The horizon is not so far as we can see, but as far as we can imagine

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The Best Short Summary of Why China Is Winning & the West Fading

It’s about living in reality:

The main difference between American and Chinese society today is less that one has more dumb people and one has more smart people and more that within public life, being stupid is relentlessly shamed as stupid in one and being smart is relentlessly shamed as stupid in the other.

These days, American society assigns intelligence credentials based not on who can demonstrate a meticulous, well-developed understanding of how anything works, but on who can give the smartest sounding, post-hoc rationalization for the half-baked ideas people desperately want to be true.

If you do the former, and it yields answers people don’t like, they’ll reach deep into their bag of fantasyland narratives to try to invalidate your credibility. If you provide the latter, you’re celebrated — not only as a genius, but a champion. When things don’t work as promised?

They’ll have already sunk so much personal credibility and self esteem into the fantasy they’d rather burrow deeper into delusion than backtrack. In other words, “smart” is whatever helps nurse fragile self esteems rather than whatever helps them understand and work with reality.

In Chinese society today, intelligence is still very much a consequential trait that demands its keep via real, effective results. In the US, it’s turned into another fake self esteem signifier in a culture that’s long stopped caring about anything but fake self esteem signifiers.

I observed this a long time ago, personally. I had predicted the financial crisis, right down to the month. I had been right about Iraq and a variety of other important issues. I was discussing the “Arab Spring,” and said, “It isn’t over till the army votes.”

There was argument back and forth, and I said, in effect, “Look, I have a track record, and so do you. I’m usually right, and you’re usually wrong.”

The response was furious, and I was booted off that particular forum.

In my last major blog role as managing editor, I was able to increase traffic by 60 percent in less than a year, and I felt onto most of it after the election of Barack Obama. Other Netroots sites were bleeding readers, but not us. I could say exactly what had been done to increase traffic. But the publisher was sure they knew better, so I left. That site no longer exists.

People who were for the Iraq war, who made claims that it would work and be easy are now major pundits. Both Matt Yglesias and Ezra Klein were for the war. Indeed, Yglesias wanted to take out all of Iraq, Iran, and North Korea. A study in the L.A. Times found that media figures against the war were fired, laid off, or had their careers stagnate. Those who were for it had their careers prosper.

A correspondent once did a serious search on who had been right, in public and in advance, about the financial crisis. The number was in the 40s. That means that almost no economists, the people who, you know, study this stuff and claim to know something, predicted an obvious bubble. You only had to look at a couple charts. It wasn’t rocket science.

For most of my life, development economists claimed that free trade without protection for local industry was how countries should industrialize and that they should move to cash crops and sell commodities. Every country that tried this failed. The ones who succeeded at industrializing did so behind some form of protection for new industry: China, Japan, South Korea, Taiwan, and so on. They certainly didn’t double down on commodities. The only thing that has ever worked is exactly what development economists advised against.

Fools like Francis Fukuyama became famous and wealthy by saying nonsense things like how “democracy and capitalism are two sides of the same coin” and “the end of history has arrived.” Those of us who warned that it mattered where industry was, and that sending your industry to other countries was the equivalent of shipping away your power and prosperity, were sneered at.

Climate change has, for decades, come in “over,” which is to say worse, than the consensus predictions. Almost every single bad event has happened sooner than the IPCC said it would. You’d think, after a while, they’d ask themselves, “Why are we getting this wrong all the time?” and self-correct. If you can’t figure out why, just look at the windage, make your predictions, then add the average error rate. “Events usually happen X percent sooner than our models predict, so here’s the dates taking that into account.”

It’s not rocket science.

Most Western pundits thought that Ukraine would “win” a war against Russia. No. Pundits told us over and over again that NATO expansion wouldn’t cause a war. Wrong. Pundits told us that Russia was weak compared to NATO and that GDP accurately measured their strength. Pundits thought that sanctions would collapse the Russian economy, not taking into account that China had a veto over that, and a reason to use it.

In every single case, the discourse had, and has been, seized by what people want to believe, or what oligarchs want people to believe. They want people to believe what pays, not what is true. There are no consequences for being wrong and no self-awareness. I am bad at electoral predictions. So when I make one, I always note that I suck and am probably a negative indicator. (I thought Harris would win, for example, though I did get the Canadian election right.)

Now, it isn’t entirely true that there’s no accountability in the West. There is. There is only one rule that the West insists always be followed:

The rich must keep becoming richer, no matter the cost to anyone or anything else.

Because that is the only form of Western accountability, the West will keep losing, because richer rich and higher inequality do not cause or even correlate with any of the main constituents of power, prosperity, or technological progress

Our entire discourse system, our entire media, and our entire elite class have zero accountability outside of ensuring the rich get richer.

At this they have succeeded and at nothing else.

