adventured

Four more 2nm (or below) fabs in Arizona. That's bleeding-edge or very close to it.

China won in desktop PCs? Nope.

China won in cloud services? Nope, not even close. They had to clone AWS just to try to keep up.

China won in mobile? Nope. Although they're very competitive there.

China won in search? Nope. Baidu who?

China won in ecommerce? Nope. Their dominance is overwhelmingly domestic.

China won in software? Nope. Windows is US. Android is US. iOS is US. MacOS is US. Linux is US/Europe/Global. Look at the top 50 largest software companies.

China won in silicon? Nope. Look at the top 50 companies.

China won in .... India and Latin America can manufacture iPhones now.

But sure, China's the obvious winner this time. Good luck.

You mean other than the zillion dollars of infrastructure you need to run these systems for a billion users. And the extreme cost to sustain that operation day to day. And the cost to upgrade the infrastructure forever.

Remind me which entities (govt or corporate) are going to subsidize that forever. Remind me which entities are going to front the cost just to scale up.

By that premise - wherein you forget everything other than the first ingredient (the model) - Google has no moat either (got $100 billion dollars lying around?). Nor does Uber (have tens of billions in your bank account to clone their business?).

I'm certain building an app (Uber), or building a search engine (Google), is the super duper hard part.

Slapping a GUI on Linux will kill Windows, any day now.

China isn't undercutting anything. Kimi has to be hosted somewhere and is extraordinarily expensive to operate at Fable-levels of capabilities. The moat is (and will always be) the cost to actually operate these models, and that cost will continue to soar, it will not reverse, and the hardware will never keep up such that at-home use somehow becomes economical.

It's like releasing a cutting edge search engine, proclaimed to be on par with Google. Oh yeah, I forgot to mention, you need to actually run it somewhere. One of the core moats for Google has been the cost to scale and compete globally with a search engine, which only a few entities on earth could even attempt. Somehow the HN crowd forgets this every single time. The same claims were endlessly made regarding Uber, as though the app was the hardest part of competing with Uber. Here's a hint: the model isn't the only super hard part of the total process at this point. Try running something akin to GPT 5.6 for a billion users, see how much that costs.

The winners will be the owners of the subscriptions and API usage. That's going to be OpenAI and Anthropic as of now, possibly Google will stay in the fight with their scale advantage focused on the consumer. It will never be the open weight models out of China. Who is going to invest the trillion dollars into infrastructure needed to run the latest version of Kimi 3-5 years out, for a billion users? There's only one entity that would ever consider it, and that's China domestic.

And the real money (for a sustainable business model allowing for constant massive reinvestment & infrastructure maintenance) is in pairing up advertising, which is another spot where the open weight models from China will never compete. It doesn't matter if the HN crowd hates this outcome, nothing will stop it from being the future core of mass consumer usage. And the business use will stay with subscription + API use as well: the best option for that today is OpenAI and Anthropic.

People endlessly claimed the same thing about DeepSeek upon its release. they claim it every single time a very large cutting edge model is released out of China. It's a combination of propaganda, some truth, and the faux open culture desperation to see big tech get destroyed (somehow better if big China takes its place instead).

I'm pretty sure the Chinese cloning isn't being arrived at for free regardless. Fable is quite expensive for example.

If Anthropic has a real problem with API use, they can always raise the price.

Because no VC will give you $5-$10 billion in cash to attempt a catch-up run with Anthropic, OpenAI, and Gemini at this point. Untold billions have been pushed into Grok and it can't keep up. X has had the GPUs, the engineers (reasonably), the cash and the datacenters necessary - it's a very, very, very hard task. Microsoft could afford spend $100 billion on trying to catch up and they might fail at it.

It's a critical national imperative for China. If they were to lose the AI race, it would be economically devastating over the coming decades. Their demonstrated capabilities in the open-weight space are making it fairly clear they are not going to fall behind at this juncture.

As a nation, if you don't have your own GPT equivalent, you will be beholden to a master (right now it's mainly either the US or China, pick one). The EU for example is putting their group of nations at risk in a big way by not going all in on having at least two cutting edge independent competing models (Mistal is not enough). Economically the EU is plenty large enough to accomplish that, nobody is driving the bus the right way.

