Dylan Patel: belief

Transcript context

…I think we need to make a point clear on why the time is now for people that don’t think about this, because essentially, with export controls, you’re making it so China cannot make or get cutting edge chips. And the idea is that if you time this wrong, China is pouring a ton of money into their chip production, and if you time it wrong, they are going to have more capacity for production, more capacity for energy, and figure out how to make the chips and have more capacity than the rest of the world to make the chips. Because everybody can buy… They’re going to sell their Chinese chips to everybody, they might subsidize them. And therefore, if AI takes a long time to become differentiated, we’ve kneecapped the financial performance of American companies. NVIDIA can sell less, TSMC cannot sell to China. So therefore, we have less demand to therefore… To keep driving the production cycle. So that’s the assumption behind the timing being [inaudible 01:22:43]. Less than 10 years or 5 years to above. China will win because of these restrictions long-term, unless AI does something in the short-term, which I believe AI will make massive changes to society in the medium, short-term. And so that’s the big unlocker there. And even today, if Xi Jinping decided to get “scale-pilled”, IE, decide that scaling laws are what matters, just like the US executives like Satya Nadella and Mark Zuckerberg and Sundar and all these US executives of the biggest, most powerful tech companies have decided they’re scale-pilled and they’re building multi-gigawatt data centers, whether it’s in Texas or Louisiana or Wisconsin, wherever it is, they’re building these massive things that cost as much as their entire budget for spending on data centers globally in one spot. This is what they’ve committed to for next year, year after, et cetera. And so they’re so convinced that this is the way that this is what they’re doing. But if China decided to, they could do it faster than us, but this is where the restrictions come in. It is not clear that China as a whole has decided from the highest levels that this is a priority. The US sort of has. You see Trump talking about DeepSeek and Stargate within the same week. And the Biden admin as well had a lot of discussions about AI and such. It’s clear that they think about it. Only just last week did DeepSeek meet the second in command of China. They have not even met the top, they haven’t met Xi, Xi hasn’t set down, and they only just released a subsidy of a trillion RMB, roughly $160 billion, which is closer to the spending of Microsoft and Meta and Google combined for this year. So they’re realizing it just now. But that’s where these export restrictions come in and say, “Hey, you can’t ship the most powerful US chips to China. You can ship a cut-down version. You can’t ship the most powerful chips to all these countries who we know are just going to rent it to China. You have to limit the numbers.” And the tools.…

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