”
Training an AI on copyrighted material without negotiating a payment for that material is a FEDERAL OFFENSE and, for a REGISTERED work, it is a CRIMINAL OFFENSE particularly if it is done for the purpose of profit. In addition the Statutory Damages are sufficient to bankrupt ANY firm of ANY size, including the largest (e.g. Google, Apple, etc.) when said law is violated in this fashion as the damages are PER USE and six figures PER OFFENSE.
”
Although I didn’t predict this AI, it isn’t too surprising. GoogleMind shocked the go world with AlphaGo. Kejie, the best go player in China, cried when AI beat him. His mind was blown. But Chinese programmers recovered quickly and came out with several of their own powerful go playing AIs.
But the shocking thing is the DeepSeek claims they only spent $5.6 million building their model. American tech giants are claiming they need tens of billions. A lot of that money would have gone into energy.
In other words, DeepSeek is claiming a 99.99% efficiency improvement. That’s newsworthy.
That’s largely because the Chinese are using the infrastructure developed with those billions of dollars, and are pirating the data with which deepseek operates. Nothing new here.
No, the big cost is the chips and the energy to run the chips. That’s why NVidia’s stock got hammered today.
DeepSeek will have used their own farm or paid for someone else to run their training. There’s nothing to steal here.
On the energy side, one possibility is that they were piggybacking on solar Bitcoin miners. On the one hand the Musk side of the Trump presidency is pushing Bitcoin, but on the other hand Beijing is cracking down. Bitcoin miners have built huge solar farms in Chinese Central Asia. So if they have excess capacity that could explain the energy side.
Hard times for Bitcoin miners could also explain where they got the chips. GPUs are use for coin mining and AI, as well as for their original use, fancy graphics.
The timing seems odd though.
About the idea that the Chinese steal everything from the West, I worked for Taiwanese companies in the 1990s, when they were taking the PC mainboard market away from American manufacturers. This is what I noticed at the time: It is often said that cheap labor is on reason why Asian companies excel. There is some truth in that. But it isn’t just sweatshop workers. Cheap engineers are the reason it is so hard to compete with emerging markets on technology. They aren’t better or worse or more or less prone to stealing ideas than expensive engineers, but there are a lot more of them. Put ten decently trained engineers on your mainboard project full time and chances are you’ll outcompete a company that can only afford two or three.
I appreciate the comments. Although not in the position to add to much, I would say it would be wrong to underestimate the intelligent people that must be behind both making the physical chips and also the software. Extrapolating expertise and knowledge. AI works very well in some applications though – just talking from personal experience.
Apparently AIs are often used in thesises and such now, but also in research grant applications, perhaps one would need an AI to examine those to find them?
Preferably a different one than the one writing it…
(But on the other hand, if it´s a good idea but you´re a poor writer, it might be a good thing to use?)
Interesting times for sure, have some NVIDIA graphics boards but no position, luckily.
There’s really nothing novel or good about LLMs as they are. The Chinese ones being more efficient just means we can kill the private equity and venture capital firms dumping hundreds of billions into this stupid bubble to get rid of workers via shitty chatbots.
NVIDIA is up today, but for how long? Literally the only stocks doing well are the Big Tech ones that are in on this crazy fad because they literally have no other growth potential revenue streams on the horizon.
The ugly face of reality. Ugly if you’re an elephant, dolphin or human.
COAL CONTINUES TO DOMINATE CHINA’S ENERGY LANDSCAPE
• China’s thermal power generation, primarily fueled by coal, reached a record high in 2024 despite a surge in renewable energy installations.
• Coal consumption continues to grow in China’s electricity sector, driven by increasing power demand and the need for a reliable baseload power source.
• China’s coal imports and domestic production are expected to rise further in 2025, solidifying coal’s role as the backbone of the country’s energy system.
“Coal consumption in the electricity sector continues to grow and so are China’s production and imports. The persistent growth in Chinese coal demand, including for power generation, goes to show that coal remains the baseload of China’s power system to back up the surge in renewables and will stay such for years to come as power demand jumps with the increasing electrification of homes and transport.
The Chinese growth in coal consumption defies previous views that coal use is peaking in the world’s biggest consumer of the fossil fuel.”
Yeah, the market is very frothy. NVidia lost $1.2 trillion at one point, but bounced back.
