Ian Welsh

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

Category: “AI” Page 1 of 2

Information Overlord: Houthis Roll, Hegseth Bumbles, AI Doomer Hype, Lots of Music Talk

By

On September 11, 2026

26 Comments

Nat Wilson Turner = Information Overlord = Flames Up = Phones Out = No Sense of Urgency

From me this week as Nat Wilson Turner

This week at Naked Capitalism I pulled a shift covering the Iran War and tried to connect the dots between Pete Hegseth’s Department of War and what’s going on with Meta and OpenAI.

I also continued my “Joe Biden’s Three Genocides in Four Years” series with the first installment of the Ukraine debacle.

More of what I wrote and recorded for The MMA Draw and The Let It Roll Podcast is at the bottom of this post but I wanted to feature the news links and think pieces.

What I’m Reading and Watching

The Iran War

  • The Iran War Has Just Had A Major Phase Change — Ian Welsh. On the interceptor math: the US runs out long before Iran does if Iran chooses to go all out, and hitting only three or four tankers a day was a choice rather than a ceiling.

“As I said day one of the war, the math is on Iran’s side: the US will run out of interceptors long before Iran if Iran chooses to go all out.”

Empire, and what it remembers

The AI trade

The AI Doomers really had their moment this week. I hope y’all know most of that crap is as overblown as the hype.

Money

What the heck is going on with the bond market, private equity, etc

 

Read More

Maybe Early AI Adoption Is Stupid?

By

On August 11, 2026

14 Comments

The thing about AI is that it takes previous costs (your engineers and their tools) and makes them more expensive. Often much more expensive:

if you built your saas business before ai, your entire business was designed around one assumption which was that software has ~zero marginal cost.

ai blows that up. every ai action costs money. incumbents now have to create more expensive tiers or introduce usage based pricing. both force customers to make a new purchasing decisions while revenue doesn’t automatically increase just cuz the product became more expensive to operate. so your cost per seat rises, your gross margins compress, & adoption remains uncertain.

meanwhile, the model labs are subsidizing ai usage like crazy, so they can undercut you. ai native startups are burning venture capital to acquire users, so they can undercut you too.

(lack of capitalization in original)

I really don’t know what to think of AI for coding. I’m no longer a coder, haven’t been for almost thirty years now, so I don’t have enough firsthand knowledge, though I did have an AI generate basic sorting and random number generation code just to get my hands a little wet. Among devs I trust, opinion is split. Some love it, some hate it, some are on the margins. Here’s one in the hate category:

Are companies actually seeing massive productivity gains from their AI adoption?…

… All of the AI projects we have observed as a team are failing. Every single one – we have seen 0% success in a year and a half, not only amongst projects we have been asked to participate in2, but even within projects that we have observed in passing while doing totally unrelated work. Even if you grant that AI tooling accelerates specific workloads, the method and scale of the current investments is senseless. Frequently the failure is not related to AI itself, but rather that companies are terminally bad at running software projects effectively, and as I have remarked previously, AI projects are subject to all the failure modes of normal projects plus you can get everything right and then still fail because of the method’s novelty. Very few companies are so good at shipping software that they can afford the extra risk profile…

…

our team has quickly learned while on an engagement not to ask anything about ongoing AI projects in any context – by the time that project has started, it is too late for the management team, and intervention is not possible until a crisis point is inevitably reached. There is no conceivable positive outcome. The failure rate is so high that even basic inquiry leaves us in an untenable position. Any coherent question about how it’s going, what the goal is, who is using it, constitutes an inadvertent attack on the chain of command responsible for the work because there are no good answers to anything. Even in rare cases where my interlocutor has stated that things are going well (usually while the project is still mid-flight and failure has not had a chance to manifest), it is generally obvious that they are doomed, but at least in these cases I can simply agree and then go home to scream into a pillow for six hours straight3.

All of this is to say that I am very confident that almost every report at a company about “massive AI productivity gains” is untrue as a matter of brute fact. Even if some companies are seeing clear gains, this is the exception, not the norm.

It’s a long post and the entire thing is worth reading. This is a high end engineering consultant who gets a view on a lot of companies.

My feeling/guess is that AI is not mature, that the use cases exist, but that it introduces significant risks of new failure modes because AIs aren’t reliable and aren’t actually intelligent: they don’t know what they’re doing. If you don’t do the work yourself or audit it to the level where you might as well have done it yourself, it seems easy for errors to creep in, for hard to maintain or understand code to be created, and for new failure modes to exist.

