...cont
Greater challenges
It may be fate, or it may be a coincidence, but at a time when the Chip War is in full swing, the fourth industrial revolution driven by AI has begun.
At the end of 2022, the roar of OpenAI brought a new world to carbon-based humans, and also made the Chip War part of a wider confrontation. In fact, the United States has already restricted Chinese technology companies from accessing the latest AI chips, and plans to prohibit American capital from investing in Chinese artificial intelligence companies, according to reports.
As we all know, the early stage of the industrial revolution (initiation stage) is a period of emerging new technologies, dazzling new models, and emerging new giants. If we cannot keep up with the changes in core technologies at this time, the gap later on may become increasingly wider. A small mistake can lead to a big loss, and it will take more time and money to catch up later on.
During the initiation stage of the first industrial revolution (steam engine), China adopted a closed-door policy; during the initiation of the second industrial revolution (electricity), China was in a turbulent period at the end of the Qing Dynasty; and during the initiation of the third industrial revolution (computers), although new China was catching up synchronously, the progress was greatly affected by political movements.
Therefore, every footnote in history tells us: we cannot fall behind this time.
Fortunately, China still has some foundation in the field of AI. Since 2012, internet giants and startups have been continuously pouring into the AI field. Although it was the Americans who discovered the new continent, looking around the world, China seems to be the only country closely following behind, and there is no need to underestimate ourselves.
However, there are also many unfavorable factors. Firstly, the methodology used by the US in the Chip War will definitely be extended to the field of artificial intelligence. However, unlike the global division of labor and the ultra-long industrial chain in semiconductors, most of the fields in artificial intelligence are innovative at the software level, and the chain is relatively short, with a lower (but not zero) probability of being strangleheld than semiconductors.
Secondly, venture capital funds are in short supply. Due to the influence of geopolitics and [the slump in] Chinese ADRs, it is an open secret that US dollar funds cannot be raised. The RMB market is greatly affected by local finances. Therefore, the current AI entrepreneurship wave in China is far smaller than the mobile Internet wave ten years ago, and it is also far smaller than the currently thriving scene in Silicon Valley.
In terms of basic innovation, there is still a relatively large gap in China. The Bell Labs, which invented the transistor, and OpenAI, which launched GPT, are essentially "raised" by large companies (the former is AT&T, and the latter is Microsoft). China currently lacks such roles (government-funded Beijing Academy of Artificial Intelligence and Shanghai AI Lab are potential candidates).
If we cannot keep up with innovation, there will be an awkward situation of "if you dare to open source, I dare to innovate". [Baiguan note: this is a piece of satire on the phenomenon that a lot of innovation in China is based on open-source technology in other parts of the world.]
In the years leading up to the outbreak of a new technological revolution, countries that actively embrace it are likely to create a "generational gap" with their rivals. For example, the British invented tanks in 1915, but Germany was the first to form an armored army centered around tanks, with combat power far surpassing that of other surrounding countries. After that, they swept almost the entire European continent with lightning warfare.
Cooperation between the US military and technology departments has always been smooth - the Minuteman Intercontinental Missile was once the earliest major customer of integrated circuits, digesting 20% of shipments. And US defense suppliers such as Palantir and Ghost Robotics have already launched military products that incorporate the latest AI technology earlier this year.
Mao Zedong once said: "The Anti-Japanese War cannot be rushed, but the Liberation War cannot be delayed." The same saying may apply to the current situation: "The Chip War cannot be rushed, but the War of AI cannot be delayed."
In 1900, global steel production was 28 million tons, and oil production was 20 million tons. By 2022, these two numbers have become 1.88 billion tons and 204 million tons respectively - steel and oil are undoubtedly the basic raw materials for constructing human industrial civilization for more than a century. In the 21st century, however, silicon is the new steel and oil.
Before Pearl Harbor, the focus of the US embargo was on steel and oil, which were the foundations for military victory due to their strong metallurgical and refining capabilities. After the failure of the Moscow campaign, Germany fought desperately to advance towards the Caucasus, just to seize the Baku oil field - each era has its own strategic resources, and losing them is tantamount to failure.
We are at an unprecedented intersection of the industrial revolution and the great power game. Respect the law, maintain awe, and be full of confidence, and dawn will surely come.
---
Our Take
We agree with Boss Dai that, when looking at China’s semiconductor industry, the right assumption to make is not that the US ban will slow down its development. Rather, the ban might actually help create conditions for growth that wouldn’t become possible if Chinese end-users still had access to more competitive foreign chips and equipment.
In the end, when it comes to high-end chip-making, there is no theoretical barrier barring China. It is not as if there are some fundamental law of physics and chemistry that Chinese engineers do not know. The main obstacle is accumulation of technical know-how, which in turn requires sustained support of large amount of patient capital, something that is not possible till now.
Baiguan has launched our paid subscription model. If you subscribe now, you will be entitled to our limited-time discount for a 1-year subscription. Click the button below to take the offer.