Either Chinese labs are worth more or OpenAI/Anthropic are worth less. One of those is true

The reason that's not inherently accurate is because it assumes the economic models are identical. That couldn't be further from the truth. It'd be like pretending a globally dominate Google search engine should be worth as much as eg Baidu or Yandex. No doubt Baidu is an advanced search engine, and that's not what defines its economic characteristics: the markets it operates in does, the market ownership does, the ad engine does, the ability to sell does (advertiser relationships), etc.

OpenAI is very likely to bolt on a massive, global advertising platform to GPT over the coming years (and yes, it'll take time to build up). The Chinese labs will have a very hard time replicating that to a global audience the way the US tech companies have repeatedly proven they can. OpenAI will poach proven ad system builders from Meta and Google.

The same kind of speculation questioned whether Facebook would ever have a significant business. Before that, the same was asked about Google's business.

If GPT can maintain or grow usage, the ad dollars will be there given the enormous scale. There is a hundred billion dollars plus worth of advertising waiting in the LLM space. It would be surprising if Facebook doesn't contract for example, losing ground to LLMs on advertising over the coming decade.

They seem to be expanding even across rural America. These days it's fairly common for small and medium size towns to have access to 500mbps-1gbps for $50-$90 per month, and essentially all small cities and above.

Reddit is overflowing with threads where people are getting AT&T to give them 1gbps for $30-$35 per month. Comcast has repeatedly offered me 1gbps for ~$50/m for five years locked-in. I have no practical use for it.

The US has more broadband than it knows what to do with at this point. Somebody needs to figure out a mass public use for home 1gbps+.

I assume you're not confused about the fact that DeepSeek winning would be against US self-interest, and the thriving of OpenAI + Anthropic domestically and globally is very much in the national interest of the US.

Even if both groups did exactly the same thing, it would be irrational for the US to not bias itself in favor of its own businesses.

The abundant supermarkets were not a product of free markets, they were a propaganda piece.

The US has abundant supermarkets to this day. It was overwhelmingly a product of the market economy and remains so. The US has between 45,000 and 75,000 supermarkets (75,000 if you include supercenter stores that also sell groceries). That's not counting smaller specialty food stores.

It's a product of consumer spending capacity (net disposable income), of which the US has an enormous amount and has for over a century relative to other nations.

Eat fewer calories. Consume as little added sugar as possible.

You don't have to eat much better. You can trivially supplement. It's far more important to eat less.

It's not the exchange rate. It's 30 years of economic destruction and currency devaluation as the end result of horrific spending policies. If Japan doesn't right the ship, they'll sink into middle income territory over the next 30 years. Poland and Greece are now just slightly below them in GDP per capita - and Lithuania is above them (unthinkable circa the mid 1990s).

Realistically Japan is very close to being a second tier economy. It's quite plausible that Croatia and Latvia will pass them on GDP per capita over the next decade. 7-11 Japan would be relatively inexpensive for the citizens of any affluent nation, because Japan is so much poorer than it used to be.

The world has never been thankful for the positive things the US has done. The only thing it ever garnered were the briefest of superficial nods. China gets drastically more respect with their approach than the US ever has, while doing a tiny fraction of the good.

The US saved tens of millions of Russians from starvation a century ago. Culturally they have absolutely no clue about that, they're entirely oblivious in terms of their own history. The good deeds never garnered the US any positive credit. Only the bad deeds garner the US bad credit aplenty.

Cloudflare operates as an at-cost registrar. They charge wholesale prices for domains.

What cut are you talking about?

An estimated 22,000 addresses, 1.1 million Bitcoin. Present value $78 billion. That would make him the 23rd richest person in the world. Bill Gates by comparison is 'only' worth $102 billion these days.

If you priced Gates backwards in gold, his $102 billion is about $13 billion two decades ago. He hasn't kept ahead of the destruction of the dollar very well.

Not just yet, they should wait for a little bit. The US isn't done depleting its inventory yet, the US might get itself in a lot deeper yet, and the US population will only detest the war even more given time. All of those things will help China take Taiwan. If Iran gets ugly enough the US population will just have that much less willingness to get involved in another major conflict. 3-18 months for Taiwan (9-18 more likely; China still needs some prep). There's no scenario where China isn't going to successfully take the island after this. They now know the US isn't at all prepared to stand off with them in coastal Asia. It would take years of surge production to get ready, the US doesn't have years re Taiwan.

