and even clients that I advise, is that China has created an alternative ecosystem for the hardware and software. The stack is completely produced in China because of the tariffs and sanctions that have been put into place since the Trump administration.

What I think people have realized with DeepSeek, and it goes to people like Marc Andreessen and even clients that I advise, is that China has created an alternative ecosystem for the hardware and software. The stack is completely produced in China because of the tariffs and sanctions that have been put into place since the Trump administration.

What I think people have realized with DeepSeek, and it goes to people like Marc Andreessen and even clients that I advise, is that China has created an alternative ecosystem for the hardware and software. The stack is completely produced in China because of the tariffs and sanctions that have been put into place since the Trump administration.

And what was surprising about DeepSeek, not only was it 27 times cheaper, apparently the R1 model was 27 times cheaper, that open AI was the fact that they were able to produce this mainly internally, but also using low-end chips from the video.

And what was surprising about DeepSeek, not only was it 27 times cheaper, apparently the R1 model was 27 times cheaper, that open AI was the fact that they were able to produce this mainly internally, but also using low-end chips from the video.

And what was surprising about DeepSeek, not only was it 27 times cheaper, apparently the R1 model was 27 times cheaper, that open AI was the fact that they were able to produce this mainly internally, but also using low-end chips from the video.

The H20s that the Trump and Biden administration didn't think to impose export controls on, effectively allowed China to bootstrap their way to a competitive AI ecosystem and model. Alibaba has produced one recently that was also extremely competitive.

The H20s that the Trump and Biden administration didn't think to impose export controls on, effectively allowed China to bootstrap their way to a competitive AI ecosystem and model. Alibaba has produced one recently that was also extremely competitive.

The H20s that the Trump and Biden administration didn't think to impose export controls on, effectively allowed China to bootstrap their way to a competitive AI ecosystem and model. Alibaba has produced one recently that was also extremely competitive.

So this is a landscape in which the US, I don't think, is entirely prepared for because they thought that export controls, especially on hardware, would effectively kneecap China on AI. But there's been a bit of a wake-up call. I think it was right to call it a Sputnik moment.

So this is a landscape in which the US, I don't think, is entirely prepared for because they thought that export controls, especially on hardware, would effectively kneecap China on AI. But there's been a bit of a wake-up call. I think it was right to call it a Sputnik moment.