The AI Race, Starship and Silicon Valley's Defense Bet

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Bloomberg Tech 45 min 12 speakers 8 chapters transcribed 5 days ago
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David Weston 0:00
Hi, I'm David Weston. Join me every week for the Wall Street Week Podcast to hear stories of capitalism from around the world. From geopolitical tensions and central bank decisions to artificial intelligence, energy, and infrastructure, we sit down with the CEOs, economists, policymakers, and thought leaders whose decisions are shaping markets everywhere we find them. Subscribe to the Wall Street Week Podcast on Apple, Spotify. Five or anywhere you listen.
Bloomberg Audio Studios 0:32
Bloomberg Audio Studios, podcasts, radio, news.
Bloomberg Audio Studios 0:43
Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.
Ed Ludlow 0:52
This is Bloomberg Tech coming up. China's latest AI breakthrough shaking up the industry.

What does Moonshot’s Kimi K3 model mean for the AI race with OpenAI, Anthropic, and the chipmakers?

Ed Ludlow 0:57
What Moonshot's Kimi K3 means for the race with OpenAI, Anthropic, and the chipmakers powering it. Plus, SpaceX gears up for a second attempt at a Starship test flight later this week. The stocks underperforming most of the other big Nasdaq IPOs. And Andreessen Horowitz signed defense investor and military vet Connor Love to the firm's. American dynamism team. Love joins the show. Good morning from San Francisco. The surprise release of Kimmy K3 from China's Moonshot. It's still everything that people are talking about, reading about. We are rebounding in technology stocks. Modestly, we're off session highs where we opened earlier. Remember, chip stocks entered a bear market Friday, in part. Because of all of the questions posed by what Kimmy K3, a 2.8 trillion parameter model, represents.
Ed Ludlow 1:49
Some of those were like, well, if we have more efficient AI, do we need to spend as much on compute? NVIDIA is an example of a name that's rebounding. A lot of focus has also shifted to the intense memory requirements for what is happening in open weighted models. Moonshop's gone from AI. Upstart to global contender almost overnight. Kimmy K3 drawing praise for rivaling the best models from OpenAI and Anthropic, but demand has been so strong that the company says it's temporarily limiting new subscriptions as it adds to work, uh works to add more capacity. Uh Bloomberg's executive editor for Asia Tech, Peter Elstrom's with us from DC. Um, there are so many reports on the on the Bloomberg this morning.
Ed Ludlow 2:32
Morning, so many places we could start.

How is China’s AI landscape catching up to the United States and what are the key competitors?

Ed Ludlow 2:35
But I want to go to to one of the pieces that the team did about okay, it's Monday morning. We probably went into the weekend thinking, Oh no, we don't need to spend as much on compute hardware in that context. Now we have a piece on the Bloomberg saying this puts a lot of emphasis on memory. What's the team in Asia writing about?
Peter Elstrom 2:55
Well, yeah, let's let's broaden out the lens a little bit here. Uh what's going on is uh China is holding this World AI conference in Shanghai, and we're seeing their companies come forward with new offerings in all sorts of different areas. Moonshot is certainly the one that got the most uh attention uh over the weekend. Uh we saw this company that was probably not that well known outside of China, if at all, um, and all of a sudden people are paying Attention to it as you mentioned, its performance is very close to the frontier models. 2.8 trillion parameters. Uh essentially, you know, the the the the synapses of this um, the brain synapses of this model are very significant. But also you saw Alibaba come out with a new uh version of their Gwen model that is very close behind.
Peter Elstrom 3:38
It's 2.4 trillion parameters. It's a very powerful model too. So I think the big lesson, the big takeaway here that it China AI is much closer behind the U.S. in terms of AI capabilities than we really realized. If you thought uh China was six to twelve months behind before, now it looks like maybe they're only a couple of months behind uh and they're catching up quite quickly. And it's a broader selection of competitors than we really anticipated. People who have been focusing mostly on Deep Seek in particular, maybe a little bit on Alibaba, and then a couple of the smaller models. Now we're seeing companies like Moonshot come forward and they're very competitive and a lot of people didn't even realize that they were gonna be in this race.

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