Happy Dragon Boat Festival to all who celebrate. Late lunch and fun fact. Been coming here for years. Six months ago they started including English to the menu.

Since I’ve been challenged with uploading videos am posting this note here. A tad long but highly relevant to the current AI discourse. Also @gladstein tagging you as I believe Chinese open source models is a focus of yours. Hit me up if you want to have a conversation. China Morning Missive Another DeepSeek “Moment” Well, here we are. Last week ends with Anthropic pulling Fable 5. Now, just hours ago, the Trump administration confirms that DeepSeek and dozens of other Chinese firms will not be added to the Entity List. Much will be obviously made of that decision and yet this decision wasn’t even the most consequential announcement made today when it comes to the ongoing AI rivalry between American and China. What could prove to be a major breach is the Microsoft announcement that it will be shifting its AI enabled assistant, Copilot, from flat-rate subscriptions to usage-based pricing. An obviously necessary move for a platform whose users were burning through compute faster than any subscription fee model could absorb. Expected. What was not expected came next: Microsoft stated that it was exploring the adoption of DeepSeek V4 to support a lower-cost option for users. There was no commitment mind you, but the mere admission that a lower cost option was required and that a Chinese open source LLM was being considered defines where the AI contest between American and China now stands. Benchmark rankings among the American frontier models are no longer the primary variable in driving global adoption. Price for performance is now the priority and on that measure the hyperscalers, not only their users, are adjusting behavior in real time. If Microsoft is having to reach for a Chinese open-source model to maintain adoption for its flagship assistant, the benchmark wars may have already been settled. None of this should surprise anyone who watched the two countries diverge in how AI ambitions were defined. America set out to build God in a box, indifferent to the cost to meet the buildout of infrastructure or the demand for compute, so long as the markets keep funding the activity. No one asked whether a scalable product-market fit existed. No one, at least so far, has cared. China set a different objective: not scalability alone but applicability and – critically – how AI could be deployed across industry to widen the manufacturing moat. What isn’t discussed enough is the degree to which China’s models have already been integrated throughout the economy. Even the decision to remain committed to an open-source strategy has delivered the competitive advantage of iterative speed. Each of the various players in China are leveraging the gains achieved by one model to advance their own model. It is for this very reason why there seems to be a new and improved Chinese LLM coming to market every single week. The American obsession continues to produce models that myopically measure success through benchmarks even if their models are cash infernos with no end in sight. The Chinese discipline produces models cheap enough to support global adoption that is so attractive as to pull the attention of a leading American hyperscaler. Here, however, is the message which needs to be conveyed. You cannot be a little bit pregnant, and China is winning the race for global AI adoption. American policymakers and corporate executives either take on China with serious intention or admit there is no political courage (or financial bandwidth) to do what is necessary and be done with the façade. Make no mistake, the capability to address the challenge is well within American reach. The question is whether anyone has the stomach to do what is necessary and make the hard choices.

Was extremely confident that Beijing was playing a leading role in the US/Iran process ever since Islamabad was anointed as intermediary. This MOU demonstrates just how heavy a hand Beijing has played in the process and, critically, the structure of the outcome. Here 2 — The United States of America and the Islamic Republic of Iran undertake to respect each other's sovereignty and territorial integrity, and to refrain from interfering in each other's internal affairs. And here 14 — The final deal will be endorsed by a binding UNSC resolution

I give it three years before CXMT ranks nearer the top of the DRAM market.

Tom

Chinese memory brands ditch Samsung and Micron for homegrown CXMT and YMTC silicon — Corsair, HP, and Dell are already adopting the China-produced DDR5 chips

Some Chinese module makers are turning their backs on the big three RAM suppliers.

Perhaps not directly tied to last week’s removal of Fable 5, but it is becoming increasingly clear that the performance benchmarks among the American frontier models aren’t the primary variable when it comes to broad, global AI adoption. Earlier today it was announced that Microsoft is considering Deepseek for a lower cost Copilot alternative. Then came this news here that the US government has made the decision to forgo adding Deepseek to its ever expanding “entity list”. You can’t be a little bit pregnant and American policy makers either need to take on China with serious intention or accept that there isn’t the political courage to do what is necessary and be done with the whole façade.

CNBC

U.S. holds off blacklisting China's DeepSeek, more than 100 firms deemed security risks

DeepSeek, CXMT and other companies were approved by an interagency committee last year for addition to the Commerce Department's Entity List.