If China is going in, we'll start to see large signs of that. They'll begin a number of prominent campaigns, including sabotage, propaganda, extremely large supply movements, and so on.

Gemini, GPT and Claude will all have ads on the consumer side. They will go together in quasi lock-step into the ad future, because that money is gigantic and they're going to need it.

The masses will have no say in the matter. Just as they had no say in the matter with Google's ads getting ever more intrusive, or cable prices previously, or streaming prices going perpetually higher in the present, or YouTube ads, or anything else. Consumers will have no say in the matter, they'll take it and that's that.

With only three relevant competitors (maybe Mistral in Europe), there will be nowhere to flee the deployment of ads.

For several early years search was thought to have no great business model (banner ads and similar). And then it did.

GoTo.com -> Google -> $$$

AWS is legitimately a giant and it should be considered in enterprise broadly. It's infrastructure more than enterprise software of course, which is where Anthropic is at. Anthropic is not trying to host the world's databases and services (at present anyway). Anthropic will however help you write software to compete with Salesforce, Oracle, SAP, et al.

Google's ad business remains far larger and more profitable than AWS. And the advertising segment is drastically larger than the segment AWS is in. Just Google + Meta = nearing $600 billion in ad sales. Amazon will soon have their own $100 billion in ad sales.

LLM usage will largely replace traditional search, and that's stage one. To be specific, search will be consumed by the LLMs, it'll be merely an aspect of what they do for the user, and that'll include handling the more intricate details of the search, refining the search, understanding the results of search, etc. The age of the typical user handling any of that is about to end. Search will more be a feature of Gemini in the not very distant future, rather than Gemini being bolted onto/into search.

Fuller integration into the user's life will bring ever more ad opportunities (and it doesn't matter if the HN base hates that notion, it's going to happen regardless). That'll happen over the next decade gradually.

Shopping, home management, tasks (taxes, accounting, lifestyle, reminders, homework, work work, 800 other things), travel (obvious), advice & general conversation (already there), search (being consumed now), gaming (next 3-5 years to start), full at-work integration (gradual spread across all industries, with more narrow expertise), digital world building (10-15+ years out for mass user adoption). And on the list goes. It's pretty much anything the user can or does touch in life.

The LLM usage will generate hundreds of billions of dollars in ad revenue, which will be wildly lucrative in terms of margins (not as good as Google search used to be). If GPT is a leader in that, they'll take a sizable share of that pot.

There's a lot more money in being Google -> consumer ads, or Amazon -> consumer ads, or Meta -> consumer ads, than there is in being Anthropic -> enterprise.

Just take a look at the enterprise. Amazon's ad business alone is already a better business than Oracle or SAP or Salesforce, with superior margins, and it's growing faster too.

And of course everybody knows the Google & Meta ad monsters.

The only question remaining is who is going to extract all those LLM ad dollars, how will that break out. Right now it's Gemini and GPT in the obvious lead, with Anthropic in third, and Meta & Grok nowhere to be found (permanent situation for those).

Their ~$50 million total Alibaba investment turned into ~$70 billion. As of two years ago they were still liquidating out of it.

January 26, 2024 - "Japanese investment holding firm SoftBank Group Corp has largely cleared its ownership in e-commerce giant Alibaba Group Holding, concluding one of the most successful deals in China's internet industry and a holding that spanned about 23 years."

"SoftBank, which invested US$20 million into Alibaba when it was still a start-up in 2000, said in a corporate filing on Thursday that it was set to book a gain of 1.26 trillion yen (US$8.5 billion) - about 425 times the value of its initial outlay - for the Tokyo-based firm's 2024 financial year after divesting its [remaining] shares via subsidiary Skybridge."

https://finance.yahoo.com/news/japans-softbank-concludes-run...

The deep state is any agent of meaningful power/influence that works for the government or is very closely entangled with the government, and that retains some or all of their power/influence from one admin to the next.

That includes for example powerful figures in the Pentagon or intelligence agencies that remain from one admin to the next. These people all have agendas of their own, and they network as people do. Dick Cheney was a deep state figure across a couple of decades, often working in the shadows. So was Rumsfeld. So was Kissinger across a few decades during his prime power/influence years. They all had long-term agendas, their ideas about the world, and extremely deep connections throughout the Federal Government.