If I were an executive in most businesses I wouldn’t be using AI for much, if anything yet, though I’d let a few people have an account and test it, and would do so myself. It’s moving fast, it clearly adds risks and mistakes that we don’t know how to mitigate yet, it’s expensive and that’s with massive subsidies, so becoming dependent on it when prices are likely to increase significantly is unwise.

There are going to be exceptions: if you’re Google, not sure you have much choice. But if you manufacture widgets or sell hamburgers or build homes or are a lawyer (who can’t afford to have the AI hallucinate cites) I’d give it a pass for now, or use it very warily in exploration mode. I use it for research myself, especially as search engines get worse and worse, but I also check the sources it uses.

And, as we’ve discussed before, non open models have huge risks, since prices can easily be raised, the government can intervene to cripple the model or deny to other nations, and the company itself can make changes to the model which make it less useful to you. So even if using AI I’d be primarily focusing on Open models (which means mostly Chinese.)

But my best guess is that this is a real tech, with real uses, which is not yet near to mature and which is being deployed before people understand what it’s good at or how to use it safely and cost effectively, or, more importantly, when NOT to use it. I’d also guess that at least so far, it’s not the second coming, the next great thing, in the way that its evangelists preach.

So far it seems to increase failure rates on real projects and raise costs significantly at the same time. Unless I’m running a business where I must be in it, I think I’d take it slow.

There are very few businesses where “the way we did it in 2022” will expose you to significant risk and costs. If you’re in one of those businesses, chill a little and observe. Let other people pay the price and make the mistakes. If you need to, because it’s the current “everyone must do” just lie and say you’re into it, while doing the minimum.

This is certainly something I could be wrong about. I’m confident that Chinese AI will win, for example, I’m less certain about how useful AI will turn out to be. I do think that I’m almost certainly right that most companies adopting it in a big way, NOW, are making a mistake. Wait. See how it turns out. Let other people figure out what it’s good for, how to manage it, how to mitigate the risks and how to drive costs down.

And remember, even if it’s the true next big thing, early rushers often get badly burned, as with the dot-com bubble. Don’t buy hype, make sure what you’re investing in is real and you understand what it’s good for and what it sucks at.

What I write here is for the benefit of everyone, but alas, I live in capitalism and I, and the site, take money to keep running. If you value the writing here and can, please subscribe or donate.

Burning Down The Great Library Yet Again

By

On July 29, 2026

21 Comments

Sigh:

AI companies are bulk-buying rare books, scanning them through high-speed machines that cut the spines off, and shredding the originals. A service called ISBNdb facilitates orders of up to a million books and keeps buyers anonymous. Pre-2022 books are premium because they’re free of AI-generated text. A federal judge ruled the practice is fair use because eliminating the original means only one copy exists at a time. Anthropic hired the former head of Google Books partnerships to obtain “all the books in the world.”

My Take This got to me. A bookseller told 404 Media that rare books with almost no surviving copies are being fed into this pipeline. Books that survived wars, fires, and centuries of handling are being shredded so an AI can learn to write a better marketing email. ISBNdb’s website literally says “‘AI company destroys two million books’ is not a headline that generates sympathy,” and they still built an entire business around making it happen quietly. They offer NDAs as a feature. They coach clients to call it “digital preservation.”

I’ve covered AI companies scraping the internet, torrenting libraries, and stealing music. This is worse because it’s irreversible. You can re-upload a website. You can reprint a bestseller. You can’t replace the last three copies of an 18th-century botanical text once someone shreds them for training data. And the judge said it’s legal. So it’s going to accelerate. “We shred rare books and offer NDAs so nobody finds out” is a legitimate business model in 2026. What a timeline.

These people are barbarians. Philistines. As bad as destroying the library of Alexandria or Mongols burning libraries in Baghdad.

This knowledge is irreplaceable and it’s not worthless (if it was, they wouldn’t be scanning it.) If it were up to me this would be a capital crime. Not exaggerating for effect. Everyone involved would go for the long jump.

(To give credit where credit is due, apparently Musk does not shred books for his AI. He’s scum in many ways, but one should praise the correct actions of bad men.)

