$SMH is down 5% today. What happens next is VERY path-dependent. We’ll have tons of news events this week on the regulation. It almost feels similar to the tariff tantrum, though I'm pretty certain it's not possible to roll this back. The market can choose between two narrative types for this slowdown. The first candidate is DeepSeek-like panix. DeepSeek could have gone the other way. There was a version of January 2025 in which Jevons' paradox (cheaper compute produces more demand for compute) was the stronger story and the market never crashed. But instead panic set in. And this time the story would be that the labs are slowing down, they will not buy training compute, compute prices will crash, and this was the top. The second candidate is the nothing burger. The stocks do not drop much, and the story becomes regulatory capture, nothing promised, nothing changed, it was about China. Then the impact is small.