1 00:00:00,000 --> 00:00:06,800 Okay, so anyone listening to this has probably been digging into some pretty intense topics, 2 00:00:06,800 --> 00:00:10,400 like AI and US-China relations. 3 00:00:10,400 --> 00:00:11,400 Yeah, definitely. 4 00:00:11,400 --> 00:00:13,520 And we're really diving deep into all of that today. 5 00:00:13,520 --> 00:00:14,520 Absolutely. 6 00:00:14,520 --> 00:00:17,520 And to really kick things off, we're going to be focusing on this talk by Ben Norton. 7 00:00:17,520 --> 00:00:18,520 Right. 8 00:00:18,520 --> 00:00:23,560 That really kind of lays out this fascinating argument about how the US and China are approaching 9 00:00:23,560 --> 00:00:26,600 technology and specifically AI. 10 00:00:26,600 --> 00:00:31,480 And one of the things that Norton argues is that it boils down to this fundamental clash 11 00:00:31,480 --> 00:00:36,600 between the US, which seems to be kind of obsessed with monopolies, and China, which 12 00:00:36,600 --> 00:00:39,240 is much more focused on competition. 13 00:00:39,240 --> 00:00:44,200 And what's really fascinating is that Norton uses this Chinese AI company called Deepseek 14 00:00:44,200 --> 00:00:45,400 as a prime example. 15 00:00:45,400 --> 00:00:48,040 Yeah, Deepseek is like this amazing case study. 16 00:00:48,040 --> 00:00:52,480 They kind of came out of nowhere and totally shook Silicon Valley with this large language 17 00:00:52,480 --> 00:00:53,480 model they developed. 18 00:00:53,480 --> 00:00:54,480 Totally. 19 00:00:54,480 --> 00:00:57,360 They did outperform models from big names like OpenAI. 20 00:00:57,360 --> 00:00:58,360 I know. 21 00:00:58,360 --> 00:01:00,560 But they did it with way fewer resources. 22 00:01:00,560 --> 00:01:01,560 It's crazy, right? 23 00:01:01,560 --> 00:01:02,840 It's wild. 24 00:01:02,840 --> 00:01:05,280 And get this, they released it open source. 25 00:01:05,280 --> 00:01:06,280 What? 26 00:01:06,280 --> 00:01:08,440 Meaning anyone could use it. 27 00:01:08,440 --> 00:01:09,840 Oh, wow. 28 00:01:09,840 --> 00:01:11,800 Talk about a total power move. 29 00:01:11,800 --> 00:01:12,800 Right. 30 00:01:12,800 --> 00:01:16,320 It's like they flipped the script on how we think about innovation and competition and 31 00:01:16,320 --> 00:01:17,320 tech. 32 00:01:17,320 --> 00:01:18,320 Yeah, for sure. 33 00:01:18,320 --> 00:01:23,200 And to make things even wilder, Deepseek's app became a huge hit in the US. 34 00:01:23,200 --> 00:01:24,200 Yeah. 35 00:01:24,200 --> 00:01:27,240 And it's surpassing chat GPT in popularity. 36 00:01:27,240 --> 00:01:31,160 You could practically hear jaws hitting the floor in Silicon Valley. 37 00:01:31,160 --> 00:01:32,160 It's so true. 38 00:01:32,160 --> 00:01:34,520 It really challenged some deeply held assumptions. 39 00:01:34,520 --> 00:01:35,520 For sure. 40 00:01:35,520 --> 00:01:38,720 You know, we have to remember that the dominant mindset in Silicon Valley, especially among 41 00:01:38,720 --> 00:01:43,840 the tech elite, has always been that monopolies are the key to success. 42 00:01:43,840 --> 00:01:44,840 Yeah. 43 00:01:44,840 --> 00:01:48,880 Norton really highlights this through Peter Thiel, who's like this major figure in Silicon 44 00:01:48,880 --> 00:01:49,880 Valley. 45 00:01:49,880 --> 00:01:50,880 Yeah, one of the big ones. 46 00:01:50,880 --> 00:01:53,400 Who very famously said competition is for losers. 47 00:01:53,400 --> 00:01:54,400 I remember that. 48 00:01:54,400 --> 00:02:00,080 Thiel's whole perspective is that to truly succeed, you need to just dominate your market. 49 00:02:00,080 --> 00:02:01,080 Right. 50 00:02:01,080 --> 00:02:02,080 Become a monopoly. 51 00:02:02,080 --> 00:02:03,080 Become the only game in town. 52 00:02:03,080 --> 00:02:04,080 Yeah. 53 00:02:04,080 --> 00:02:06,080 And he's connected to some pretty influential people too. 54 00:02:06,080 --> 00:02:07,080 Oh, yeah. 55 00:02:07,080 --> 00:02:10,720 Like Donald Trump and JD Vance, just to name a couple. 56 00:02:10,720 --> 00:02:12,720 So this isn't just like some random idea. 57 00:02:12,720 --> 00:02:16,480 It's like deeply ingrained in how a lot of these tech giants operate. 58 00:02:16,480 --> 00:02:17,480 It seems like it. 59 00:02:17,480 --> 00:02:18,480 Yeah. 60 00:02:18,480 --> 00:02:22,280 Thiel's whole view is rooted in this concept of monopoly profits. 61 00:02:22,280 --> 00:02:23,280 Okay. 62 00:02:23,280 --> 00:02:30,800 When a company has a monopoly, they can basically control prices and make huge profits without 63 00:02:30,800 --> 00:02:32,240 any pressure to compete. 64 00:02:32,240 --> 00:02:34,520 They get to just call all the shots. 65 00:02:34,520 --> 00:02:35,520 Exactly. 66 00:02:35,520 --> 00:02:36,520 Wow. 67 00:02:36,520 --> 00:02:41,400 And Thiel literally believes that monopoly is the condition of every successful business. 68 00:02:41,400 --> 00:02:42,400 Wow. 69 00:02:42,400 --> 00:02:45,600 So it makes sense that he sees competition as like this big threat. 70 00:02:45,600 --> 00:02:46,600 Yeah. 71 00:02:46,600 --> 00:02:49,760 I mean, it's interesting though, because this whole monopoly mindset, it isn't limited 72 00:02:49,760 --> 00:02:50,960 to just Thiel. 73 00:02:50,960 --> 00:02:51,960 Right. 