We all have a limited time here, to destroy that which could live much longer than us and speak of the past to the future is a monstrous crime.

Truly most of the people who run AI are scum.

 

What I write here is for the benefit of everyone, but alas, I live in capitalism and I, and the site, take money to keep running. If you value the writing here and can, please subscribe or donate.

America’s Losing the AI Race Hard

By

On July 21, 2026

32 Comments

Amazing stuff, and sooner than even I expected. China’s Kimi is now about equal to GPT and Claude:

For the first time, a Chinese model Kimi K3 has taken on the Frontend Code Arena and is scoring at or near the frontier on other benchmarks.

And the majors are noticing:

Meanwhile Trump is talking about banning Chinese AI. 

Alternatively, the smart lads at Open AI have a regulatory plan:

I would guess that the Trump Administration will at some point realize that their best strategy here would be to create large amounts of regulatory risk around the use of open-weight Chinese models. You don’t need to “ban open source” (one of the dumber motifs of AI policy discussion). You just need to direct every agency to issue soft law that creates FUD. “A Federal Reserve Advisory Bulletin found that there may be backdoors in Chinese AI models.” It needn’t be that well justified. You just create enough regulatory risk that every regulated enterprise backs off. You probably don’t want to create so much regulatory risk that you scare off the hyperscalers from serving Chinese models; this will just drive startups to sketchier providers. There’s a happy middle ground here. I’d assume they will do some version of this.

Even more fun, the Feds want to approve all AI releases and not allow everyone the full models.

The Trump administration has taken new steps to assert more control over the rollout of future artificial intelligence model releases by dictating which companies and entities are allowed access to the latest frontier models, two people familiar with the matter told CNBC…

….

This week, the administration launched its own program, dubbed “Gold Eagle,” aimed at collaborating with the private sector to find and fix cyber vulnerabilities.

The so-called clearinghouse would put the White House in charge of greenlighting which companies can access new AI models, according to a person familiar with the matter, who spoke on condition of anonymity in order to discuss information that is not public.

China is going to eat America’s lunch on this. If they ban Chinese AI (harder than it seems, given it’s open source) all that means is writing off the rest of the world. And since American models are handicapped, smaller American companies will be stuck with worse AI.

Since Chinese AI is far cheaper, as well, I’d expect American companies to set up subsidiaries overseas to use it, rather than be stuck with American AI.

The entire situation is a complete clusterfuck. Major companies have taken on serious debt in order to build data centers which have a lifecycle of five to seven years, and often less (since new generations of GPUs are much better.)  But the Chinese product is cheaper, open source, lacks nearly as much sovereign risk and I’ll bet multiple models will soon be about as good as Anthropic and OpenAI’s.

Where’s the business case that spending all these trillions of dollars is going to produce enough revenue from US AI to pay for all of it?

There isn’t one. It doesn’t exist.

And that means that, at least in America, this is an AI bubble. All bubbles burst and this will not be an exception. If the government bails them out it will be the last major US bailout.

This is also very likely one of the last major tech revolutions which will start in the US (which it did.) Going forward they China will produce the vast majority of them.

This is the endgame. The turning point where China obtains not just the industrial base but the absolutely undisputed tech lead. From now on China will like America in the 1950s — it’s where almost everything new is created, the dynamic center of the world, and soon people will be competing to move there, because everyone knows it is the future.

 

What I write here is for the benefit of everyone, but alas, I live in capitalism and I, and the site, take money to keep running. If you value the writing here and can, please subscribe or donate.

 

Xi Lays Out His Principles for AI Development

By

On July 17, 2026

16 Comments

 

There were rumors recently that China was going to put export restrictions on AI. That now seems… unlikely. Here are the principles Xi laid out:

First, adhering to the principle of openness and win-win cooperation while boosting innovation-driven development. Xi highlighted the importance of encouraging open-source, openness, collaboration and sharing to facilitate technological innovation, industrial development and scenario-based application of AI. (My emphasis.)

Second, strengthening risk awareness and ensuring that AI is secure and controllable. Stressing the need to ensure that AI is always under human control, Xi urged all sides to jointly oppose overstretching the national security concept in the field of AI or placing one country’s security over that of others.

Third, encouraging inclusiveness and promoting mutual learning among civilizations. AI development and its application should not erode or undermine the diversity of world civilizations or the uniqueness of cultures of different countries, according to Xi.