Deepseek claims it was using nerfed NVIDIA chips they bought for coin mining and stock market trading. Nerfed because the US government doesn’t allow NVidia to export the highest end chips to China.
This reminds me of the 1970s when the American government kept gas cheap but Japan taxed it heavily. So Japanese companies built fuel efficient cars and American companies built terrible inefficient cars (The 70s really were the low point of American cars.) Then there was a oil price spike and the Japanese hammered the American car (and motorcycle) industry.
Some day the western world will actually learn to respect the Chinese, and others in the area.
The disadvantages they have had relative to Europeans have been erased.
Highly liked that they vast majority of the worlds AI enabled robots to be deployed over the the next 10-20 years will be coming from China (with and without weaponry options).
There are certainly possible problems with AI, but it seems like the Chinese have made a very positive contribution here: they appear to have reduce the cost and energy input of their AI by about 1,000 to one.
Ideally that’s what happens with lots of nations competing: they produce proportionately more value.
With respect to Trump’s taking virtually all departments to the woodshed: On the one hand all organizations – when not pruned on a regular basis the tend to accumulate excess fat – but on the other hand his clearly vindictive and red meat baiting way of going about things is not about increasing efficiency and effectiveness but about revenge and pacifying some of his base. So it is possible that at the end government may be more rational ( when closing ones eyes to blatant grift) and in better shape.
Trying to be optimistic here so please have mercy…..
It may in the end be good for the environment because the end result may be a Worldwide Depression, the $25/b prediction of HHH may soon come to pass, but not for the specific reasons he claimed, just from an unchecked lunatic in the White House making very bad decisions leading to chaos and a crash in the World Economy.
This recent US election may disprove the old adage that Democracy is the worst form of government, except for all the others.
I’m actually impressed Trump is beating even my expectations in dismantling America. I know him and Musk talked about crashing the economy. I just thought it was going to be in months, not days at this rate.
It’s perversely refreshing to see direct action so quickly form this way. Like the executive has remembered they can do stuff. Unfortunately, that stuff is “move fast and break things” at a national level.
The rightwards lurch seems to be a global one, not just a US one. I suspect that part of that is driven by ever increasing inequality. Part of that is because of compounding – once you have some capital and invest it in something with a positive expected return you can’t help but watch your pile grow. The other component though is that the ones with the marbles make the rules so the table gets tilted and tilted more and more. I suspect that the combination of this is causing things to get a boiling point globally. And an uneducated and uninformed population only speeds up that process. Watching the pot boil over is not going to be fun.
I wonder if the voters who put him in will someday realize that they enabled a massive escalation in the wealth gap. Perhaps that is expecting a little too much insight from that crowd.
“Watching the pot boil over is not going to be fun.” Indeed.
The confluence of kleptocracy, immunity from justice, AI disruption of job markets, heavily indebted government, and social media is an extremely nasty set up.
“Kleptocracy (from Greek κλέπτης kléptēs, “thief”, or κλέπτω kléptō, “I steal”, and -κρατία -kratía from κράτος krátos, “power, rule”), also referred to as thievocracy, is a government whose corrupt leaders (kleptocrats) use political power to expropriate the wealth of the people and land they govern, typically by …”
Humans seem to have a dynastic gene. It seems to me that a pretty fair way to level the playing field is to have a significant inheritance tax. We’re all born naked and for one person to have a crapload of money, with all the advantages that come along with it, and other baby to not have that advantage is fundamentally unfair. But – those with the marbles make the rules so it is unlikely that that that dynastic aspect of the tax code will be addressed by either party.
The US does have to a fair degree a uni-party. Clearly there are differences between them, one is more humane than the other but fundamentally its about the haves vs the not-haves. Look at the isolationist tendencies of Trump I. Biden left most of the tariffs in place and by implementing the IRA is reducing dependence on other countries – whether you call than independent or isolationist is a separate question; it’s a good thing from an isolationist perspective but how does this help from a “building a global community” POV? Trump II is likely going to be even more isolationist (channeling Peter Zeihan here) . The US has less and less of a the need to patrol sea-lanes to keep oil imports safe, and as the US becomes less and less dependent for other goods from other (Mexico and Canada are the exception) countries the less of an incentive there is for the US to play local policeman. But is that good or bad, and for whom?
/rant off
I see things much the same way.
I’ll add that the great advantage the US has had since ww2 with the dollar as the reserve currency of the world is going to be fading more quickly over the next 10 years.
