The entire AI industry got tossed on its fucking
head this week. A Chinese company released a
new AI model this week and it appears to be as
powerful as anything the US AI industry has come
up with so far and they've done it at a small
fraction of the computing and, more importantly,
the energy cost. This sent AI related stocks,
most specifically Nvidia and a couple of energy
stocks, just crashing on Monday. This happened
just after the Trump administration announced
Project Stargate, which is a $500 billion joint
venture, to build a whole bunch of AI infrastructure
that now they're starting to figure out they
may not need. My question is, is this the greatest
troll of the American tech industry by China
ever? Or what do we make of not only the timing,
but what this could mean with how efficient this
AI model is supposed to be. Well, I will also
say that. They were also able to supposedly there's
a lot of question behind this, but supposedly
they were able to develop this in like the course
of I want to say like two months or something
like in insane like span of time. Yeah. And then
also a lot cheaper than. They know a lot of the
American OpenAI or Meta or anybody who's working
on it. Yeah. Yeah. Which honestly like kind of
makes sense because like as soon as one person
kind of paves the way like others are going to
find like cheaper ways to do it. But and the
other reason I think that everybody kind of got
caught off guard is so that the H100 chip that
Nvidia makes, which is why their stock has been
skyrocketing the last couple of years, is a primary
driver behind especially chat GPT and open eyes
work. Those are export controlled to China. So
China's not supposed to have those. Now we're
going to come back to that portion of the topic
later. But supposedly that the big thing is they're
saying, hey, look, you guys export control this.
We found a way to do it without it. Right. The
other interesting thing is they didn't just release
it. They put it under MIT's open license. Yeah.
And said, everybody has access to the source
code. You can do whatever you want with it. Right.
which is huge. So they made it open source. They
gave all the code away for free. Yep. And they
were like, come at us, bro. Right. And they published
a big technical document outlining how they did
it. Obviously, Nvidia stock went way, way down.
As of right now, it's recovered a teeny, teeny
bit. But starting the week, it was at about one
hundred and fifty bucks a share. And it's down
to one twenty four. Oh, no. They lost. They lost
15 percent in market cap. So they at one point
had lost six hundred billion dollars this week.
OK, that's actually. Yeah, that hurts. They gave
it away for free. Straight. Yeah, free. And that's
honestly, that's what I love. I so I don't. Coming
from like the engineering point of view, I must
say you are engineer. Yeah, I think this is great.
I love open source stuff. When I was in college
for my engineering degree, I used open source
machine learning for my project. for my senior
design. I, whenever something is open source,
it kind of feels like, Hey, we are like, we're
not so much like worried about profits. Like
we're putting this technology out there to help,
like, advance the technology. If that kind of
makes sense. Yeah. Yeah. Like There could be
some conspiracy theories out there of like, oh,
they're trying to crash in a video. They're trying
to crash the US stock market overall, though,
as an engineer. So far of everything I've read
and watched, I'm like, this is a good thing,
like, because here's what's going to happen.
It's open source. So legit, every single US company
that's involved in the AI industry is going to
take their stuff. And in the next, I don't know,
two or three months going to start using their
research to advance their own A .I. like this
is going to move A .I. forward. Like, yes, it's
going to hurt stocks right now. But in like six
months from now, like you're going to see some
sort of leap in A .I. So I agree with you on
that. And again, the fact that it's open source
is is huge. Right. The thing that really interests
me in a couple of ways about this is this. One
of the big concerns about AI has been everything
that we've had up to now requires an immense
amount of power. Yes. All right. Immense amounts
of energy to make it function. What I like about
this, in theory, again, all of this grain of
salt, I think it's going to take months before
all this is run down. But in theory, this can
be run on a local server. without the the crazy
power demands, which, again, was concerning a
lot of people who were worried about climate
change and green energy and stuff like that,
where it's like crap. You need so much energy
to build this, you know, to do A .I. And now
they're going and these Chinese guys are going,
you really don't. Yeah. Like. If this is true,
if this is legit, real and not a Oh, God, I forgot
the girl who promised the world that they could
test for, like, every single disease in the world.
Oh, yeah, yeah, yeah, yeah, yeah. I know what
you're talking about. Elizabeth, what was the
name of her company? I don't remember. I don't
know. But like, if it's legit, like this is real,
like this is huge. I, you know, I'll just say
it. I'm an electrical engineer. I primarily focused
on power generation. It's not what I'm currently
doing, but. All my classes are around power generation.
No, this is huge like power. It's going to be
one of the it's like the largest. I would say
issue with electrical engineering right now is
how do you keep up with the? I don't know ever
increasing demand of power, you know. And so
the fact that, like, China was able to find a
way to do AI with less power is huge to me. I
love it. I'm like, hell, yeah, let's go. And
then, like, I read like 60 articles and it's
like how horrible this is. But I'm like, I don't
understand why it's bad. A lot of this, I think,
is a lot of a lot of CNBC, Wall Street Journal
trying to fluff up. Right. The the U .S. market.
