Prof G Markets How China’s AI Efficiency Could Gut the U.S. Economy
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Oct 27, 2025 Hosts delve into China's impressive AI efficiencies and their potential to disrupt the U.S. market with lower-cost large language models. They discuss the rising demand for private security in response to high-profile crimes, linking this to growing wealth inequality. The conversation shifts to Warner Bros. Discovery's potential sale, debating whether the bidding war is genuine or a strategic illusion. As they analyze upcoming tech earnings and the Fed's decisions, they highlight the fierce competition between U.S. branding and Chinese efficiency in the evolving tech landscape.
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China’s Efficiency-First AI Play
- China is optimizing AI for efficiency, not just raw performance, to reduce energy and GPU needs.
- That approach can undercut expensive U.S. models and change the competitive landscape.
Old Navy Strategy Applied To AI
- Scott argues China may flood markets with cheaper near-premium LLMs to erode U.S. AI valuations.
- That tactic targets shareholder-dependent sectors and could depress U.S. market confidence.
Stark Cost Gap Between Chinese And US Models
- Chinese models report dramatically lower costs per million tokens compared to U.S. equivalents.
- Cost differentials (roughly 10x cheaper) make Chinese models attractive for broad adoption.