Isolationism, cyptomemes, tariff escalation, bully diplomacy are examples of voluntary measures that undermines the moat that has so very much benefited this nation.
Dennis,
Bond yields in China at or lower than those in Japan have absolutely zero to do with Trump. Auto sales in Europe being almost 50% lower than there all time highs has absolutely nothing to do with Trump.
Global economy is absolutely shitty. The US economy while better than the global isn’t anywhere near as strong as we have been lead to believe it is. Over the last few years.
Which is exactly why Trump is in office.
The ship is going to sink regardless of what Trump does or doesn’t do.
China is on the verge of an all out banking crisis. On par or worse than the US in 2008-2009.
Can China handle 60% tariffs? Hell no!!!
China also can’t agree to what Trump sees as leveling the playing field.
The AI bubble might be popping.
https://www.ft.com/content/e670a4ea-05ad-4419-b72a-7727e8a6d471
It would be interesting if cheap Chinese AIs were the cause.
The AI Hype left out that these algorithms have been around since the 1970s.
What has changed is Moore’s Law, Big Data Architectures (universal 64-bit and cheap disk space) and an Internet full of training data.
AI has not demonstrated a sustainable business model, and companies are paying out the WAZOO for the data centres
https://market-ticker.org/akcs-www?post=252731
KD is always worth a listen on computing. He started one of the first internet companies MCSNet.
He is a climate change denier. Just ignore that.
He says DeepSeek changed their numeric variables from 32 bytes to 8 bytes therefore getting a 75% reduction in memory usage and processing.
They also only load modules when their expertise is “needed” unlike the big monolithic AI competitors.
The code is now open source, so the cat is out of the bag.
Many companies are fooked!
READ THE COMMENTS SECTION for TickerGuy (that is Karl)……he reveals a lot of this debacle.
”
Training an AI on copyrighted material without negotiating a payment for that material is a FEDERAL OFFENSE and, for a REGISTERED work, it is a CRIMINAL OFFENSE particularly if it is done for the purpose of profit. In addition the Statutory Damages are sufficient to bankrupt ANY firm of ANY size, including the largest (e.g. Google, Apple, etc.) when said law is violated in this fashion as the damages are PER USE and six figures PER OFFENSE.
”
Look out below!
Trump’s plan is actually Putin’s plan. Huh.
https://www.newsweek.com/donald-trumps-100-day-ukraine-peace-plan-leaked-report-2021215
Government under the control of a nation’s worst or least-qualified citizens.
Kakistocracy is a term that describes a government run by the worst people. It comes from the Greek words kakistos (worst) and kratos (rule).
And never was a country more deserving.
I think Kaka also means shit.
Yes, from ancient Greek kakos, bad, literally shitty.
Seems to have several similarities to the broken Minsk agreements from quite some time ago, but broken by whom you would perhaps ask?
Nobody is too focused on being right or wrong in the end it seems. It reminds me of a truce, Korea war style.
Warfare is costly in all aspects like non productive industrial output to human lives and wellbeing.
even gas price dropped 10% amid winter storm from US and Deepseek
Although I didn’t predict this AI, it isn’t too surprising. GoogleMind shocked the go world with AlphaGo. Kejie, the best go player in China, cried when AI beat him. His mind was blown. But Chinese programmers recovered quickly and came out with several of their own powerful go playing AIs.
But the shocking thing is the DeepSeek claims they only spent $5.6 million building their model. American tech giants are claiming they need tens of billions. A lot of that money would have gone into energy.
In other words, DeepSeek is claiming a 99.99% efficiency improvement. That’s newsworthy.
That’s largely because the Chinese are using the infrastructure developed with those billions of dollars, and are pirating the data with which deepseek operates. Nothing new here.
No, the big cost is the chips and the energy to run the chips. That’s why NVidia’s stock got hammered today.
DeepSeek will have used their own farm or paid for someone else to run their training. There’s nothing to steal here.
On the energy side, one possibility is that they were piggybacking on solar Bitcoin miners. On the one hand the Musk side of the Trump presidency is pushing Bitcoin, but on the other hand Beijing is cracking down. Bitcoin miners have built huge solar farms in Chinese Central Asia. So if they have excess capacity that could explain the energy side.
Hard times for Bitcoin miners could also explain where they got the chips. GPUs are use for coin mining and AI, as well as for their original use, fancy graphics.