Greater challenges
It may be fate, or it may be a coincidence, but at a time when the Chip War is in full swing, the fourth industrial revolution driven by AI has begun.
At the end of 2022, the roar of OpenAI brought a new world to carbon-based humans, and also made the Chip War part of a wider confrontation. In fact, the United States has already restricted Chinese technology companies from accessing the latest AI chips, and plans to prohibit American capital from investing in Chinese artificial intelligence companies, according to reports.
As we all know, the early stage of the industrial revolution (initiation stage) is a period of emerging new technologies, dazzling new models, and emerging new giants. If we cannot keep up with the changes in core technologies at this time, the gap later on may become increasingly wider. A small mistake can lead to a big loss, and it will take more time and money to catch up later on.
During the initiation stage of the first industrial revolution (steam engine), China adopted a closed-door policy; during the initiation of the second industrial revolution (electricity), China was in a turbulent period at the end of the Qing Dynasty; and during the initiation of the third industrial revolution (computers), although new China was catching up synchronously, the progress was greatly affected by political movements.
Therefore, every footnote in history tells us: we cannot fall behind this time.
Fortunately, China still has some foundation in the field of AI. Since 2012, internet giants and startups have been continuously pouring into the AI field. Although it was the Americans who discovered the new continent, looking around the world, China seems to be the only country closely following behind, and there is no need to underestimate ourselves.
However, there are also many unfavorable factors. Firstly, the methodology used by the US in the Chip War will definitely be extended to the field of artificial intelligence. However, unlike the global division of labor and the ultra-long industrial chain in semiconductors, most of the fields in artificial intelligence are innovative at the software level, and the chain is relatively short, with a lower (but not zero) probability of being strangleheld than semiconductors.
Secondly, venture capital funds are in short supply. Due to the influence of geopolitics and [the slump in] Chinese ADRs, it is an open secret that US dollar funds cannot be raised. The RMB market is greatly affected by local finances. Therefore, the current AI entrepreneurship wave in China is far smaller than the mobile Internet wave ten years ago, and it is also far smaller than the currently thriving scene in Silicon Valley.
In terms of basic innovation, there is still a relatively large gap in China. The Bell Labs, which invented the transistor, and OpenAI, which launched GPT, are essentially "raised" by large companies (the former is AT&T, and the latter is Microsoft). China currently lacks such roles (government-funded Beijing Academy of Artificial Intelligence and Shanghai AI Lab are potential candidates).
If we cannot keep up with innovation, there will be an awkward situation of "if you dare to open source, I dare to innovate". [Baiguan note: this is a piece of satire on the phenomenon that a lot of innovation in China is based on open-source technology in other parts of the world.]
In the years leading up to the outbreak of a new technological revolution, countries that actively embrace it are likely to create a "generational gap" with their rivals. For example, the British invented tanks in 1915, but Germany was the first to form an armored army centered around tanks, with combat power far surpassing that of other surrounding countries. After that, they swept almost the entire European continent with lightning warfare.
Cooperation between the US military and technology departments has always been smooth - the Minuteman Intercontinental Missile was once the earliest major customer of integrated circuits, digesting 20% of shipments. And US defense suppliers such as Palantir and Ghost Robotics have already launched military products that incorporate the latest AI technology earlier this year.
Mao Zedong once said: "The Anti-Japanese War cannot be rushed, but the Liberation War cannot be delayed." The same saying may apply to the current situation: "The Chip War cannot be rushed, but the War of AI cannot be delayed."
In 1900, global steel production was 28 million tons, and oil production was 20 million tons. By 2022, these two numbers have become 1.88 billion tons and 204 million tons respectively - steel and oil are undoubtedly the basic raw materials for constructing human industrial civilization for more than a century. In the 21st century, however, silicon is the new steel and oil.
Before Pearl Harbor, the focus of the US embargo was on steel and oil, which were the foundations for military victory due to their strong metallurgical and refining capabilities. After the failure of the Moscow campaign, Germany fought desperately to advance towards the Caucasus, just to seize the Baku oil field - each era has its own strategic resources, and losing them is tantamount to failure.
We are at an unprecedented intersection of the industrial revolution and the great power game. Respect the law, maintain awe, and be full of confidence, and dawn will surely come.
---
Our Take
We agree with Boss Dai that, when looking at China’s semiconductor industry, the right assumption to make is not that the US ban will slow down its development. Rather, the ban might actually help create conditions for growth that wouldn’t become possible if Chinese end-users still had access to more competitive foreign chips and equipment.
In the end, when it comes to high-end chip-making, there is no theoretical barrier barring China. It is not as if there are some fundamental law of physics and chemistry that Chinese engineers do not know. The main obstacle is accumulation of technical know-how, which in turn requires sustained support of large amount of patient capital, something that is not possible till now.
Baiguan has launched our paid subscription model. If you subscribe now, you will be entitled to our limited-time discount for a 1-year subscription. Click the button below to take the offer.