Fourth, advocating solidarity and improving global governance. The important role of the United Nations should be recognized, Xi said, calling for further alignment and coordination on AI development strategies, governance rules and technical standards.

I’ve predicted, for a couple years now, that Chinese AI models will be the main models used in most of the world, including in much of the West, assuming they aren’t banned outright, because they’re open and cheap. Costs of running them are about twenty times lower than the US frontier models made by OpenAI and Anthropic. They’re almost as good, and they aren’t that far behind.

The problem with US models is not just that they’re expensive (though that’s huge, there are tons of reports of AI use being cut back) but that they are CLOSED: meaning you can easily be cut off, or have prices raised, or have the model changed on you with no recourse. Open models you can adapt the model, you can run it on your own servers, or various server companies can, will and do run them for you on their servers which you rent.

It’s clear that Xi gets this, and thus that the CPC understands it as well. Open Source isn’t a liability, there’s a reason why Linux runs most of the world’s servers: closed tech is the liability. Open Source is the advantage.

Notice the second bit: on AI always being under control. I wonder if Xi is thinking of Israel and the US for military targeting and how that has possibly contributed to hitting civilian targets like schools. (Possibly because Israel and the US are run by psychopaths and I bet they’d do it anyway. But no human in the loop may make it even worse.)

The third principle is about avoiding US (and Chinese) cultural hegemony. A nice thought, and open source certainly could be adapted to different nations and cultures, so that AI models aren’t all giving the same generic results.

Finally, the fourth principle. I’ve always found it interesting just how much China plays up the United Nations. I don’t know if the respect is genuine, but the words are consistent. Honestly, I think the UN should move its main HQ out of America. America’s been pulling stunts like denying diplomats visas. Not sure if it should go to China (though if it did Shanghai or Hong Kong seem like good fits) but they’d be better stewards than the US, and in any case, if the UN is going to be in the most important great power, that’s now China. (That said, I’d favor something more neutral. Perhaps Singapore.)

China just keeps coming across as smarter, more strategic and more human than the West. It’s sad, in a way, but it is what it is.

And I remain convinced that Chinese AI will be the winner over American.

What I write here is for the benefit of everyone, but alas, I live in capitalism and I, and the site, take money to keep running. If you value the writing here and can, please subscribe or donate.

 

The Old Gray Lady Runs RussiaGate 2: They’re Coming for OpenAI

By

On July 10, 2026

12 Comments

Guest post by Nat Wilson Turner.

New York Times: "China, Russia and Others Seek to Inflame Debate Over A.I. Data Centers"

Thursday’s New York Times brings back their old RussiaGate spirit with a front page banner headline about “foreign interference” and data center opposition.

Here’s a key quote:

…a push by foreign adversaries to seize on what polls have shown is deep ambivalence — verging at times on hostility — about the spread of the data centers needed to power A.I. in the United States and elsewhere.

China, Russia and, to a lesser extent, Iran have sought to use state media outlets to turn the controversy over data centers in the United States into “a domestic fracture point,” according to a new analysis by Alethea, a threat intelligence company, which identified scores of articles and posts on social media this year.

These campaigns, whose impact on public opinion remains to be seen, have raised alarms in Washington, where A.I. is seen as a top issue heading into this year’s midterm elections.

The foreign efforts appear intended to stoke the debate over data centers that has united political figures across the political spectrum — from Senator Bernie Sanders of Vermont, a progressive, to Stephen K. Bannon, the erstwhile adviser to President Trump.

“Foreign actors aren’t manufacturing American debates over the future of A.I., they are exploiting them,” said Jessica Brandt, a former official with the Office of the Director of National Intelligence who tracked foreign influence efforts during the Biden administration.

The goal, she added, is to “deepen our divisions in order to dent our appeal and weaken us from within.”

Interesting sources, some company called Alethea and a former Biden admin DNI spook as our sources.

We’ll come back to them later, but first I’m curious as to why the NYT is only now covering this story when OpenAI put out a press release saying basically the same thing on June 10 except focused solely on China.

After all, OpenAI’s report was convincing enough to sway such luminaries as Senator Tom Cotton (R-AR), Republican Leaders on the House Energy and Commerce Committee, Rep. Brett Guthrie (R-KY), Interior Secretary Doug Burgum, The Bitcoin Policy Institute and prominent tech investor Kevin O’Leary, per WIRED.

