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China’s DeepSeek AI app sends U.S. tech stocks reeling

We tried out DeepSeek. It worked well, until we asked it about Tiananmen Square and Taiwan​



We tried out DeepSeek. It worked well, until we asked it about Tiananmen Square and Taiwan

The AI app soared up the Apple charts and rocked US stocks, but the Chinese chatbot was reluctant to discuss sensitive questions about China and its government
www.theguardian.com
www.theguardian.com
I’ve had chat gpt avoid talking about certain political queries as well so it’s par for the course. AI on standard hardware would be huge if this is true. My guess is like other AI’s you can adjust the model however you want if you take ownership.
 
Anything in particular you are watching today?

I was able to keep myself in check yesterday and not buy anything, although the temptation was strong near the day's end. I decided I'd give it a bit of time to settle out. Sometimes that works for you, sometimes against you.

I made a list of 8 stocks I'm watching today, all of which dropped significantly yesterday. I already own 6 of them, at highly varying levels, so most would be additions, not new positions if I decide to buy. They are: VRT, CCJ, APLD, ETN, NVDA, MRVL, GEV, and TSM.
My stock is up over $7 today, needs a few more days to get back to where it was, but I think the panic was a one day thing. Nvidia is up over $9 bucks.
 
My stock is up over $7 today, needs a few more days to get back to where it was, but I think the panic was a one day thing. Nvidia is up over $9 bucks.
I got back today about a quarter of what I lost yesterday.

I added two new stocks to my portfolio today, ETN and GEV, and made some incremental additions to 5 stocks I already owned (from the 8 in post #122). The only one of the 8 I didn't touch was NVDA. It's already my largest stock holding, I haven't trimmed it in 2 years. (I hold some ETFs at higher levels. But NVDA is double the value of my next largest stock. One of these days that will probably bite me in the ass :)).
 
NVDA is up 7.16% today. Can you say "rebound"?
I think that after the market digested the news overnight, many people decided that DeepSeek might help rather than hurt the AI trade. Using models that run on older, less expensive chips, and especially open source models, will allow smaller players to harness AI. You won't have to be a hyperscaler with multi-billion dollar cap-exes to benefit from AI.
 
It would take a longer conversation to unpack the damage American and Britain have done to the world and adequately compare it to Mao's atrocities. Based on death numbers, over the shortest period of time, yeah Mao is probably among the most brutal, but that undervalues the impact that centuries of slavery, colonization, genocide, wealth and resource plundering, and the destabilization and poverty this has caused across the entire planet across longer stretches of time. It's estimated that Britain stole $45 trillion in resources from India during its colonization. Let alone it's role in Africa, the Middle East. It's really difficult to calculate the impact of this and separate it from actual human cost, because they are so closely tied together.



I'm trying to find the death toll, but I've been unable to find reliable numbers from either side of the argument. Could you point me to a source? The most egregious atrocities and human rights abuses seem to be in the alleged sterilization practices, which has declined their population significantly, and also their mass detention and the abuses that entails. It might be that a lot of this info is held under key by China, which wouldn't surprise me at all. My understanding is that genocide (as in mass killings) is less clear than it is with Gaza, but I'll trust your sources.



As I said above, I think a big part of our missing each other is in how we measure these things. There is no objective metric, and the collateral damage from America's actions (as the dominant economic and geopolitical force in the world, here and now) is difficult to really calculate and contrast with China and how it's impact on the world, using a comparable metric. But I'm open to education and a discussion on this matter.

Would you say that China has an equivalent destructive imprint on the world compared to America over the past half century?
It's very much a topic for another thread.

However, two things leap out:

1. America is not responsible for the crimes of the British Empire.

2. I am confident in saying that while the total adverse impact upon the world may be unclear between the two of them, in terms of sheer body count and human rights abuses, the totality of China's crimes and atrocities is decisively and obviously worse than that of the States.
 
I think that after the market digested the news overnight, many people decided that DeepSeek might help rather than hurt the AI trade. Using models that run on older, less expensive chips, and especially open source models, will allow smaller players to harness AI. You won't have to be a hyperscaler with multi-billion dollar cap-exes to benefit from AI.
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It's very much a topic for another thread.