74 00:02:51,960 --> 00:02:56,800 And I've heard about that other tech giants like OpenAI, the company behind ChatGPT and 75 00:02:56,800 --> 00:03:01,800 Anthropic, have also been pretty vocal about wanting to restrict Chinese competition. 76 00:03:01,800 --> 00:03:04,720 So they also seem to be operating from a similar playbook. 77 00:03:04,720 --> 00:03:05,720 Yeah. 78 00:03:05,720 --> 00:03:09,520 Like they think maintaining their dominance means keeping potential rivals in check. 79 00:03:09,520 --> 00:03:10,520 Exactly. 80 00:03:10,520 --> 00:03:15,440 And this brings us to this like really fundamental question that runs throughout Norton's talk. 81 00:03:15,440 --> 00:03:21,280 Can competition actually coexist with capitalism or is monopoly like the inevitable outcome? 82 00:03:21,280 --> 00:03:22,280 It's a big one. 83 00:03:22,280 --> 00:03:23,280 It is a big one, right? 84 00:03:23,280 --> 00:03:27,440 It's a question that really gets to the heart of how we understand the relationship between 85 00:03:27,440 --> 00:03:29,440 economic systems and innovation. 86 00:03:29,440 --> 00:03:30,440 Right. 87 00:03:30,440 --> 00:03:36,600 It makes you wonder, is the US system with its focus on private sector innovation? 88 00:03:36,600 --> 00:03:41,440 Is it just inherently prone to creating these winner-take-all situations where monopolies 89 00:03:41,440 --> 00:03:43,440 become like the norm? 90 00:03:43,440 --> 00:03:45,400 It's a valid question. 91 00:03:45,400 --> 00:03:48,560 And it becomes even more interesting when you compare it with China's approach. 92 00:03:48,560 --> 00:03:49,560 Okay. 93 00:03:49,560 --> 00:03:54,960 It highlights how China, with its socialist system, takes this more state-guided approach. 94 00:03:54,960 --> 00:03:55,960 Interesting. 95 00:03:55,960 --> 00:03:57,320 It's not about like stifling competition. 96 00:03:57,320 --> 00:04:01,360 It's about fostering competition but within a framework set by the government. 97 00:04:01,360 --> 00:04:04,120 So it's competition but with like some guardrails? 98 00:04:04,120 --> 00:04:05,120 Exactly. 99 00:04:05,120 --> 00:04:10,720 They see strategic industries like AI as crucial for national development and they're willing 100 00:04:10,720 --> 00:04:13,880 to invest heavily to make sure they succeed. 101 00:04:13,880 --> 00:04:16,200 So it's almost like they're playing a different game entirely. 102 00:04:16,200 --> 00:04:17,200 Yeah. 103 00:04:17,200 --> 00:04:18,200 It's a different set of rules. 104 00:04:18,200 --> 00:04:24,360 So let's see how this could explain why the US reacted so strongly to DeepSeek's success. 105 00:04:24,360 --> 00:04:27,720 It wasn't just about like another tech company entering the market. 106 00:04:27,720 --> 00:04:28,720 Yeah. 107 00:04:28,720 --> 00:04:32,360 It was about a company operating with a completely different set of principles. 108 00:04:32,360 --> 00:04:33,360 And succeeding. 109 00:04:33,360 --> 00:04:34,360 And being successful. 110 00:04:34,360 --> 00:04:38,280 Which I'm guessing did not sit well with some folks in Silicon Valley? 111 00:04:38,280 --> 00:04:39,280 Probably not. 112 00:04:39,280 --> 00:04:40,520 And definitely not in Washington. 113 00:04:40,520 --> 00:04:41,520 Yeah. 114 00:04:41,520 --> 00:04:43,120 You're definitely picking up on a key point here. 115 00:04:43,120 --> 00:04:44,120 Okay. 116 00:04:44,120 --> 00:04:47,480 The US government's reaction to DeepSeek was swift and decisive. 117 00:04:47,480 --> 00:04:48,480 Uh huh. 118 00:04:48,480 --> 00:04:50,920 They basically labeled it a national security threat. 119 00:04:50,920 --> 00:04:52,000 Wow. 120 00:04:52,000 --> 00:04:55,560 And immediately started working to restrict its use and development. 121 00:04:55,560 --> 00:04:58,880 So on the surface that might seem like a reasonable response. 122 00:04:58,880 --> 00:04:59,880 Yeah. 123 00:04:59,880 --> 00:05:00,880 To a potential competitor. 124 00:05:00,880 --> 00:05:03,560 You'd think so but Norton kind of digs a little deeper. 125 00:05:03,560 --> 00:05:04,560 Things get pretty interesting. 126 00:05:04,560 --> 00:05:05,680 Okay. 127 00:05:05,680 --> 00:05:11,200 He points out the irony of open AI accusing DeepSeek of using its models. 128 00:05:11,200 --> 00:05:17,040 When open AI itself is known for basically scraping massive amounts of data from the 129 00:05:17,040 --> 00:05:21,560 internet without much regard for copyright or intellectual property. 130 00:05:21,560 --> 00:05:22,720 Oh wow. 131 00:05:22,720 --> 00:05:25,040 It's like the pot calling the kettle black. 132 00:05:25,040 --> 00:05:26,360 That's a perfect way to put it. 133 00:05:26,360 --> 00:05:31,480 It really underscores a crucial point that Norton makes about hypocrisy in this whole 134 00:05:31,480 --> 00:05:32,480 tech rivalry. 135 00:05:32,480 --> 00:05:33,480 Yeah. 136 00:05:33,480 --> 00:05:37,160 He also highlights how the revolving door between government positions and think tanks 137 00:05:37,160 --> 00:05:38,160 Oh interesting. 138 00:05:38,160 --> 00:05:40,640 Plays a role in shaping the narrative around China. 139 00:05:40,640 --> 00:05:41,640 Okay. 140 00:05:41,640 --> 00:05:44,400 He specifically mentions Melanie Hart from the Atlantic Council. 