Read More

Is China Going To Win The Humanoid Robot Race & End Capitalism As We Know It?

By

On November 18, 2025

14 Comments

Elevated from Comments. Piece by KT Chong

China is now entering the next phase of its economic-growth engine — humanoid robots.

And just like with EVs, the shift is happening fast, quietly, and with the same pattern: Chinese companies industrialize before Western analysts even realize it’s begun.

UBTech, Unitree, XPeng — they’ve all started mass-producing and delivering humanoid robots. This is not “prototype hype” or “lab demo” stuff anymore. It’s real machines getting shipped to real factories, hospitals, and even homes. China’s humanoid sector is going to be the next multi-hundred-billion-dollar growth curve, and the West is, once again, completely oblivious.

Frankly, IMO it’s already too late for the West to catch up.

Anyway, my point here today is… the Unitree G1 Ecosystem.

While reading deeper, I found something much more important: a lot of these new humanoid startups aren’t building from scratch. Instead, they’re standing on the Unitree G1 frame and layering their own proprietary AI on top. That means Unitree has quietly become the default hardware platform for China’s humanoid boom — like the Android of robot bodies.

A few examples:

1. A-Bots Robotics (Shenzhen, 2024)

• Focus: precision assembly, modular SDK

• AI layer: Baidu Ernie-ViLM for object manipulation

• Notes: 150+ units in Foxconn trials; ~$22k package; tuned for fragile electronics

2. HPDrones Tech (Guangzhou, 2023)

• Focus: warehouse logistics + drone hand-off automation

• AI layer: proprietary SLAM + multi-floor routing

• Notes: partnered with Unitree; 500-unit rollout for e-commerce warehouses in Q1 2026

3. LeRobot Labs (Beijing, 2024)

• Focus: open-source robotics + reinforcement learning

• AI layer: embodied datasets, tool-use improvisation

• Notes: hacked 20+ G1s for universities; GitHub repo exploded; expanding to eldercare

4. Weston Intelligence (Hangzhou, 2023)

• Focus: healthcare — vitals scanning, bedside conversations

• AI layer: Tencent Hunyuan conversational model

• Notes: deployed in Shanghai hospitals; sub-$20k price; measurable patient-compliance benefits

5. DexAI Dynamics (Shenzhen, 2024)

• Focus: dexterity — folding fabric, micro-adjustments, teleop self-supervision

• Notes: $80M raised; 100 units deployed in garment factories; arguably the best hands in China now

And then there’s MindOn — the one that caught my eye earlier — using the G1 frame to build a full butler/housekeeping robot (“MindOne”). One of their engineers even said they eventually want their own frame, but that’s the point: everyone is starting on Unitree first.

Unitree has locked down the humanoid robot ecosystem

All these startups — even if they eventually design their own skeletons — are still tying their early models to:

• Unitree’s frames

• Unitree’s actuator supply chain

• Unitree’s low-cost motor ecosystem

• Unitree’s software layer and APIs

Once you build your first few generations on someone else’s chassis + firmware, you’re effectively locked into their ecosystem. Switching costs explode. You’d have to rewrite half your AI stack.

So Unitree has already achieved what Western robotics companies wish they could do:

Become the default hardware substrate for an entire national robotics industry.

This is exactly how China overtook the West in EVs — standardized hardware, cheap mass manufacturing, and dozens of startups building on top of the same base.

Unitree is still a private company.

Given everything above, the most obvious question becomes: When does Unitree IPO?

On 15–16 November 2025 (literally this weekend), Unitree completed its pre-IPO regulatory tutoring with CITIC Securities — an unusually fast four-month process that normally takes 6–12 months.

The company publicly stated in September that it expects to submit the formal prospectus and listing application to the Shanghai STAR Market between October and December 2025.

Market sources still quote a targeted valuation of up to US$7 billion (≈50 billion RMB).

Once the prospectus is accepted (usually 2–4 rounds of CSRC questions), the actual listing can happen remarkably quickly in a hot sector — sometimes inside 3–6 months. A Q1/Q2 2026 listing is the base case, but a very late-2025 listing is still possible if the regulator fast-tracks it the way they have the tutoring.

What About America?

Meanwhile… America’s Great White Hope Elon Musk is already behind.