However, two things leap out:

1. America is not responsible for the crimes of the British Empire.

It's very much a continuation of Western colonialism and imperialism (hence why there's basically a seamless transition between, say, the British government and interests and those of the CIA, especially in the Middle East as America rose to dominance). This is pretty clear to me, and I don't think it's up for much debate. I am less concerned about where the exact borders are between nations and their atrocities than I am with the interests behind those atrocities. If the geopgraphcical landmass of America formed two new countries within the same region, and the ideologies and power within those regions remained the same, it would not at all make a difference to me, nor would it grant them a clean slate.

2. I am confident in saying that while the total adverse impact upon the world may be unclear between the two of them, in terms of sheer body count and human rights abuses, the totality of China's crimes and atrocities is decisively and obviously worse than that of the States.

I remain unconvinced, because it's impossible to calculate that negative impact of America's actions compared to the more easy-to-calculate crimes and atrocities of China. You have to factor in not just America, but the actions it takes across the globe to sustain that empire, including its actions in the Middle East, the dictatorships it sustains (and their human rights abuses), the actions of Israel, Saudi Arabia. The machinations in South America, the resources it plunders, governments it topples, the economic fallout and poverty that results from that, the wars that are stoked by this imperialism and resource plundering. How can it possibly be calculated?
 
It's very much a continuation of Western colonialism and imperialism (hence why there's basically a seamless transition between, say, the British government and interests and those of the CIA, especially in the Middle East as America rose to dominance). This is pretty clear to me, and I don't think it's up for much debate. I am less concerned about where the exact borders are between nations and their atrocities than I am with the interests behind those atrocities. If the geopgraphcical landmass of America formed two new countries within the same region, and the ideologies and power within those regions remained the same, it would not at all make a difference to me, nor would it grant them a clean slate.
The interests behind the CCP's heinous atrocities are fundamentally the same ones underlying the preponderance of those of the British Empire and Pax Americana: the accumulation, preservation and consolidation of wealth and power for the ruling class. Moreover, if you want to group the crimes of states via alignment of national interests, you've just dragged the actions of Stalin and the Soviets into China's tally, which strongly undermines the notion of America being 'worse' or even 'on par'.

I remain unconvinced, because it's impossible to calculate that negative impact of America's actions compared to the more easy-to-calculate crimes and atrocities of China. You have to factor in not just America, but the actions it takes across the globe to sustain that empire, including its actions in the Middle East, the dictatorships it sustains (and their human rights abuses), the actions of Israel, Saudi Arabia. The machinations in South America, the resources it plunders, governments it topples, the economic fallout and poverty that results from that, the wars that are stoked by this imperialism and resource plundering. How can it possibly be calculated?
I literally just said the total adverse impact of each on the world is unclear.

That having been said, it would be extraordinarily difficult and unlikely for the US to supersede China's body count when you consider that, above and beyond Mao's infamous purges, forced marches and massed starvation, the annexation of Tibet and the ongoing de facto genocides of Tibetans and Uighers that cumulatively killed , China sponsored and upheld its own particularly brutal dictatorial regimes in pursuit of its interests such as North Korea, Zimbabwe and Pol Pot's Cambodia among others.

Remember that Mao alone is responsible for the deaths, killings and fatal deprivation of ~40 million people on the low end of accepted estimates, 80 million on the high. The Chinese war and occupation of Tibet is responsible for roughly 1.2 million Tibetan deaths (roughly 1 in 6). Upwards of 1 million Uighurs have been incarcerated in Chinese concentration camps. Meanwhile, the CCP today directly and concretely tyrannizes a population of 1.41 billion in a high tech panopticon, roundly depriving them of freedom of speech, affiliation, association and political thought.

Meanwhile, putting aside existential wars like WW2, the Vietnam War, probably the bloodiest American 'colonial' war, even if we were to unfairly assign total and complete culpability to the US for all civilian and military deaths, would amount to 3.8 million. ~3 million for the Korean War. The Iraq War (including the occupation)? About 300,000 total; 1 million on the high end. Afghanistan War (again, for the full duration/occupation)? ~176,000. Since 1948, about 134,000 Palestinians have been killed, assuming we want to, again, unfairly vest the US with culpability for all of that. Let's even go as far back as the time of the American settlers and say the US killed ~9.7 million Indians during its genocide of the natives.

As you can probably tell, even if we multiplied this grim, and rather overestimated tally several times over, it would fall far short of equaling even a conservative estimate of China's body count nevermind those it oppresses directly, or indirectly (and has similarly killed indirectly) through its existential support of horrid dictatorships like NK.

