Share this postEmerging Market SkepticEmerging Market Links + The Week Ahead (February 3, 2025)Copy linkFacebookEmailNotesMoreEmerging Market Links + The Week Ahead (February 3, 2025)Why big techs didn’t use the DeepSeek approach, China’s infrastructure dead-end, Taiwan's close connection with US mortgage rates, EM stock picks and the week ahead for emerging markets.Feb 03, 20251Share this postEmerging Market SkepticEmerging Market Links + The Week Ahead (February 3, 2025)Copy linkFacebookEmailNotesMore2Share

More DeepSeek analysis (and fallout) with Momentum Works having two interesting pieces (No Bullshit takeaways from China’s AI trenches: Why DeepSeek scares and excites everyone and a very lengthy and much more technical piece Why big techs didn’t use the DeepSeek approach) with the first takeaways piece making a couple of interesting points:

• DeepSeek is the first LLM chatbot our friends find usable on a daily basis: it is fast and demonstrates the full reasoning process. In comparison, ChatGPT is slow, hallucinating, poor in real-time online search, and often too conservative in its response… [I will also start using DeepSeek to help with research or checking some facts for this Substack]

• …There is enough engineering, operations, and business talent in China to allow DeepSeek to continuously build on. A related point is that DeepSeek’s team employs young engineers rather than big shots—its star engineer (a 29-year-old woman) was poached by Xiaomi with a >4X salary increase, causing no impact on DeepSeek’s ability to carry on…

• …It is unlikely that DeepSeek will cause deflation of demand for NVIDIA and others’ chips. While DeepSeek has plausibly proven that the demand for training compute should not be as high as previously thought, it also shows reasoning that might end up consuming a lot more computing power...

The second (lengthy and more technical) piece sort of missed the elephant in the room e.g. the sheer amount of corruption/grifting + politics (DEI hiring, the need to use/hire politically connected or in favored people/groups/companies, etc.) that any Big Tech-US government relationship inevitably has these days. Trump will need to address the corporate-government rot (something that Empress Dowager Cixi failed to do in China over 100 years ago…) in the USA before throwing more taxpayer money/incentives at AI or AI related projects…

Finally, the archive.today site seems to be malfunctioning or not accepting new URL saves late this evening Asia time.