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China Is Going to Win the AI Race

Yeah, it doesn’t seem that way, but it’s how it will turn out. What China’s doing is embracing actual open AI (unlike the company named Open AI). Open source and open standards. Everyone outside North America and maybe Europe is going to prefer that, and those who set the standards control the tech. On top of that, American AI is frighteningly expensive; no one in the US is making any money. Every query costs more to produce than is earned, even from customers who are paying, let alone all the free accounts.

Deepseek is much less expensive per query, however. The idea of capitalism is to, y’know, make money? There’s a limit to how much money Softbank can throw at AI if it doesn’t start providing at least some returns.

Further, American-style AI requires massive amounts of energy, and guess who produces the equipment needed to quickly build more generation capacity? (If you need more than one guess, you haven’t been paying attention.)

Every hyper-scale or “AI-ready” data-centre campus needs its own sub-station and a bank of step-down transformers big enough to deliver 50-150 MVA per site. Add the grid-side upgrades that utilities must make to back-feed those loads, and each incremental gigawatt of GPU capacity pulls several hundred megavolt-amps (MVA) of new LPT demand.

Roughly 80 percent of U.S.’s large power transformers (LPT≥100 MVA) are imported and lead-times have ballooned from 50 weeks (2021) to 120-210 weeks (2024), and the lone domestic GOES mill provides only a fraction of what new AI loads will require.

China dominates both finished-unit exports and nearly half of global GOES output; it also supplies critical sub-components such as tap-changers and bushings. GOES now fall under Beijing’s 25 percent retaliatory-tariff list and new export-licence regime.

Export licensing is China’s retaliation for the US “don’t sell China chips or lithography machines” regime. I’m sure they won’t drag their feet or outright deny exports to the US, when the US has explicitly restricted “AI” chips to attempt to cripple China’s AI industry. I mean, turnabout isn’t fair play, amiright?

Thing is, China has proved very good at using what they can get, or make themselves, and they’re making fast progress on chips, with the possibility of creating a new class of chips which out-performs anything the US has looking very likely. The US, on the other hand, cannot ramp up production of transformers on any reasonable timescale.

Reap, sow. Fuck around, find out, etc.

As for AI destroying all jobs, well, no. It makes mistakes too often, and in anything that matters even a one or two percent serious error rate is unacceptable.

I, at least, will laugh myself sick when Silicon Valley gets its lunch eaten by the Chinese on AI. I mean, it’s sad, because Silicon Valley bros are so humble, never brag and never lord it over anyone else. It’s not like they’re assholes whose entire business model is based on gouging and taking value from everyone else, and it’s not like modern “AI” is based on the most vast theft of other people’s work in history.

And them Chinese, man, who do they think they are? Embracing open licenses and open standards and actually trying to make a profit, like they have real competitive markets or something? Commies can’t do Capitalism better than America!

 

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AI Will Degenerate In Much The Same Way Google Did

If you’re old enough to remember search before and after Google, you remember how good Google search was at the beginning.

Google used links to rank what to show to searchers. In the old web, before Google, every link was, in essence, an endorsement. We linked to what we thought was good, that other people should read.

It was a pristine “state of nature” system.

But the minute Google became dominant in search, everyone started manipulating links and metadata and everything else to get Google to send them more traffic. Links were no longer organic, no longer endorsements, but attempts to manipulate the algo. The more that was true, the more it became necessary to engage in “search engine optimization”, and the more algorithmic search engines sucked. Of course, Google also self-sabotaged, by trying to optimize search results so that Google would make the most money possible.

I recently read a regular traveler saying he never reads travel blogs and magazines any more, because AI is so much better. I’m sure he’s right.

But AI is better because it’s reading all the travel blogs and magazines, sorting and summarizing. AI being better, readership is cratering, and so the blogs and magazines will slowly die off. Travel’s one of those activities where you need relatively recent information, where was great to stay years ago isn’t very helpful. So, as the blogs and magazines die, the AI’s results will slowly get worse, until they’re crap scraped from official websites of hotels, museums and other travel destinations, since that’s all that will remain.

AI, in other words, in this and other ways, many of them similar, will destroy the ecosystem required for it to be good, same as Google did.

This is “eating the seedcorn/destroying the soil’s fertility” type of stupidity. If you destroy an ecosystem you’re dependent on (and we’re all dependent on some ecosystems) then whatever you’re doing is only short term viable.

So enjoy AI as an alternative to search for now (but always check its source, because it does hallucinate) but understand this is a moment in time, a moment which is destroying what makes it possible.

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Small Chinese Company Hilariously Crushes American AI

So, a Chinese financial firm (not even a software or computer company) has put out an open source AI model which is 50 times more efficient than Chat-GPT or any other American AI. It’s so simple you can run it on some phones, it doesn’t have to call home.

The sound you hear is Sam Altman screaming at the Devil as he realizes he sold his soul to become the world’s richest man, and it ain’t gonna happen.