Despite America's greater global reach and age (vis a vis Communist China), I am pretty confident in saying that China, under the CCP alone, is much worse and it's not particularly close.
 
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Also the mystery of Deepseek and other Chinese releases is out there. The reason it is so cheap is because they didn't actually fully train it and basically distilled models of different kind in to one. Weirdly enough its IP theft of sorts since ChatGPT has it in its terms of use for creating rival models.

But you know what, gonna respect the hustle. This will do permanent damage to the monetization of the AIs. Not that monetization was easy in the first place since META already released properly trained from 0 models open source. I guess it is Chinese sabotage if you are a believer in the AI (Which I am not)

Long story short is that China just sabotaged the financial side of LLMs and its monetization. (They distilled different models cheaply and released it open source)
 
Also the mystery of Deepseek and other Chinese releases is out there. The reason it is so cheap is because they didn't actually fully train it and basically distilled models of different kind in to one. Weirdly enough its IP theft of sorts since ChatGPT has it in its terms of use for creating rival models.

But you know what, gonna respect the hustle. This will do permanent damage to the monetization of the AIs. Not that monetization was easy in the first place since META already released properly trained from 0 models open source. I guess it is Chinese sabotage if you are a believer in the AI (Which I am not)

Long story short is that China just sabotaged the financial side of LLMs and its monetization. (They distilled different models cheaply and released it open source)
That Deep Seek is less breakthrough and more IP theft would be one of the least surprising developments in years.
 
I got back today about a quarter of what I lost yesterday.

I added two new stocks to my portfolio today, ETN and GEV, and made some incremental additions to 5 stocks I already owned (from the 8 in post #122). The only one of the 8 I didn't touch was NVDA. It's already my largest stock holding, I haven't trimmed it in 2 years. (I hold some ETFs at higher levels. But NVDA is double the value of my next largest stock. One of these days that will probably bite me in the ass :)).


You sure you want to keep that much risk in one stock instead of spreading it out with say SCHG or VUG?
 
You sure you want to keep that much risk in one stock instead of spreading it out with say SCHG or VUG?
Half of my portfolio is in a handful of momentum strategies containing a variety of mostly large cap ETFs. Those are evaluated once a month and traded on a rules based system. I'm currently holding IVV (S&P 500 index) at 10% of my total portfolio and QQQM at 6%. I'm holding VCR, VFH, and VOX (sector ETFs) at 2% of my portfolio each. So the ETFs in these strategies spread out my portfolio and hedge against the more risky stocks.

The other half of my portfolio is mostly stocks with a few ETFs. These are evaluated and adjusted at the first of the year and don't change much throughout the year. Right now NVDA is 6% of my total portfolio and 12% of this "fixed" half. Since NVDA is also held in IVV and QQQM I am a bit overweight NVDA. (It's about 6-7% of the market-cap-weighted S&P 500.)
 
Long story short is that China just sabotaged the financial side of LLMs and its monetization. (They distilled different models cheaply and released it open source)
This is a good thing IMHO as it gets the cost of creating such models down, even if some of the data "fell off the back of a truck".

Anything we can do to reduce the cost of creating these models puts more power in the hands of every day people.
 
While I agree in general that competition is generally good, I'd rather some other country was providing the primary competition. Both the US and China are racing to incorporate AI into weapon systems. My hope was that China would lag in that space. It looks like maybe not.
Israel beat them to it.

 
Half of my portfolio is in a handful of momentum strategies containing a variety of mostly large cap ETFs. Those are evaluated once a month and traded on a rules based system. I'm currently holding IVV (S&P 500 index) at 10% of my total portfolio and QQQM at 6%. I'm holding VCR, VFH, and VOX (sector ETFs) at 2% of my portfolio each. So the ETFs in these strategies spread out my portfolio and hedge against the more risky stocks.

The other half of my portfolio is mostly stocks with a few ETFs. These are evaluated and adjusted at the first of the year and don't change much throughout the year. Right now NVDA is 6% of my total portfolio and 12% of this "fixed" half. Since NVDA is also held in IVV and QQQM I am a bit overweight NVDA. (It's about 6-7% of the market-cap-weighted S&P 500.)


Sounds like a nice set up and you're obviously aware of expense ratio. If we run you're looking pretty darn good.


I'm at the point I don't do much high beta. Boring and slow for me.
 

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