141 00:05:44,400 --> 00:05:45,400 Uh huh. 142 00:05:45,400 --> 00:05:47,960 And then there's also Mattis from the Jamestown Foundation. 143 00:05:47,960 --> 00:05:53,280 Both former government officials who now advocate for tougher stances against China. 144 00:05:53,280 --> 00:05:55,480 So it's almost like there's this whole ecosystem. 145 00:05:55,480 --> 00:05:56,480 Yeah. 146 00:05:56,480 --> 00:06:00,120 Built around maintaining US technological supremacy. 147 00:06:00,120 --> 00:06:01,120 Right. 148 00:06:01,120 --> 00:06:03,600 And they're not afraid to use any tool available. 149 00:06:03,600 --> 00:06:06,880 Whether it's accusations of intellectual property theft or framing it as a national 150 00:06:06,880 --> 00:06:07,880 security threat. 151 00:06:07,880 --> 00:06:08,880 Exactly. 152 00:06:08,880 --> 00:06:11,000 And it makes you wonder what's really driving the narrative. 153 00:06:11,000 --> 00:06:12,000 Yeah. 154 00:06:12,000 --> 00:06:14,880 Is it genuine concern about competition or something else entirely? 155 00:06:14,880 --> 00:06:17,360 Because remember Deep Seek's model was open source. 156 00:06:17,360 --> 00:06:18,360 Right. 157 00:06:18,360 --> 00:06:22,600 It wasn't about like hoarding technology and squeezing out profits. 158 00:06:22,600 --> 00:06:25,200 It was about making it freely available. 159 00:06:25,200 --> 00:06:29,680 It really challenges the whole capitalist assumption that innovation requires monopoly 160 00:06:29,680 --> 00:06:30,680 control. 161 00:06:30,680 --> 00:06:31,680 Yeah. 162 00:06:31,680 --> 00:06:32,680 It does. 163 00:06:32,680 --> 00:06:35,120 So if China is embracing competition within its own system, how do they actually make 164 00:06:35,120 --> 00:06:37,200 it work in practice? 165 00:06:37,200 --> 00:06:38,920 That's where things get really interesting. 166 00:06:38,920 --> 00:06:43,120 And where Norton brings in some economic theory to help us understand what's going on. 167 00:06:43,120 --> 00:06:44,120 Okay. 168 00:06:44,120 --> 00:06:45,800 So what's the work of Karl Marx? 169 00:06:45,800 --> 00:06:47,520 Karl Marx, okay. 170 00:06:47,520 --> 00:06:53,400 Specifically the idea that capitalism has this inherent tendency towards monopolies. 171 00:06:53,400 --> 00:06:54,400 Okay. 172 00:06:54,400 --> 00:06:57,600 I have to admit when I hear Karl Marx, my eyes start to glaze over a bit. 173 00:06:57,600 --> 00:06:58,600 I get it. 174 00:06:58,600 --> 00:06:59,600 It feels a little intimidating. 175 00:06:59,600 --> 00:07:03,040 Like we're about to dive into a dense economics textbook. 176 00:07:03,040 --> 00:07:04,040 Right. 177 00:07:04,040 --> 00:07:08,440 Can you break it down for me and more importantly for our listener in a way that makes sense? 178 00:07:08,440 --> 00:07:09,440 Absolutely. 179 00:07:09,440 --> 00:07:11,120 Marx's ideas can seem daunting. 180 00:07:11,120 --> 00:07:12,120 Yeah. 181 00:07:12,120 --> 00:07:17,120 But in the core, they're about understanding the underlying dynamics of capitalism. 182 00:07:17,120 --> 00:07:22,800 One of his key insights is that the rate of profit tends to fall over time in a capitalist 183 00:07:22,800 --> 00:07:23,800 system. 184 00:07:23,800 --> 00:07:24,800 Okay. 185 00:07:24,800 --> 00:07:25,800 That sounds counterintuitive. 186 00:07:25,800 --> 00:07:26,800 I know, right? 187 00:07:26,800 --> 00:07:27,800 But bear with me. 188 00:07:27,800 --> 00:07:28,800 Okay. 189 00:07:28,800 --> 00:07:29,800 I'm all ears. 190 00:07:29,800 --> 00:07:30,800 Help me understand this falling rate of profit thing. 191 00:07:30,800 --> 00:07:31,800 Okay. 192 00:07:31,800 --> 00:07:34,440 So imagine a bunch of companies all competing in the same market. 193 00:07:34,440 --> 00:07:35,440 Okay. 194 00:07:35,440 --> 00:07:39,000 To stay ahead, they constantly have to lower prices and cut costs. 195 00:07:39,000 --> 00:07:40,000 Right? 196 00:07:40,000 --> 00:07:41,000 Yeah. 197 00:07:41,000 --> 00:07:42,000 That makes sense. 198 00:07:42,000 --> 00:07:43,000 It's inevitable. 199 00:07:43,000 --> 00:07:44,000 Exactly. 200 00:07:44,000 --> 00:07:46,760 But as they do that, their profits start to get squeezed. 201 00:07:46,760 --> 00:07:48,960 So they look for ways to produce things more efficiently. 202 00:07:48,960 --> 00:07:49,960 Okay. 203 00:07:49,960 --> 00:07:54,560 Often by investing more in capital, things like machines and automation. 204 00:07:54,560 --> 00:07:55,560 Right. 205 00:07:55,560 --> 00:07:56,560 And less in labor. 206 00:07:56,560 --> 00:07:58,920 Marx called this the organic composition of capital. 207 00:07:58,920 --> 00:07:59,920 Okay. 208 00:07:59,920 --> 00:08:03,280 So they're basically replacing workers with machines to boost efficiency and keep those 209 00:08:03,280 --> 00:08:04,760 profit margins up. 210 00:08:04,760 --> 00:08:05,760 Precisely. 211 00:08:05,760 --> 00:08:07,080 But here's the catch. 212 00:08:07,080 --> 00:08:11,880 As more companies do this, the overall rate of profit across the entire system starts 213 00:08:11,880 --> 00:08:12,880 to decline. 214 00:08:12,880 --> 00:08:14,160 It becomes a race to the bottom. 215 00:08:14,160 --> 00:08:15,160 Exactly. 