That didn’t take long. My vocal critique last week of “Allied Scale” is already facing its first real test and the prospect isn’t looking good at all. If an American-led coalition can’t overcome the issue of rare earths what then of the hundreds, if not thousands, of other Chinese dependencies facing the G7 nations and their collaborators? https://www.reuters.com/world/americas/trumps-critical-minerals-pricing-plan-faces-skeptical-g7-divided-industry-2026-06-15/

Anthropic is Dependent on China. So, am trying something new here. Rather than a long winded “China Morning Missive” thought I’d convert it all into a short video. This is my first attempt. Feedback, no matter how brutal, is not just welcome but desired.

Well, once again we have the Law of Unintended Consequences playing out for the whole world to see. Zhipu surges 33% as Wall Street raises bets on China AI after Anthropic curbs

CNBC

Zhipu surges 33% as Wall Street raises bets on China AI after Anthropic curbs

Shares of Chinese AI model developer Zhipu surged as Wall Street banks raised bets on the company's ability to capture global AI demand.

I’ve been asked increasingly about the usage of VPNs in China. Allow me to share with you the policy in the clearest possible way. What is the first rule of Fight Club?

So I see that my compatriot Americas remains blissfully distracted by Bread and Circuses. You’d think that after some 2,000 years the lesson would have been learned. But hey, there’s still a cage match upcoming at the White House.

My wife amazes me. She headlined a massive yoga event last night. Brought out her unique style. The crowd of +200 went WILD.

So on the topic of Fable 5, what happens to all the in-house Chinese engineers working that essentially built the Anthropic and OpenAI models? Logic based on the government directive would mean none of those individuals would be permitted to any further work.

This never gets old. Have a great weekend all.

Such steak differences. Here we have China’s approach to a nationwide AI roll out and then you have OpenAI preparing for a massive IPO and all other American groups tapping capital markets left right and center.

MSN

For those of you interested in the whole DRAM and NAND flask industries, this article below is a fantastic overview of the play being made by China’s two primary competitors. And here is my favorite quote from the article. “Despite such progress, analysts generally believe the immediate threat to Korean companies remains limited.” Cannot tell you how many times I’ve heard others make a similar statement (different industries) only to get their heads handed to them two years later. https://www.koreatimes.co.kr/business/companies/20260606/chinese-memory-firms-edge-closer-to-challenging-koreas-chip-giants

“Remember remember the fifth of November.” Bitcoin caps a dismal week as price wallows 50% below its all-time high

CNBC

Bitcoin cracks $60,000, sinking to lowest level since October 2024

The weeklong sell-off was exacerbated after a stronger-than-expected May jobs report Friday sent yields higher and pressured risk assets.

Saw somewhere here that more short videos were needed to build adoption. Decided to play along.

The definition of asymmetric soft power in action. Is it even a race anymore? Elon has to be apoplectic. Unitree robots on America primetime television. Basically a sponsorship on American TV. China’s ability to figure out ways to game the American system never ceases to amaze me. And this comes on top of Nvidia this week picking Unitree for its “physical AI” platform. Company also expected to go public on a months time.

Yahoo Entertainment

Unitree's Human-Like Dancing Robots Amaze Judges on 'America's Got Talent' Season 21

The judges can’t believe their eyes as Unitree robots dance perfectly across the stage to 'Abracadabra' by Lady Gaga.

China Morning Missive – Nvidia Pushes the Envelope Well, this is one way to square the circle. If you can’t sell your chips to China, then you might as well bring China to your chips, your most advanced chips I might add. While not the perfect analogy to make, it still came as a surprise to a great many when Nvidia announced that it would be partnering with Chinese robotics heavyweight Unitree for its “physical AI” platform. It should be noted that the company did follow up on that announcement with claims that it would also be working with robotic companies in American, Europe and South Korea. Granted, no names were provided in the revised press release. The wordsmith applied in the press release is laudable. Unitree was said to provide only the “chassis” whereas Nvidia would be providing the Jetson Thor “hardware”. I’m not entirely certain that a miniature motherboard counts as hardware in this context when your partner is literally delivering the required physical delivery platform. You’ve all heard me say this numerous times; what China did to the global EV market is no ongoing with the humanoid robotics market. This time it’ll just be faster.

CNBC

Nvidia picks Unitree for humanoid robot platform as Chinese startup eyes IPO

The U.S. chipmaker's first publicly available humanoid robotics system will use humanoids from Chinese startup Unitree.

Robert Frost has always been right and with that these are the times when legends are born.