The timing seems odd though.
About the idea that the Chinese steal everything from the West, I worked for Taiwanese companies in the 1990s, when they were taking the PC mainboard market away from American manufacturers. This is what I noticed at the time: It is often said that cheap labor is on reason why Asian companies excel. There is some truth in that. But it isn’t just sweatshop workers. Cheap engineers are the reason it is so hard to compete with emerging markets on technology. They aren’t better or worse or more or less prone to stealing ideas than expensive engineers, but there are a lot more of them. Put ten decently trained engineers on your mainboard project full time and chances are you’ll outcompete a company that can only afford two or three.
Alimbiquated
I appreciate the comments. Although not in the position to add to much, I would say it would be wrong to underestimate the intelligent people that must be behind both making the physical chips and also the software. Extrapolating expertise and knowledge. AI works very well in some applications though – just talking from personal experience.
Apparently AIs are often used in thesises and such now, but also in research grant applications, perhaps one would need an AI to examine those to find them?
Preferably a different one than the one writing it…
(But on the other hand, if it´s a good idea but you´re a poor writer, it might be a good thing to use?)
Interesting times for sure, have some NVIDIA graphics boards but no position, luckily.
There’s really nothing novel or good about LLMs as they are. The Chinese ones being more efficient just means we can kill the private equity and venture capital firms dumping hundreds of billions into this stupid bubble to get rid of workers via shitty chatbots.
NVIDIA is up today, but for how long? Literally the only stocks doing well are the Big Tech ones that are in on this crazy fad because they literally have no other growth potential revenue streams on the horizon.
The ugly face of reality. Ugly if you’re an elephant, dolphin or human.
COAL CONTINUES TO DOMINATE CHINA’S ENERGY LANDSCAPE
• China’s thermal power generation, primarily fueled by coal, reached a record high in 2024 despite a surge in renewable energy installations.
• Coal consumption continues to grow in China’s electricity sector, driven by increasing power demand and the need for a reliable baseload power source.
• China’s coal imports and domestic production are expected to rise further in 2025, solidifying coal’s role as the backbone of the country’s energy system.
“Coal consumption in the electricity sector continues to grow and so are China’s production and imports. The persistent growth in Chinese coal demand, including for power generation, goes to show that coal remains the baseload of China’s power system to back up the surge in renewables and will stay such for years to come as power demand jumps with the increasing electrification of homes and transport.
The Chinese growth in coal consumption defies previous views that coal use is peaking in the world’s biggest consumer of the fossil fuel.”
https://oilprice.com/Energy/Coal/Coal-Continues-to-Dominate-Chinas-Energy-Landscape.html
“Accused of Sexual Assault, Drunkenness, and Financial Mismanagement, New Defense Head Is Confirmed”
Trump people are put in charge
Not one to stay glued to the stock market ticker, but NVidia’s market valuation fell by about $800,000,000,000 yesterday.
All the way back down to where they were 4 months ago.
Yeah, the market is very frothy. NVidia lost $1.2 trillion at one point, but bounced back.
Deepseek claims it was using nerfed NVIDIA chips they bought for coin mining and stock market trading. Nerfed because the US government doesn’t allow NVidia to export the highest end chips to China.
This reminds me of the 1970s when the American government kept gas cheap but Japan taxed it heavily. So Japanese companies built fuel efficient cars and American companies built terrible inefficient cars (The 70s really were the low point of American cars.) Then there was a oil price spike and the Japanese hammered the American car (and motorcycle) industry.
Unexpected consequences.
Some day the western world will actually learn to respect the Chinese, and others in the area.
The disadvantages they have had relative to Europeans have been erased.
Highly liked that they vast majority of the worlds AI enabled robots to be deployed over the the next 10-20 years will be coming from China (with and without weaponry options).
There are certainly possible problems with AI, but it seems like the Chinese have made a very positive contribution here: they appear to have reduce the cost and energy input of their AI by about 1,000 to one.
Ideally that’s what happens with lots of nations competing: they produce proportionately more value.
“Let us not talk falsely now
The hour is getting late”
—Bob Dylan
With respect to Trump’s taking virtually all departments to the woodshed: On the one hand all organizations – when not pruned on a regular basis the tend to accumulate excess fat – but on the other hand his clearly vindictive and red meat baiting way of going about things is not about increasing efficiency and effectiveness but about revenge and pacifying some of his base. So it is possible that at the end government may be more rational ( when closing ones eyes to blatant grift) and in better shape.