216 00:08:15,160 --> 00:08:17,200 So how does this connect back to monopolies? 217 00:08:17,200 --> 00:08:21,380 Well, according to Marx, this falling rate of profit creates a powerful incentive for 218 00:08:21,380 --> 00:08:25,440 companies to seek ways to escape the pressures of competition. 219 00:08:25,440 --> 00:08:26,440 Okay. 220 00:08:26,440 --> 00:08:30,200 And what better way to do that than to become monopoly? 221 00:08:30,200 --> 00:08:31,880 Become the only player in the game. 222 00:08:31,880 --> 00:08:32,880 Right. 223 00:08:32,880 --> 00:08:37,760 Once you dominate the market, you can control prices, dictate terms, and avoid the constant 224 00:08:37,760 --> 00:08:39,760 pressure of having to undercut your rivals. 225 00:08:39,760 --> 00:08:40,760 Wow. 226 00:08:40,760 --> 00:08:41,760 That's fascinating. 227 00:08:41,760 --> 00:08:42,760 Yeah. 228 00:08:42,760 --> 00:08:43,760 It is. 229 00:08:43,760 --> 00:08:48,120 So are you saying that Marx saw monopolies as like an inevitable outcome of capitalism? 230 00:08:48,120 --> 00:08:51,160 He definitely saw them as a natural tendency within the system. 231 00:08:51,160 --> 00:08:52,160 Okay. 232 00:08:52,160 --> 00:08:56,640 He believed that capitalism's drive for profit would inevitably lead to the concentration 233 00:08:56,640 --> 00:09:01,920 of capital in fewer and fewer hands, resulting in the emergence of monopolies. 234 00:09:01,920 --> 00:09:05,960 This is giving me a whole new perspective on how the US and China are approaching this 235 00:09:05,960 --> 00:09:06,960 tech race. 236 00:09:06,960 --> 00:09:07,960 Right. 237 00:09:07,960 --> 00:09:10,520 It's like two different economic philosophies colliding head on. 238 00:09:10,520 --> 00:09:12,160 That's a great way to put it. 239 00:09:12,160 --> 00:09:14,960 And Norton uses a real world example that's easy to grasp. 240 00:09:14,960 --> 00:09:15,960 Okay. 241 00:09:15,960 --> 00:09:16,960 The electric vehicle market. 242 00:09:16,960 --> 00:09:17,960 Okay. 243 00:09:17,960 --> 00:09:22,040 In China, you have a whole bunch of EV companies competing, which has driven down prices and 244 00:09:22,040 --> 00:09:23,720 spurred rapid innovation. 245 00:09:23,720 --> 00:09:26,120 So it's a dynamic, vibrant market. 246 00:09:26,120 --> 00:09:27,120 Very much so. 247 00:09:27,120 --> 00:09:32,080 And it's a stark contrast to the US, where Tesla has enjoyed a near monopoly for years. 248 00:09:32,080 --> 00:09:33,080 Right. 249 00:09:33,080 --> 00:09:37,560 Allowing them to charge premium prices while innovations, some would argue, hasn't been 250 00:09:37,560 --> 00:09:38,560 as explosive. 251 00:09:38,560 --> 00:09:39,560 Exactly. 252 00:09:39,560 --> 00:09:43,800 It's a perfect illustration of how different approaches to competition can lead to vastly 253 00:09:43,800 --> 00:09:44,800 different outcomes. 254 00:09:44,800 --> 00:09:45,800 Yeah. 255 00:09:45,800 --> 00:09:50,360 So in the US, we see this push towards consolidation with a few giant companies dominating key 256 00:09:50,360 --> 00:09:51,360 industries. 257 00:09:51,360 --> 00:09:52,360 Right. 258 00:09:52,360 --> 00:09:53,640 And that brings us back to deep seek. 259 00:09:53,640 --> 00:09:54,640 Yeah. 260 00:09:54,640 --> 00:09:59,320 By releasing their model open source, they were essentially rejecting that entire model. 261 00:09:59,320 --> 00:10:00,320 Right. 262 00:10:00,320 --> 00:10:03,320 It's like they were saying, we don't need a monopoly to innovate. 263 00:10:03,320 --> 00:10:06,960 We can achieve breakthroughs by collaborating and sharing knowledge. 264 00:10:06,960 --> 00:10:11,560 It was a radical move and one that clearly caught the US establishment off guard. 265 00:10:11,560 --> 00:10:12,560 Yeah. 266 00:10:12,560 --> 00:10:15,640 They weren't prepared for a competitor who wasn't playing by the same rules. 267 00:10:15,640 --> 00:10:16,960 That's what makes it so intriguing. 268 00:10:16,960 --> 00:10:22,720 It challenges the whole capitalist assumption that innovation requires monopoly control. 269 00:10:22,720 --> 00:10:23,720 It really does. 270 00:10:23,720 --> 00:10:28,760 So if China is embracing competition within its own system, how do they actually manage 271 00:10:28,760 --> 00:10:29,760 to make it work? 272 00:10:29,760 --> 00:10:30,960 That's a great question. 273 00:10:30,960 --> 00:10:32,960 And it's something Norton dives into in detail. 274 00:10:32,960 --> 00:10:33,960 Okay. 275 00:10:33,960 --> 00:10:40,560 It explains that China's socialist system allows it to make massive investments in strategic 276 00:10:40,560 --> 00:10:45,880 industries like AI while simultaneously encouraging internal competition. 277 00:10:45,880 --> 00:10:48,360 So it's like this delicate balancing act. 278 00:10:48,360 --> 00:10:49,360 Exactly. 279 00:10:49,360 --> 00:10:50,560 And they seem to be making it work. 280 00:10:50,560 --> 00:10:51,560 Okay. 281 00:10:51,560 --> 00:10:52,560 This is getting really interesting. 282 00:10:52,560 --> 00:10:53,560 Yeah. 283 00:10:53,560 --> 00:10:56,560 So how does this delicate balancing act actually play out? 284 00:10:56,560 --> 00:10:59,440 What tools does China use to make this happen? 