Luke Vargas

But when we come back, how that's all going over with America's tech giants.

Stick around.

Now, Tatia, in addition to these Chinese AI companies potentially opening up new markets for themselves, it sounds like they may be chipping away at the pricing power big U.S.

tech firms have been commanding.

And if I understand this correctly, this is not just some philosophical debate about whose vision of the science fiction future is correct.

The difference between the Chinese and U.S.

private sector focus here maybe boils down to who the customers of AI will be, who might be paying for AI services in the future.

Is that right, Tatia?

I'm envisioning here, I don't know, the Egyptian government wanting to model the Nile River and how it would respond to, let's say, a bad harvest.

Is that kind of what we're talking about here with world models, something with a sovereign AI potential use case?

Josh, lots of advantages here for this Chinese approach.

What are the major challenges to it that you're hearing about?

Though that edge in chips, I don't know, could it be a double edged sword?

It's really dependent on chip performance, especially those highest end U.S.

chips continuing to just achieve bigger and bigger gains over their Chinese counterparts.

But if that were to sort of plateau or top out, that's a risk for Silicon Valley.

Yeah, Josh, just jumping in, a recent Morgan Stanley report that tried to assess who could win this AI race gave credit to China and maybe an edge overall, citing its state resources, its ability to scale.

But for the U.S., as you mentioned there, not just higher salaries that help boost the talent pool, but

specifically private sector money that can come in off the sidelines.

Tatia, we haven't spoken about it yet, but probably a big X factor in all of this is what Washington ends up doing.