Honestly dont think Trump side can yield much from Xi's visit. They have neither a stick nor a carrot when dealing with China. Trade Reality: China’s bilateral trade surplus with the US fell, but its total global trade surplus tripled from $351B in 2018 to >$1.2T today. Net-net, China's overall trade position is actually stronger now than when Trump launched his first trade war. Trump's trade war managed to do was accelerate Beijing's push for self-sufficiency and make them far less dependent on the US as a trade partner, effectively making China great again. The table has already turned. Also this time Bessent can't coerce Beijing the way the US bullies Japan or South Korea.They are completely boxed in on both fiscal and monetary policy (especially with a strengthening RMB), burdened by high debt, ongoing wars, and domestic inflation eroding actual purchasing power On the contrary, China faces domestic deflation and ultra-soft demand following the property bubble collapse (with Beijing and Shanghai housing down ~30%, big size purchases tied to home improvement and appliances are cooked). Meanwhile, the domestic purchasing power of the RMB has risen due to massive oversupply and fierce competition among manufacturers. Forcing China to buy excess US imports is the least effective way to fix structural demand, and actually harms domestic supply. Trump has no leverage, no policy maneuverability, and no solution China actually needs 🤷

The vast majority of last-gen internet businesses basically all had a first-mover advantage because of network effects/ marginal costs close to zero; but the LLM business might be a later-mover advantage. First mover might have economies of scale, but the marginal costs are very likely convex. This is also different from past disruptive innovation businesses with economies of scale (electricity/automobiles).

reading internal reports on HKEX AI IPO recap, always fascinated by HKEX as the perfect canary for new narratives. it gives you both sides of price discovery, majority of the ai narrative stocks are actually down bad after its unlock (180 days), while spread trade opportunity is also huge there ie when Zhipu listed at 1/100 of Anthropic then valuation market inefficiency is the feast

Been watching Bessent plug the UST market from every direction.. the sovereign cracks are starting to show: buybacks, defending Yen (raising dollars against USTs instead of BOJ dumping them into the market) plus AI capex arms race is now competing for the same pool of capital Hard not to be reminded of the the historical parallels Plaza in 1985, joint yen buying in 1998, G7 yen selling after Fukushima in 2011. historical context is diff but whenever Washington enters fx market the spillover is always bigger than fx itself When the anchor asset of global capital markets, the presumed “safest asset”, needs this much active maintenance, you know something structurally unstable is cooking

dad has been saying one thing since youth: learn survival sports (ski/surfing/boxing etc), not vanity sports (tennis, golf) mom said making proper food is life essential skill to have, learn how to use fire. Now i appreciate these much more so then before when seeing kids literally cant survive in camp/rv

In 2015, Uber felt like the safest growth-stage in heydays of mobile internet frenzy, RSUs offered ~$50/share, every FAANG friend took the offers felt like a no-brainer hop 11yr later share price ~$75, 1.5x from the offers back then.. Now big ai labs offers are priced with trillion-dollar outcomes as the base case. That massive chasm between perceived wealth and realized wealth is exactly the mispricing between primary and secondary markets

Founder = prophet Angels = apostles VC = priesthood Pitch deck = scripture Term sheet = covenant Demo day = conversion ritual Early employees = disciples Early users = converts PMF = revelation Pivot = reincarnation Failure = trial Exit = judgment day Next startup = second coming

Been on the slopes for the past two weeks with our capital markets team. Main offsite question: where can we still hide from the AI grey rhino? 🦏 Uncomfortable conclusion: EVERYTHING is one AI trade now - technology, utilities, industrials, real estate, banks, pe/pc/vc. everyone is underwriting assumption: downstream RoI will eventually justify the upstream capex and credit It’s trickle-down economics with GPUs and one dream of AGI, except nothing is trickling down

Crypto and AI are the same eschatological trade with opposite ownership regimes: Crypto said money would collapse, but anyone could buy BTC. AI says labor will collapse, but the upside is gated behind large VCs, frontier lab equity, private rounds

TSMC might hold off a worst ai bubble until 2028, at least we wont have chips flood the market till then Beijing demands using Huawei's over Nvidia (4 Huawei 950 ≈ 1 GB300), but still its capacity is far from enough to feed local Chinese model cos and hyperscalers