285 00:10:59,440 --> 00:11:00,440 That's a great question. 286 00:11:00,440 --> 00:11:01,960 And I think that's where we should pick up next time. 287 00:11:01,960 --> 00:11:03,840 I think so too. 288 00:11:03,840 --> 00:11:04,840 This is fascinating. 289 00:11:04,840 --> 00:11:05,840 Yeah. 290 00:11:05,840 --> 00:11:06,840 This is just the tip of the iceberg. 291 00:11:06,840 --> 00:11:12,000 There's so much more to unpack in terms of how China's approach to tech development 292 00:11:12,000 --> 00:11:13,880 differs from the US model. 293 00:11:13,880 --> 00:11:14,880 Absolutely. 294 00:11:14,880 --> 00:11:18,200 And perhaps even more importantly, what it means for the future of innovation and global 295 00:11:18,200 --> 00:11:19,200 power. 296 00:11:19,200 --> 00:11:20,200 Right. 297 00:11:20,200 --> 00:11:21,200 So stay tuned. 298 00:11:21,200 --> 00:11:22,200 We'll be right back. 299 00:11:22,200 --> 00:11:23,200 All right. 300 00:11:23,200 --> 00:11:27,080 So last time we were talking about China's approach to tech, this whole idea of fostering 301 00:11:27,080 --> 00:11:30,360 competition within a state-guided framework. 302 00:11:30,360 --> 00:11:31,360 Right. 303 00:11:31,360 --> 00:11:33,040 It sounds kind of like a contradiction. 304 00:11:33,040 --> 00:11:34,040 It does a bit. 305 00:11:34,040 --> 00:11:35,520 How do they actually make that work? 306 00:11:35,520 --> 00:11:40,000 Well, it really comes down to a few key things that the Chinese government can do. 307 00:11:40,000 --> 00:11:42,080 First they have these things called five-year plans. 308 00:11:42,080 --> 00:11:43,080 Five-year plans? 309 00:11:43,080 --> 00:11:44,080 Yeah. 310 00:11:44,080 --> 00:11:47,400 They're basically blueprints for economic and technological development. 311 00:11:47,400 --> 00:11:48,400 Okay. 312 00:11:48,400 --> 00:11:55,840 And these plans set very specific goals for industries like AI, outlining where they want 313 00:11:55,840 --> 00:11:57,280 to see growth and innovation. 314 00:11:57,280 --> 00:11:59,240 So it's not just like throwing money at the problem. 315 00:11:59,240 --> 00:12:00,240 No, not at all. 316 00:12:00,240 --> 00:12:02,560 There's a strategic vision behind it? 317 00:12:02,560 --> 00:12:05,840 Like a roadmap for where they want their tech sector to go. 318 00:12:05,840 --> 00:12:06,840 Okay. 319 00:12:06,840 --> 00:12:07,840 And then what? 320 00:12:07,840 --> 00:12:09,040 And then they use state-owned banks. 321 00:12:09,040 --> 00:12:10,040 State-owned banks. 322 00:12:10,040 --> 00:12:11,040 Yeah. 323 00:12:11,040 --> 00:12:14,240 To provide cheap loans to companies that are aligned with these plans. 324 00:12:14,240 --> 00:12:15,240 Interesting. 325 00:12:15,240 --> 00:12:19,280 So it's like a government-backed venture capital fund, but on a massive scale. 326 00:12:19,280 --> 00:12:20,560 That's a great way to put it. 327 00:12:20,560 --> 00:12:22,680 But how does that encourage competition, though? 328 00:12:22,680 --> 00:12:25,960 Wouldn't that just lead to a few companies dominating? 329 00:12:25,960 --> 00:12:28,160 That's where the competition part comes in. 330 00:12:28,160 --> 00:12:32,520 So while the government provides support and guidance, they also encourage running. 331 00:12:32,520 --> 00:12:36,800 So there's rivalry among companies within those strategic sectors. 332 00:12:36,800 --> 00:12:37,800 Okay. 333 00:12:37,800 --> 00:12:44,720 They create incentives for innovation, pushing companies to outperform each other. 334 00:12:44,720 --> 00:12:47,680 So it's like a pressure cooker, but the government's acting as a referee. 335 00:12:47,680 --> 00:12:48,680 Yeah. 336 00:12:48,680 --> 00:12:49,920 To make sure things don't get too out of hand. 337 00:12:49,920 --> 00:12:50,920 That's a great analogy. 338 00:12:50,920 --> 00:12:53,720 It's a very different model from the US system, right? 339 00:12:53,720 --> 00:12:54,720 Yeah, definitely. 340 00:12:54,720 --> 00:12:59,120 Where we often see a more hands-off approach, letting the market sort things out on its 341 00:12:59,120 --> 00:13:00,120 own. 342 00:13:00,120 --> 00:13:04,120 So we've seen that can lead to those giant monopolies, that can stifle competition. 343 00:13:04,120 --> 00:13:07,960 And Norton argues that this difference in approach is having a real impact on AI. 344 00:13:07,960 --> 00:13:08,960 Oh, absolutely. 345 00:13:08,960 --> 00:13:13,480 He says that China's focus on competition is driving faster innovation and lower prices 346 00:13:13,480 --> 00:13:16,480 while the US risks falling behind. 347 00:13:16,480 --> 00:13:19,520 He uses the example of facial recognition technology. 348 00:13:19,520 --> 00:13:20,520 Facial recognition. 349 00:13:20,520 --> 00:13:25,000 Yeah, China's become a world leader in this field, with companies constantly pushing 350 00:13:25,000 --> 00:13:26,000 the boundaries. 351 00:13:26,000 --> 00:13:27,000 Okay. 352 00:13:27,000 --> 00:13:32,840 And bringing it in everything from security systems to retail stores to even public restrooms. 353 00:13:32,840 --> 00:13:33,840 Wow. 354 00:13:33,840 --> 00:13:34,840 I've read about that. 355 00:13:34,840 --> 00:13:36,800 It sounds like something out of a sci-fi movie. 