Trying to be optimistic here so please have mercy…..
Weekendpeak,
It may in the end be good for the environment because the end result may be a Worldwide Depression, the $25/b prediction of HHH may soon come to pass, but not for the specific reasons he claimed, just from an unchecked lunatic in the White House making very bad decisions leading to chaos and a crash in the World Economy.
This recent US election may disprove the old adage that Democracy is the worst form of government, except for all the others.
I’m actually impressed Trump is beating even my expectations in dismantling America. I know him and Musk talked about crashing the economy. I just thought it was going to be in months, not days at this rate.
It’s perversely refreshing to see direct action so quickly form this way. Like the executive has remembered they can do stuff. Unfortunately, that stuff is “move fast and break things” at a national level.
The rightwards lurch seems to be a global one, not just a US one. I suspect that part of that is driven by ever increasing inequality. Part of that is because of compounding – once you have some capital and invest it in something with a positive expected return you can’t help but watch your pile grow. The other component though is that the ones with the marbles make the rules so the table gets tilted and tilted more and more. I suspect that the combination of this is causing things to get a boiling point globally. And an uneducated and uninformed population only speeds up that process. Watching the pot boil over is not going to be fun.
I wonder if the voters who put him in will someday realize that they enabled a massive escalation in the wealth gap. Perhaps that is expecting a little too much insight from that crowd.
“Watching the pot boil over is not going to be fun.” Indeed.
The confluence of kleptocracy, immunity from justice, AI disruption of job markets, heavily indebted government, and social media is an extremely nasty set up.
“Kleptocracy (from Greek κλέπτης kléptēs, “thief”, or κλέπτω kléptō, “I steal”, and -κρατία -kratía from κράτος krátos, “power, rule”), also referred to as thievocracy, is a government whose corrupt leaders (kleptocrats) use political power to expropriate the wealth of the people and land they govern, typically by …”
Humans seem to have a dynastic gene. It seems to me that a pretty fair way to level the playing field is to have a significant inheritance tax. We’re all born naked and for one person to have a crapload of money, with all the advantages that come along with it, and other baby to not have that advantage is fundamentally unfair. But – those with the marbles make the rules so it is unlikely that that that dynastic aspect of the tax code will be addressed by either party.
The US does have to a fair degree a uni-party. Clearly there are differences between them, one is more humane than the other but fundamentally its about the haves vs the not-haves. Look at the isolationist tendencies of Trump I. Biden left most of the tariffs in place and by implementing the IRA is reducing dependence on other countries – whether you call than independent or isolationist is a separate question; it’s a good thing from an isolationist perspective but how does this help from a “building a global community” POV? Trump II is likely going to be even more isolationist (channeling Peter Zeihan here) . The US has less and less of a the need to patrol sea-lanes to keep oil imports safe, and as the US becomes less and less dependent for other goods from other (Mexico and Canada are the exception) countries the less of an incentive there is for the US to play local policeman. But is that good or bad, and for whom?
/rant off
I see things much the same way.
I’ll add that the great advantage the US has had since ww2 with the dollar as the reserve currency of the world is going to be fading more quickly over the next 10 years.
Isolationism, cyptomemes, tariff escalation, bully diplomacy are examples of voluntary measures that undermines the moat that has so very much benefited this nation.
Dennis,
Bond yields in China at or lower than those in Japan have absolutely zero to do with Trump. Auto sales in Europe being almost 50% lower than there all time highs has absolutely nothing to do with Trump.
Global economy is absolutely shitty. The US economy while better than the global isn’t anywhere near as strong as we have been lead to believe it is. Over the last few years.
Which is exactly why Trump is in office.
The ship is going to sink regardless of what Trump does or doesn’t do.
China is on the verge of an all out banking crisis. On par or worse than the US in 2008-2009.
Can China handle 60% tariffs? Hell no!!!
China also can’t agree to what Trump sees as leveling the playing field.
HHH,
Yes current conditions likely have little to do with Trump. I expect his policies will make the World Economy far less strong. We will see.
Here’s an interesting video on the unexpected consequences of releasing vast quantities of carbon into the atmosphere.
https://www.youtube.com/watch?v=Lxfpgqn6NOo