(Faintly, in the background, the devil laughing his ass off.)

Absolutely hilarious. Oh, and they did it with a tiny team for hardly any money. Didn’t take billions. Doesn’t require massive amounts of energy.

And that whole open source thing matters: everyone else can build off their model. Deepseek, being Chinese, has some censorship in it (type Xi Jingping’s name to see it in action), but you can build your own without the censorship.

One of the interesting things is that it was built by a team of quants. Seems that the Chinese have been crushing the finance industry lately, since they saw what it has done to the West, so the Quants decided to try their hand at a bit of optimized AI code.

This chart is one of the most illustrative of Xi’s policy over the last six years or so:

Seems Xi has also figured out (as I’ve noted in the past) that billionaires suck. They form a power center outside the party and they act against the best interests of everyone in society but themselves.

Turns out that having lots of billionaire is a policy choice. The West made that choice and so did China, for a while, but when they saw how dangerous and harmful billionaires are, they reversed themselves and changed policy to crush them. They’ve even thrown them in prison. (Vietnam recently executed a mogul, though she wasn’t quite a billionaire.)

China’s CCP wants prosperity for everyone in the country. It’s the best way for them to stay in power, and hell, there’s every indication they really believe it’s the right thing to do. They’ve deliberately crushed their housing bubble and the state is moving heavily into building housing, they cracked down on exam-prep tutors, because that’s a red-Queen’s race which favors the rich and hurts everyone else, including kids. They built recreation centers just for delivery workers and forced companies to treat them better.

And they have the tech lead in about 80% of fields, plus, it appears, one more now. Just as Trump announces his five hundred billion dollar AI fund, launches his own shitcoin so people can bribe him without having to stay at one of his hotels and juices crypto, a fraudulent field which caters to the Western desire to get rich without actually doing anything useful for society.

America’s flailing around. Their only real plans is “let’s loot our vassals and satrapies”, and they’ll manage to do more of that. But it isn’t going to change America’s trajectory. It’s a failing Empire, it’s swirling the drain and nothing is going to stop that, since the actual necessary steps require policies like, y’know, slashing home prices, gutting billionaires, raising taxes on the rich, taking utilities and other public goods back into public control and so on: all the stuff no one, Trump included, wants to do.

Empires die hard, and a lot of suffering goes with that. But die the American Empire is, and will. China has already won, and they deserve to.

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The Tik-Tok Ban Is Hypocritical Nonsense

The justification for the TikTok ban is that it supposedly collects a ton of data.

TikTok’s data collection practices are insane. The app gather data that other apps normally consider off limits, including the content of users’ private messages, and the full contents of a user’s device contacts.

I agree, this is insane. But it isn’t unusual, and it isn’t even the worst in class.

That’s a lot of data – but it’s worth noting that TikTok does not seem to collect more data than other social media companies. A privacy researcher working with the Washington Post found that TikTok gathers less data than Facebook in some cases.

So it’s obviously not about data collection. As for sharing with the Chinese government, well, Google sells user data to the Chinese thru third parties.

Perhaps it has something to do with TikTok users being against genocide?

But most revealing of all is that Biden and Trump are both trying to avoid a TikTok shutdown. See, what Congress wants is the Chinese parent company to sell TikTok to an American. But TikTok has refused and has said it will shut down on the 19th.

And here Biden is saying he won’t enforce the shutdown, and Trump saying he wants to find a solution.

It’s a shakedown.

Whatever it is, it isn’t because Congress has suddenly decided to crack down on apps collecting too much user data.

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The End Of Zoom & Video Evidence

Back in February, deepfake technology was used to steal $25 million dollars:

A finance worker at a multinational firm was tricked into paying out $25 million to fraudsters using deepfake technology to pose as the company’s chief financial officer in a video conference call, according to Hong Kong police.

The elaborate scam saw the worker duped into attending a video call with what he thought were several other members of staff, but all of whom w

Open AI has tech to clone someone’s voice in instants. They haven’t released it and aren’t going to, but that will only slow the revolution.

I suspect this will mean a return to in-person meetings for any important decisions. Outside of corporations and businesses, this will include you having to physically go to your bank to move or withdraw significant amounts of money.

In court cases it may lead to a return to pre-photography evidentiary standards: do you have a witness and/or physical evidence plus a chain of custody? A picture or a video will mean nothing.

With respect to decision-making an attempt will be made to get around this by using codes and passwords, but that won’t work very well. As the modern world has proved, any password or code that’s on a computer system is not secure.

All of this means, ironically, a partial regression: electronic comms won’t be trustworthy and so will be used less.

Welcome the to the past in the future.