356 00:13:36,800 --> 00:13:37,800 It does, bit, right? 357 00:13:37,800 --> 00:13:40,360 But also kind of unsettling from a privacy perspective. 358 00:13:40,360 --> 00:13:41,360 Yeah. 359 00:13:41,360 --> 00:13:43,520 There are definitely ethical concerns to consider. 360 00:13:43,520 --> 00:13:44,520 For sure. 361 00:13:44,520 --> 00:13:46,400 And Norton acknowledges that. 362 00:13:46,400 --> 00:13:51,640 But his point is that China's competitive environment has driven rapid progress. 363 00:13:51,640 --> 00:13:52,640 Okay. 364 00:13:52,640 --> 00:13:55,560 And he contrasts that with the US. 365 00:13:55,560 --> 00:14:00,600 Where companies like Google and Amazon have faced a lot of pushback over facial recognition 366 00:14:00,600 --> 00:14:01,600 tech. 367 00:14:01,600 --> 00:14:02,600 Right. 368 00:14:02,600 --> 00:14:04,600 Partly due to concerns about its potential for misuse. 369 00:14:04,600 --> 00:14:05,600 Yeah. 370 00:14:05,600 --> 00:14:06,600 Makes sense. 371 00:14:06,600 --> 00:14:09,840 And while those concerns are valid, it's also worth noting that the pace of development 372 00:14:09,840 --> 00:14:12,640 in the US seems to have slowed down as a result. 373 00:14:12,640 --> 00:14:14,960 So we've got these two very different models. 374 00:14:14,960 --> 00:14:20,920 The US clinging to an approach that encourages monopolies versus China, which seems to be 375 00:14:20,920 --> 00:14:24,680 leveraging competition within its socialist framework to drive innovation. 376 00:14:24,680 --> 00:14:25,680 Yeah. 377 00:14:25,680 --> 00:14:30,160 It's almost like we're seeing the early stages of a new kind of tech cold war. 378 00:14:30,160 --> 00:14:32,160 That's a term we hear a lot these days. 379 00:14:32,160 --> 00:14:34,680 And Norton argues that it's more than just rhetoric. 380 00:14:34,680 --> 00:14:35,680 He does. 381 00:14:35,680 --> 00:14:40,720 He believes that this rivalry between the US and China over technology is part of a bigger 382 00:14:40,720 --> 00:14:42,840 struggle for global influence. 383 00:14:42,840 --> 00:14:43,840 And dominance. 384 00:14:43,840 --> 00:14:44,840 Exactly. 385 00:14:44,840 --> 00:14:48,200 And remember Dario M. O'Day, the CEO of Ampropic. 386 00:14:48,200 --> 00:14:53,000 He explicitly called for maintaining a unipolar world. 387 00:14:53,000 --> 00:14:54,560 A unipolar world. 388 00:14:54,560 --> 00:14:56,280 Located by the US and its allies. 389 00:14:56,280 --> 00:14:57,280 He really said. 390 00:14:57,280 --> 00:15:02,600 He basically said the US must dominate AI to preserve national security. 391 00:15:02,600 --> 00:15:04,200 That's a pretty bold statement. 392 00:15:04,200 --> 00:15:09,440 It paints this picture of a world where technological leadership is the key to everything. 393 00:15:09,440 --> 00:15:10,440 Right. 394 00:15:10,440 --> 00:15:12,920 And it's a view that's shared by many in Washington. 395 00:15:12,920 --> 00:15:17,640 And it's driving a lot of the policy decisions we're seeing, like attempts to restrict Chinese 396 00:15:17,640 --> 00:15:19,720 access to advanced technologies. 397 00:15:19,720 --> 00:15:20,880 And in investments. 398 00:15:20,880 --> 00:15:21,880 Exactly. 399 00:15:21,880 --> 00:15:26,080 And that points out the hypocrisy of US accusations of Chinese aggression. 400 00:15:26,080 --> 00:15:27,080 Right. 401 00:15:27,080 --> 00:15:31,280 Especially given the huge difference in their military interventions around the world. 402 00:15:31,280 --> 00:15:32,280 Yeah. 403 00:15:32,280 --> 00:15:35,120 The US has a long history of military involvement globally. 404 00:15:35,120 --> 00:15:36,120 A long history. 405 00:15:36,120 --> 00:15:41,240 While China has maintained a relatively peaceful foreign policy for decades. 406 00:15:41,240 --> 00:15:43,600 It makes you wonder if it's really about national security. 407 00:15:43,600 --> 00:15:44,600 Right. 408 00:15:44,600 --> 00:15:45,600 Or something else. 409 00:15:45,600 --> 00:15:46,600 Exactly. 410 00:15:46,600 --> 00:15:47,800 This all raises a crucial question. 411 00:15:47,800 --> 00:15:48,800 Yeah. 412 00:15:48,800 --> 00:15:53,800 The rivalry between the US and China really mean for the future of technology. 413 00:15:53,800 --> 00:15:55,880 And the global balance of power. 414 00:15:55,880 --> 00:15:56,880 That's the big question. 415 00:15:56,880 --> 00:15:57,880 Right. 416 00:15:57,880 --> 00:15:58,880 Right. 417 00:15:58,880 --> 00:16:04,720 If China's model proves more effective at fostering innovation and driving down costs, 418 00:16:04,720 --> 00:16:07,640 could we see a shift in global leadership in tech? 419 00:16:07,640 --> 00:16:09,280 And what would that mean for the US? 420 00:16:09,280 --> 00:16:10,280 Right. 421 00:16:10,280 --> 00:16:11,920 Which has long enjoyed a position of dominance. 422 00:16:11,920 --> 00:16:13,200 It's a lot to consider. 423 00:16:13,200 --> 00:16:16,680 And as Norton points out, the choices made by governments and tech companies in the coming 424 00:16:16,680 --> 00:16:19,480 years will likely determine which path we end up on. 425 00:16:19,480 --> 00:16:21,800 He reminded us that this isn't a new phenomenon. 426 00:16:21,800 --> 00:16:22,800 Oh really? 