China macro is turning into an extreme dispersion trade. Headline GDP is becoming almost useless.. Japanification, but with geographic arbitrage both domestically and internationally is my closest mental model for what comes next Maybe this is what the last inning of industrial and geopolitical catch-up looks like: hyper-competitiveness abroad, household retrenchment at home. Export strength no longer translates cleanly into household income or confidence; youth unemployment remains elevated at ~16%, even after excluding students. China may be entering a long cycle of Japanification, but with much more room for geographic arbitrage, both within China and across its supply chains. Externally, China looks almost unstoppable: June exports +27% YoY, H1 high-tech manufacturing +13.3%, IC manufacturing +67.3%. Manufacturing PMI crawled back above 50. AI-linked demand and high-end exports are doing the heavy lifting. But some of this demand is borrowed from the future. AI capex is partly a game of musical chairs and future capacity lock-in, while the export surge contains tariff front-loading. Neither is a durable substitute for domestic consumption. Inside China, the picture is almost inverted. Retail sales fell 0.6% YoY in May and grew only 1.0% in June. H1 fixed-asset investment fell 5.7%, property investment fell 18%, and new-home sales value fell 13.6%. The price chain does not look good either: producer input prices +6.4%, factory-gate prices +4.1%, CPI only +1.0%. Costs are moving downstream much faster than consumer pricing power. Many downstream firms have to absorb the gap through thinner margins, intensifying the rat race. Even consumption itself is dispersing. Urban retail was -0.9% in May vs rural +1.5%; in June, +0.8% vs +2.1%. But rural outlets are only ~14% of total retail, and the rural print is policy-sensitive, wont be able to carry the entire economy Japan after the 1980s bubble offers a strong parallel: stagnation from the early 1990s, then persistent deflation from the late 1990s into the early 2010s. But China has a continental shock absorber Japan never had at this scale: a vast interior homeland where housing and daily life are far cheaper, while infra and digital services have narrowed the quality of life gap with tier 1 cities. The option to leave tier 1 cities and return home has become a popular choices for many, this can lower household burn rates and may soften the social transmission of stagnation Writing this, NF’s Hope started playing in my head: Thirty years of running, thirty years of searching Thirty years of hurting, thirty years of pain For China, make it almost fifty. Almost fifty years of running from scarcity since Reform and Opening, searching for modernity, and avg citizens absorbing the pain of remaking an entire society at impossible speed Maybe that is the eternal paradox of industrial catch-up: a country can arrive frontier before its people feel they have.

Open weights don’t need full parity with frontier labs. They only need what I call “pleb parity”: get close enough on high-value, high-volume task at a time, so 20 specialized plebs can divide the work and level the game against one elite. When you have a gang of equally talented, frugal and relentless Chinese AI founders, who stays #1# on the leaderboard matters less. What matters is that whenever one falls behind, another open-weight peer fills the gap very soon My simple mental model for Anthropic/OpenAI’s future ARR is the frontier-call ratio: Across an end-to-end business outcome, what % of steps still MUST call the most expensive frontier model? As plebs pushes that ratio down, pricing power and future ARR growth expectations get eroded. Think of the most elite revenue-generating team inside a company. How many seats truly need to be filled by Ivy/Stanford grads? AI stacks will look the same: frontier intelligence for the key steps where it materially changes the outcome; open weights everywhere else. The only domains I can think of with a real case for unlimited frontier-token budgets 1) Quant trading, mm and pod shops: RenTech, Jane Street, Point72 etc where raw intellectual horsepower can be translated directly into P&L 2) Ultra-high-stakes discovery: next-gen chips and materials, cancer drugs, etc. But even there, the upside/scale is limited by the even more scarce giga brain human minds to define the right problem and know where to tinker, not by token or compute For the rest of the world, and most knowledge-work domains, pleb parity is probably the long-term equilibrium. Long live the plebs. Kudos to every Chinese AI founder and engineer working against the odds to make it happen

again if you take side on the 🇨🇳 China (Scaling Supremacy) vs 📷 USA (Emerging Supremacy) is a terrible investor mindset.. the winning mental model is a spread trade: when Zhipu and Minimax IPO'ed at 1/100 of anthropic and OAI price is no brainer to long the spread convergence

Glad crypto has trained me be extremely vigilant on this. From kichim premium in every crypto cycle now to memory stocks, Korea may be one of the cleanest late cycle indicators in global riskon assets. not just because Kr retail is exuberant degens, more on the market structure itself fuels retail heat even more Korea launched single-stock leveraged products on May 27, after the move had already gone vertical, local kr retail flood into it at peak narrative velocity vs investors in the HK-listed leveraged product still had months of upside cushion When a crowded national equity market adds leverage to its hottest stock after the reflexive phase begun, the product launch itself makes the formation of topping signal This happens every time in crypto cycle as well when local Korean exchanges listed assets mostly after they have gone up parabolic in global exchanges elsewhere, making poor korean retail as the last exit liquidity ..