Elon Musk promised that the U.S. would lead the humanoid robot race with Tesla Optimus — but the timelines have slipped, and the window has basically closed. By the time Musk’s robot is actually ready for real-world deployment — 2 years from now? 3? — China’s robotics companies will already be deep into mass production, with tens of thousands of units deployed across factories, warehouses, homes, hospitals, and service industries.

And let’s be real — we all already know this:

Tesla will NOT be cost-competitive. Not even close.

China has already hit the sub–$20k price point for serious humanoids. Several G1-derived platforms will likely break below $15k. Meanwhile, Tesla Optimus — if it gets out of prototype limbo — will land somewhere between $20k–$40k+, before customization, localization, or integration costs. It’s the exact same pattern we saw with EVs, solar panels, drones, lithium batteries, telecom gear — the U.S. builds one expensive proof-of-concept; China builds ten factories and ships globally.

So yes, Tesla’s robot may survive inside the U.S., but only through:

• tariffs,

• import bans,

• national-security excuses,

and whatever industrial-policy tool Washington can wield.

It won’t survive on merit. It will survive on protectionism.

But step outside the U.S.?

Why would any ASEAN, Middle Eastern, African, or Latin American country buy a Tesla robot when Unitree, UBTech, XPeng, and others are offering machines that are:

• cheaper,

• and available now — not in 2027,

• generations ahead and more advanced by 2027.

You think Indonesia, Malaysia, Brazil, Mexico, Turkey, or Saudi Arabia is going to pay double the price for a worse robot just to keep Washington happy? You think they’re going to turn down a $12k Unitree or $16k UBTech because Trump tries to bully them into paying for a $35k American robot instead?

The U.S. will absolutely try to pressure, coerce, or outright threaten developing countries into “buying American” — the same way it pressures them on telecom, semiconductors, energy infrastructure, ports, and industrial policy. But this time I don’t think most countries will obey.

They have options now.

By the time the U.S. finally ships its first commercially deployable humanoids in 2–3 years, the rest of the world will already be locked into the Chinese robotic ecosystem — Unitree frames, Chinese actuators, Chinese SDKs, Chinese AI integration, Chinese supply chains.

The EU, Australia, Japan, South Korea, and Taiwan — effectively U.S. satellites — may follow Washington’s orders and switch to American robots. Maybe. If their economies in two years can still afford it.

Everyone else?

Forget it.

Forcing U.S. factories and businesses to buy “American-only” humanoid robots — which will be more expensive and less advanced — will cripple U.S. competitiveness across the board.

If American companies are stuck paying $30k–$40k per unit for less capable Tesla or U.S.-made robots, while factories in China, Malaysia, Indonesia, Brazil, Vietnam, Mexico, Turkey, and everywhere across the Global South are deploying $12k–$18k Chinese robots at scale, the cost gap between U.S. and foreign manufacturing will explode. And it won’t stop at robotics — it will cascade downstream into every single sector that depends on automation:

• logistics
• warehousing
• construction
• agriculture
• textiles
• electronics assembly
• packaging
• even retail, service, and hospitality

If U.S. firms are locked into a high-cost, low-capability robotic ecosystem while the rest of the world uses cheaper, better, faster machines, then every American industry that relies on automation gets structurally handicapped. That’s not just a disadvantage — that’s YUGE and permanent.

So Trump’s protectionism will actually accelerate the decline of U.S. manufacturing competitiveness. Because the battlefield is no longer labor cost — the battlefield is automation cost.

And China will win that fight by orders of magnitude.

This is also why I doubt even America’s closest aligned countries will follow U.S. orders when Washington eventually demands they drop Chinese robots and buy American ones. Unless they’ve developed a death wish for their own industries, they simply can’t afford to sabotage themselves like that — especially when their economies will likely be in even worse shape two years from now.

Except Europe. Europe will probably obey, because their heads are shoved so far up America’s arse they can’t even think straight — and then there’s that incessant, obnoxious demand of theirs: “You must stop be friend with Russia first or we won’t play with you!”

In my opinion China will eventually move toward some form of universal income or redistribution. Once robots replace most human labor, the state will simply “tax” robotic productivity — in whatever form it chooses — and channel that output back to the population. China can do that because the government actually has the authority, the ideology, and the political structure to redistribute.

After all, that’s the logical endgame of communism, isn’t it? A fully automated productive base supporting human welfare.