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GIGO: The Past of Google Search Is the Future Of LLM AI Models

If you’re old enough, you remember how amazing Google search was when it first came out and for the first few years. Excellent results, right at the top. Nowadays, it’s crap and half the time to find what I want I have to append “Reddit” or search very specific domains. (Reddit is likely to be worthless in a few years due to the IPO.)

Anyway, Google search results became crap for three main reasons, from least to most important:

  1. Worship of the official and the orthodox. Every time I search some medical issue, the top twenty sites tell me the same thing. That didn’t used to be the case, for cancer, for example, the old “cancer tutor” site would be on the first page. Maybe it’s good that the equivalent isn’t any more, but I wanted to read the alternative views as well as the orthodoxy.
  2. Monetization. Prioritizing selling ads over providing the best search results has had the effect one would expect.
  3. Organic link destruction. What made Google so good at the start is that its algo was almost entirely based on the number of incoming links a site had. Since the internet at that point was almost all human created, links were highly curated and genuine: someone had read the site, liked it and taken the time to link to it. Nowadays, most links aren’t organic: they’re SEO crap or advertising or intended to play the search algo, leading to an endless arm race. A link is no longer an endorsement and there’s no easy way around that: nothing can replace a human being reading a site, liking it, and linking to it.

Google, to put it simply, destroyed its own usefulness by destroying the internet ecosystem that had organic links, links by people who didn’t expect to be paid for them, to sites they found interesting whether those sites were official or orthodox or not.

Now, Large Language Model (LLM) AI is based off training on, basically, the entire internet. It’s essentially statistical. How good the AI is based on how good what it trained on is, with a lot of tweaking to try and point it towards stuff that isn’t horrible (not good, horrible, like avoiding racism.)

The problem is that over time more and more of the internet will be AI produces. AI will be feeding on its own output, rather than on organic human writing. It’s already been noticed that AI that eats its own dogfood tends to go nuts, and it’s fairly clear that AI is rather bland: it is a blender for what’s been done before.

So AI will, like Google, damage the very resources it needs to work well, especially since most people won’t admit that their AI content is AI, so it’s hard to avoid. It will slowly degrade over time, with some bumps of improvement as new advances are made.

Mind you LLM AI isn’t a general AI, it’s not smart, it’s just another algo. It doesn’t understand anything. Real AI will wait further advancements, if it every happens at all.

Still, enjoy it now while you can. I expect it’ll get better for two to three years, then degrade. That’s the optimistic view, there’s some evidence that the degradation is already underway.

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The TikTok Forced Sale

A bill stating that TikTok must divest or sell TikTok or stop operating in the US has passed.

Commenter KT Chong pointed out the stakes for China and the US

This ban is NOT just about protecting America from China. TikTok has global reach OUTSIDE the US. TikTok is a most popular app in over a hundred countries in the world — including in the Global South where China’s influences are steadily rising while US is facing increasing hostility due to the US complicity in Israel’s genocide of Palestinians in Gaza and ethnic cleansing in West Bank. Once the US gets its hands on TikTok, the US government will definitely use it to spread anti-China and pro-US propaganda. That is the true purpose of forcing Chinese to sell TikTok to the US, so that that US can seize/steal a most popular media tool and then use its global influences against China. I would rather TikTok just gives up its US market (i.e., banned in the US) than to hand over its global influence to the US government.

By laws, the Chinese government can block the forced sale as ByteDance (the parent company of TikTok) has to follow Chinese laws. The CCP should absolutely NOT approve the sales. This is not just business. This is but a battle in the bigger war between the US and China over global influences and the new media. TikTok should NOT be handed over to the US and then be used as tool to expand US influence in the global market. I would rather TikTok just give up on the US market rather than to hand over TikTok influences on all those overseas markets to the US. I hope China is smart enough to realize what is at stake here.

This seems reasonable to me. It would be like China saying “the US must sell or divest Apple because Apple does business in China.”

I will point out that TikTok has been notorious or famous, depending on your view, for contradicting US propaganda on many issues, most recently on Palestine. The videos are often savage, and make politicians look like fools in a way that is much easier to do in video than with writing or audio only, and they are seen by millions. “A Modest Proposal” is famous because it’s so hard to be so savage and because there was no audio recording and transmission during the Irish Potato Famine.

Another issue is that America wants to force the sale of a successful internet/social media company: the most successful in recent years, and the first to make video work on social media.

If you can’t innovate: steal.

If the US was truly just concerned about damage to users, it could simply set up rules the US subsidiary has to follow, in the same way that China has specific rules for US internet companies that apply in China, but not elsewhere.

As for the fears of all user info being turned over to the Chinese government, that’s laughable, not because it might not happen but because governments mass gobbling such data happens all the time, and because some hacker group will inevitably crack every social media company and just sell data to everyone.

Anyway, China should definitely tell the US they don’t get to force a sale of a Chinese company. While they’re too polite to do so, it really should be accompanied with the metaphorical middle finger.

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