427 00:16:22,800 --> 00:16:25,960 Remember the robber barons of the late 19th and early 20th centuries? 428 00:16:25,960 --> 00:16:26,960 Oh yeah. 429 00:16:26,960 --> 00:16:32,320 Figures like John D. Rockefeller and Cornelius Vanderbilt, they built vast empires by controlling 430 00:16:32,320 --> 00:16:33,320 key industries. 431 00:16:33,320 --> 00:16:35,680 I remember learning about them in history class. 432 00:16:35,680 --> 00:16:37,600 They were the original monopolists. 433 00:16:37,600 --> 00:16:38,600 Exactly. 434 00:16:38,600 --> 00:16:41,960 And eventually the US government had to step in with antitrust laws. 435 00:16:41,960 --> 00:16:42,960 Antitrust laws. 436 00:16:42,960 --> 00:16:47,200 They break up those monopolies and restore some semblance of competition. 437 00:16:47,200 --> 00:16:51,560 So are you suggesting that we might be heading toward a similar situation today? 438 00:16:51,560 --> 00:16:52,560 Possibly. 439 00:16:52,560 --> 00:16:53,960 With these tech giants? 440 00:16:53,960 --> 00:16:56,160 It's definitely being debated more and more. 441 00:16:56,160 --> 00:16:59,560 Will we see a new era of antitrust action? 442 00:16:59,560 --> 00:17:00,560 Maybe. 443 00:17:00,560 --> 00:17:03,640 Amed at companies like Google, Amazon and Facebook? 444 00:17:03,640 --> 00:17:09,480 The question is, will governments have the political will to take on these powerful companies? 445 00:17:09,480 --> 00:17:10,480 That's a good question. 446 00:17:10,480 --> 00:17:14,200 And if they do, what form would that action take? 447 00:17:14,200 --> 00:17:18,880 Would they try to break them up, regulate them more heavily or find some other solution? 448 00:17:18,880 --> 00:17:21,880 Those are some big questions and I have a feeling the answers will have a huge impact 449 00:17:21,880 --> 00:17:22,880 on all of us. 450 00:17:22,880 --> 00:17:23,880 Yeah, for sure. 451 00:17:23,880 --> 00:17:27,120 But before we get too lost in the future, I think it's worth circling back to what Norton 452 00:17:27,120 --> 00:17:32,800 sees as the core issue here, this tension between competition and capitalism. 453 00:17:32,800 --> 00:17:33,800 Right. 454 00:17:33,800 --> 00:17:35,800 He makes a really thought provoking point. 455 00:17:35,800 --> 00:17:38,200 He uses Peter Thiel's own words. 456 00:17:38,200 --> 00:17:40,560 Over capitalism and competition are opposites. 457 00:17:40,560 --> 00:17:41,560 Oh yeah. 458 00:17:41,560 --> 00:17:43,040 It's a provocative statement. 459 00:17:43,040 --> 00:17:46,560 But it makes you think about what's really motivating these tech giants. 460 00:17:46,560 --> 00:17:53,400 If the goal is to just maximize profits, then eliminating competition makes perfect sense. 461 00:17:53,400 --> 00:17:56,280 But where does that leave consumers? 462 00:17:56,280 --> 00:17:59,560 And what does it mean for innovation in the long run? 463 00:17:59,560 --> 00:18:04,240 Those are questions we all need to be asking ourselves as we navigate this rapidly evolving 464 00:18:04,240 --> 00:18:05,520 tech landscape. 465 00:18:05,520 --> 00:18:07,880 This has been an incredible deep dive. 466 00:18:07,880 --> 00:18:10,120 I feel like we've only scratched the surface. 467 00:18:10,120 --> 00:18:12,000 There's so much more to explore. 468 00:18:12,000 --> 00:18:15,080 My brain is fried trying to wrap my head around all of this. 469 00:18:15,080 --> 00:18:16,240 That's a lot to take in, right? 470 00:18:16,240 --> 00:18:17,240 Yeah. 471 00:18:17,240 --> 00:18:18,720 So maybe we can just try to break it down. 472 00:18:18,720 --> 00:18:19,720 For sure. 473 00:18:19,720 --> 00:18:21,880 Distill it down into some key takeaways. 474 00:18:21,880 --> 00:18:23,480 Where do we even start? 475 00:18:23,480 --> 00:18:28,960 Well I think Norton's main point is that this whole US approach, this favoring monopolies 476 00:18:28,960 --> 00:18:31,760 thing, it's just not going to work in the long run. 477 00:18:31,760 --> 00:18:37,280 He's saying that sticking with this model might actually be holding back innovation. 478 00:18:37,280 --> 00:18:41,040 Some could even lead to the US falling behind in the global tech race. 479 00:18:41,040 --> 00:18:46,680 Any contrast to that with China, which seems to be using competition within its socialist 480 00:18:46,680 --> 00:18:47,680 system. 481 00:18:47,680 --> 00:18:48,680 Right. 482 00:18:48,680 --> 00:18:49,840 As a way to speed up its technological development. 483 00:18:49,840 --> 00:18:50,840 Exactly. 484 00:18:50,840 --> 00:18:51,840 And he keeps coming back to DeepSeek. 485 00:18:51,840 --> 00:18:52,840 Yeah. 486 00:18:52,840 --> 00:18:55,000 DeepSeek is like the poster child for this whole argument. 487 00:18:55,000 --> 00:18:56,000 Right. 488 00:18:56,000 --> 00:19:00,440 It's a perfect example of how a different approach can disrupt everything. 489 00:19:00,440 --> 00:19:04,960 And challenge those deeply held assumptions about capitalism and innovation. 490 00:19:04,960 --> 00:19:08,640 Yeah, that whole monopolies are the only path to innovation thing. 491 00:19:08,640 --> 00:19:09,640 Right. 492 00:19:09,640 --> 00:19:12,240 DeepSeek's open source model just throws that out the window. 