America? No such luck.

In the U.S., the elites — the top 5%, or really the top 1% — will own the robots. They’ll own the factories, the logistics chains, the land, the means of production, and the automated labor force. Everyone else below them will get… nothing. No jobs, no prospects, no future, nada. Just a growing underclass structurally locked out of the new automated economy, where human labor is obsolete and redundant.

And unlike China, the U.S. government can’t — and won’t — redistribute. It won’t tax robots because it won’t tax the ultra-rich. It won’t implement a universal income. It won’t structurally rebalance anything. The millions displaced by automation will simply be left to rot — not because the technology is bad, but because the political system is incapable of adapting to it.

And if there’s one thing I’ve learned comparing Americans and Chinese: Americans are astonishingly ideologically rigid, stubbornly wedded to outdated principles even when reality punishes them. The Chinese, by contrast, are pragmatic — willing to bend, adapt, and change. That adaptability will matter a lot when robots replace human labor and make capitalism, as we know it, obsolete.

That’s why America is panicking. They know they can’t adapt.

Ian Comments: again, China is ahead in most technologies and they have an unparalleled ability to scale. Once they scale, no one else can compete. You either find a place where you’re ahead and concentrate on staying ahead, or you find a niche. It used to be that China didn’t feel the need to be ahead in everything, but Trump, in his first time, with his sanctions, changed that. The Chinese realized they had to own full stack of everything.

One side effect of this is that Musk isn’t going to get his one trillion dollar payday. It’s based on him hitting targets, including in humanoid robots which he won’t be able to make, because Tesla’s too far behind and lacks the ability to scale.

More on the transition away from labor-distribution capitalism soon.

And great piece by KT. Thanks for letting me post it.

Why China’s Big On Open Source

By

On August 5, 2025

8 Comments

Yesterday we discussed Chinese vs. American AI. The big difference is that a lot of China’s AI is Open Source. Not just Deepseek, but:

In addition to Baidu, other Chinese tech giants such as Alibaba Group and Tencent have increasingly been providing their AI offerings for free and are making more models open source.

For example, Alibaba Cloud said last month it was open-sourcing its AI models for video generation, while Tencent released five new open-source models earlier this month with the ability to convert text and images into 3D visuals.

Smaller players are also furthering the trend. ManusAI, a Chinese AI firm that recently unveiled an AI agent that claims to outperform OpenAI’s Deep Research, has said it would shift towards open source.

Nor is it just in AI. An emphasis on open source isn’t just a private matter, it’s in the latest five year plan.

And that is makes sense. Open Source has the great advantage that it’s not subject to geopolitical risk. The US can’t cut countries off that use open source. It also has the advantage that private actors can’t squeeze you nearly as much. If you’re using proprietary tech, whoever is using it can raise prices or stop selling to you.

Moreover, non-Western customers are more likely to products built on open source, again, because it’s much freer or geopolitical or private squeeze risk.

But probably the most important thing is that Open Source and open standards speed up innovation. Anyone who wants to can build on them without paying exorbidant fees, or without simply being locked out by patent or copyright concerns. If you actually want rapid advancement in tech, and China does (the US, overall, does not) then open source makes sense. The original intention of patents was to get inventors to share, not to lock in long term profits. Patents were usually granted for relatively short terms.

The great differences between American and Chinese leadership, both private and public, is that they genuinely do think strategically and long term, and that Chinese leaders care (or, at least, in many more cases act as if they care) about China, not just their own companies or themselves. There is a unifying vision for the country, a true belief in technological advancement and a belief that technology can be used to help ordinary people. I remember seeing a cartoon on AI where in America its used to get rid of artists and writers and in China it’s used to free people up so they can be artists and writers.

Who knows if it’ll work that way, but the “Jetsons” future assumes that tech is meant to do things for us so we can enjoy life more, not so that more and more people can be made poverty stricken, and China has that spirit.

When you believe in technology and science, truly, as for the public good and not just for private profit, well, you wind up leading the rest of the world in 80% of techs.

And soon it will be 90%.

 

If you’ve read this far, and you read a lot of this site’s articles, you might wish to Subscribe or donate. The site has over over 3,500 posts, and the site, and Ian, take money to run.

Page 1 of 2

Next

Powered by WordPress & Theme by Anders Norén