Yeah. I got to imagine that that Monday morning,
you know, Sachin Adela and Mark Zucker, all these
guys were like, crap. Right. And I got to imagine
they had their engineering teams grabbing the
source code Monday morning going, you better
figure out if this is actually working, because
if it is, we're in, you know, necessity is the
mother of invention. And it looks like the Chinese
were like, hey, look, you you expert control
these chips. You you tried to screw us. But between
and the thing that I drew in my tick tock when
I made a tick tock about this the other day was.
Between the tick tock ban immediately being reversed
and everything that happened there and then this
immediately happening, it seems like every time
the U .S. is like, look at us, look at us. They're
like the Chinese right now are like. Double birds,
baby, we got you. And I don't think our leadership
is currently prepared for what's happening right
now. I don't think we have the political or social
will to deal with this. Adam Schiff was like,
this is our Sputnik moment. I was like, you know
what? You might be right. But if it is, we're
screwed. We are screwed. Because if this is our
Sputnik moment, we don't have the political leadership
and social leadership to meet the moment. Right.
You don't have a JFK in there going, we're going
to go to the moon by the end of the decade. You
just don't have it. So from a political point
of view, I do agree with you 100 percent. I do
agree with you. From an engineering point of
view. I would say like, yeah, hopefully it is
our spunk spunk Nick. Right. Like, do you think
we have? Actually, let me rephrase this a different
way. Let's presume for a moment that our engineering
talent is on par or maybe slightly better than
that of mainland China. Yeah. Do we have the
situation from a political and social standpoint?
I talk about the fact that, you know, we're in
a capitalist society and that changes how you
run business. Do we have the ability to put that
engineering talent to work in an efficient manner
where we can catch up if we are as far behind
as we may be. This is this is a little tricky.
Because honestly, like the the engineering side
of me wants to be like. essentially like fuck
our political leadership. It has nothing to do
with it because we're still going to pay these
people. We got to pay the engineers. You got
to get them to do the work. But however, I will
say, though, engineers. I'm trying to figure
out how to phrase this. I, so I used to be asked
like, Hey, is engineering hard? And I would say,
no, engineering is not hard. Anyone can be an
engineer like Alex. You could be an engineer.
Uh, your wife could be an engineer. Um, anyone
can be an engineer. The thing about engineers
though, is their dedication. So you have to put
everything aside. And you have to find a solution
period point blank. So There were there were
days where you essentially you have to say there's
a problem problem a whatever I'm not going to
go to sleep tonight until I solve it period and
With that you have to tell your friends like
hey, I can't I can't talk right now. I can't
hang out. I have to figure this out There were
many nights which. And again, you have to you
kind of make a trade off of like. You know, I
will do whatever it takes to solve this problem.
I. There were many nights where I had no sleep
and I stayed awake from chocolate chip cookies
and monster energy drinks. Keeping myself awake.
I went like two days with no sleep, literally
just trying to figure stuff out. And I think
like that, that's engineering is not hard, but
most people do not have the dedication to do
that. Most people want to go to college to party.
Most people will give up after a while. And honestly,
like my, my father like passed away while I was
in college. I took one day. Away from college
till I deal with that and then was like back
to college like you have to have that mindset
of like no matter what comes up. I do not care.
I do not care if the world's on fire. I don't
care if Elon Musk deploys a Death Star into outer
space. I am going to sit here. I'm going to figure
it out. I'm going to find a way and kind of tying
this back to your question Alex. That kind of
mindset and there's people that take it way more
like to the excrete to the extreme than I do
I don't consider myself like some sort of genius
You know person there's there's way like smarter
people than me. There's way more dedicated people
than me They would probably laugh and be like,
oh you went without sleep for two days That's
funny The thing about engineering is that you
will find people that will just They will stay
up and they will solve what like other people
will say is like a pointless problem just to
do it. So like Yes, it does suck it a hundred
percent. I agree with you It does suck that we
do not have the political leadership to back
us on this. However Engineering is going to proceed.
It's going to push forward You're going to have
companies and also just random engineers that
are going to just take on the task themselves.
They're not going to wait for the right moment
to kind of present itself. I hope you're right.
I have very little faith in us right now. That's
my thing. I have so little faith in us. I just
do. It sucks. But that's that's kind of where
we're at. Anyway, what do you all think? Is this
a big sea change? Is it the sea change we think
it's going to be? Does this change the whole
thing? What's going to be the next big troll
coming out of China? Because I think that this
is just their opening salvo. I think TikTok and
deep sea is just the this. Just the surface of
what they're about to hit us with. So let us
know what you think. down in the comments below.