493 00:19:12,240 --> 00:19:14,600 It's like they're saying, hey, what if we just shared knowledge? 494 00:19:14,600 --> 00:19:15,600 Yeah. 495 00:19:15,600 --> 00:19:18,480 What if we collaborated instead of trying to hoard everything for ourselves? 496 00:19:18,480 --> 00:19:20,440 That's a really different way of thinking. 497 00:19:20,440 --> 00:19:26,920 And it's interesting because the US government's reaction was to label them a national security 498 00:19:26,920 --> 00:19:27,920 threat. 499 00:19:27,920 --> 00:19:32,200 Even though some US tech giants are being accused of doing similar stuff, like using 500 00:19:32,200 --> 00:19:35,880 tons of data without even thinking about copyright. 501 00:19:35,880 --> 00:19:36,880 It's pretty ironic. 502 00:19:36,880 --> 00:19:37,880 It is, right? 503 00:19:37,880 --> 00:19:42,520 It's like the US is trying to protect its dominance by using the same tactics it criticizes 504 00:19:42,520 --> 00:19:43,520 others for. 505 00:19:43,520 --> 00:19:44,520 Exactly. 506 00:19:44,520 --> 00:19:46,400 And it speaks to this deeper anxiety. 507 00:19:46,400 --> 00:19:47,680 Like are we losing our grip? 508 00:19:47,680 --> 00:19:48,680 Yeah. 509 00:19:48,680 --> 00:19:50,480 The US has always been the leader in tech. 510 00:19:50,480 --> 00:19:51,480 For so long. 511 00:19:51,480 --> 00:19:53,800 But now that position is being challenged. 512 00:19:53,800 --> 00:19:57,440 And not just by China's tech, but by its whole economic model. 513 00:19:57,440 --> 00:19:58,440 Yeah. 514 00:19:58,440 --> 00:20:00,360 One that seems to be working pretty well in some areas. 515 00:20:00,360 --> 00:20:03,080 He's not saying that China's model is perfect. 516 00:20:03,080 --> 00:20:04,080 Right. 517 00:20:04,080 --> 00:20:05,080 No system is. 518 00:20:05,080 --> 00:20:06,580 There are definitely drawbacks. 519 00:20:06,580 --> 00:20:07,580 Like what? 520 00:20:07,580 --> 00:20:11,120 Well, you know, concerns about the government having too much control. 521 00:20:11,120 --> 00:20:12,120 Yeah. 522 00:20:12,120 --> 00:20:13,840 And maybe limiting individual freedom. 523 00:20:13,840 --> 00:20:14,840 Right. 524 00:20:14,840 --> 00:20:16,800 It's not a simple good versus bad situation. 525 00:20:16,800 --> 00:20:20,160 No, but that's what makes Norton's talk so valuable. 526 00:20:20,160 --> 00:20:22,960 It forces us to really look at our own assumptions. 527 00:20:22,960 --> 00:20:27,200 It makes you think about how our own economic system is shaping the future of technology. 528 00:20:27,200 --> 00:20:30,240 And whether there might be other approaches worth trying. 529 00:20:30,240 --> 00:20:31,240 Exactly. 530 00:20:31,240 --> 00:20:32,240 He's asking the right questions. 531 00:20:32,240 --> 00:20:35,800 So for someone listening who's trying to make sense of all this, what's the one thing 532 00:20:35,800 --> 00:20:37,960 you really want them to remember? 533 00:20:37,960 --> 00:20:38,960 Hmm. 534 00:20:38,960 --> 00:20:43,640 I think the biggest takeaway is that the future of technology and how power is distributed 535 00:20:43,640 --> 00:20:46,160 globally, it's not set in stone. 536 00:20:46,160 --> 00:20:47,160 Okay. 537 00:20:47,160 --> 00:20:52,040 There are different paths we can choose different models to explore. 538 00:20:52,040 --> 00:20:56,520 And the choices we make now will have a huge impact on the world we create. 539 00:20:56,520 --> 00:20:57,760 That's a powerful message. 540 00:20:57,760 --> 00:21:00,560 It's like a challenge and an opportunity all at once. 541 00:21:00,560 --> 00:21:01,560 Yeah. 542 00:21:01,560 --> 00:21:03,520 A challenge to question everything we think we know. 543 00:21:03,520 --> 00:21:04,520 Right. 544 00:21:04,520 --> 00:21:06,920 And an opportunity to imagine a different future. 545 00:21:06,920 --> 00:21:09,120 One where technology benefits everyone. 546 00:21:09,120 --> 00:21:10,440 Not just to select few. 547 00:21:10,440 --> 00:21:11,440 Right. 548 00:21:11,440 --> 00:21:14,760 And if you're interested in learning more, I'd recommend looking into the history of 549 00:21:14,760 --> 00:21:16,280 US antitrust laws. 550 00:21:16,280 --> 00:21:17,280 Yeah, antitrust laws. 551 00:21:17,280 --> 00:21:18,280 Okay. 552 00:21:18,280 --> 00:21:21,600 Yeah, it's a fascinating look at how governments have tried to regulate monopolies and promote 553 00:21:21,600 --> 00:21:22,760 competition. 554 00:21:22,760 --> 00:21:25,400 And those lessons are probably more relevant now than ever. 555 00:21:25,400 --> 00:21:26,400 Absolutely. 556 00:21:26,400 --> 00:21:29,120 And everyone listening, we want to hear what you think about all of this. 557 00:21:29,120 --> 00:21:30,120 Yeah. 558 00:21:30,120 --> 00:21:33,880 Are we moving towards a world where power is more evenly distributed? 559 00:21:33,880 --> 00:21:35,160 A multipolar world. 560 00:21:35,160 --> 00:21:36,160 Yeah. 561 00:21:36,160 --> 00:21:37,480 Will the US stay on top? 562 00:21:37,480 --> 00:21:40,680 Or is China's approach the way forward? 563 00:21:40,680 --> 00:21:43,560 Share your thoughts because this conversation is just getting started. 564 00:21:43,560 --> 00:21:44,920 It's definitely not over. 565 00:21:44,920 --> 00:21:57,080 Thanks for joining us on this deep dive.