It's not a mysterious conspiracy. It's just people with power/influence pursuing outcomes that they'd like to see happen, and working with other like-minded people to get there.

If they move on correcting that properly of course. We'll see what they do.

The US requires an exceptional surge in manufacturing output for ammo.

Iran has been a target since long before 9/11.

Look up General Wesley Clark's seven countries in five years YouTube video. This was the plan all along, Trump has nothing fundamental to do with it, he was just willing to pull the trigger.

Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and lastly Iran

They saw the opportunity with Iran weakened, their proxies were knocked down, and Israel was fully mobilized.

The single most interesting thing that will come out of the Iran war, is it's giving the go-ahead signal for China. I don't mean morally specifically, I mean practically: China is plainly seeing the US can't sustain a long campaign what-so-ever. The US has burned through ~850 Tomahawks in weeks, 20-25% of its stock. Again an opponent that wasn't that hard to knock down in terms of air to ground / ground to air, and strategic targets.

While the US can demolish high value targets all day long (assuming it can find them), it won't be able to sustain volume. And this is against a dramatically outmatched opponent (in terms of air + navy + intel, not boots on the ground).

China will build a hundred cruise missiles per day and truck them in from factories far away from the coast. The US can build 10-20. China's cruise missiles won't be as good, and they won't need to be. And that's the absolute least of what China will hyper produce in a mobilization to a war manufacturing stance. The US should just wave the flag before the first shots are fired re Taiwan given what we're seeing in Iran, it's over before it ever begins.

The US can't control the Straight of Hormuz properly, without taking losses (which it clearly doesn't want to do). That's a trivial task compared to trying to keep China from controlling the waters near Taiwan. The US won't be able to even get close to Taiwan is what this is demonstrating. China can stand-off the US easily.

The US is showing China and the world that it has zero chance at stopping a takeover of Taiwan.

China should be looking at this Iran mess and moving as fast as it can to launch their invasion. The US isn't ready, and won't be.

The US could put up a big fight at a full war mobilization, given some time to spin up. That scenario will not occur with regard to Taiwan. China has the green light.

---

edit:

There was a story about the early days of the invasion into Iraq by the US, after 9/11. It was about the US soldiers rolling into Iraqi towns, cities. They thought the US soldiers were maybe superhuman, or at least had extraordinarily advanced technology. An Iraqi boy wondered if the US soldiers could see through buildings with their helmets and goggles. After all they dispatched Saddam from power so quickly, seemingly so easily - one can understand the wonder.

Then they figured out the US soldiers were just meatbags like any other soldiers. That IEDs killed them just the same, and sniper rounds, and so on.

One of the very large benefits to rarely using your capabilities as a military superpower, is so that your enemies are unsure of just what you're capable of if pushed. And if you're lucky enough to put on a staggering outcome - as in the first Gulf War - in which Russia got to see their hardware decimated by vastly superior US weapons, then you should rest on that perception as long as possible. Iraq and Afghanistan substantially weakened the perception of US military domination (just a Vietnam did before that, for a generation). Iran doesn't show the US to be weak per se, rather, it shows the limits of its present endurance capabilities among other things. And that's what China needs to know.

And of course this happens to major powers from time to time throughout history. Russia goes into Ukraine and gets humiliated, its capabilities at the point of launching that war, were revealed to be embarrassingly mediocre compared to what was thought to exist. Or the USSR and Afghanistan before that.

They've all avoided loading up their LLMs with ads to this point. That is going to change dramatically over the next 2-3 years. All of them will be loaded with ads, and Google will partake as expected given their ad network & capabilities in that realm. They'll match GPT's ad roll-out.

LLMs haven't remotely begun to be integrated into the lives of the typical person. Not even close. The typical person is using LLMs not at all as it pertains to their daily life tasks. They're using them almost entirely for limited discussion matters (eg having a discussion with GPT about a medical issue, or a work related matter).

This is the first or second inning in the LLM rollout. It'll take 15-20 more years for full integration of AI agents into the life of the typical person.

The claw experiments for example can just barely be considered alpha stage. They're early AI garbage unfit for the average person to utilize safely. That new world hasn't gotten near the typical person yet.

The compute requirements to get to full integration of AI agents into the life of the average person - billions of them - is far beyond 10x where we're at now.