(Preview) Kimi Madness; Xi’s AI Vision and US Questions; Trump’s Election Data Claims; The Connected Vehicle Security Act

**Andrew Sharp** (0:04)
Hello, and welcome to Sharp China. I'm Andrew Sharp, and you are listening to a free preview of today's episode.
Hello, and welcome back to another episode of Sharp China. I'm Andrew Sharp, and on the other line, Bill Bishop. Bill, how are you doing?

**Bill Bishop** (0:21)
Well, I'm getting a little sick. Unfortunately, you might hear it. I seem to be getting a little sick. So we'll power through the podcast. We'll see about a newsletter on Monday. It's 2 o'clock on Monday.

**Andrew Sharp** (0:30)
Power through, coherence is not guaranteed.

**Bill Bishop** (0:33)
It's not from screaming at the TV yesterday, watching the World Cup game.

**Andrew Sharp** (0:37)
I mean, I missed most of the World Cup game, and it sounds like I didn't actually miss much with the World Cup final.

**Bill Bishop** (0:44)
What do you think? I mean, it was still a good game, and Spain is just dominant. They just ruled Argentina. They squeezed the life out of teams.

**Andrew Sharp** (0:52)
They squeezed the joy out of soccer. So I'm not personally a fan of La Roja out there, but congrats to the Spanish national team. They did get it done, and it's great to be back. I mean, we're going a couple of days early this week because of scheduling on my end. I gotta say, Monday afternoon as we record this, there's already plenty of news to wrap our arms around. So we'll see what we're able to get through on this podcast, but we can start with Kimi. And for anybody who's been blissfully offline over the last several days, I'm gonna read from the Wall Street Journal on Friday. They wrote, the surprise release of a breakthrough artificial intelligence model from China intensified a sell-off in chip stocks on Friday, fueling concerns about competition in AI and massive corporate spending that underpins its build out. Tech stocks led a Friday sell-off that by late afternoon had broadened to envelop 10 of 11 sectors in the S&P 500 index. The trigger was China's Moonshot AI, which unveiled its Kimi K3 large language model on Friday. The Beijing-based startup claims that the model outperforms some cutting edge US systems, stoking what some analysts called DeepSeq 2 concerns.
It continues from there and obviously the entire internet was freaking out over Kimi over the last several days. Alibaba also released a preview of its QWEN 3.8 Max model that the company says is second only to Fable on the frontier. Alibaba also announced plans to release that model with open weights.
So clearly this is becoming more and more central to policy debates in Washington, and anxiety in Silicon Valley. What interests you as we wait to see how the US responds to these developments?

**Bill Bishop** (2:50)
Well, I thought the Kimi release was on the eve of the World AI Conference in Shanghai, which had an upgrade this year because Xi Jinping gave the keynote speech. And he didn't really deviate, I think, from what we expected, what we had talked about before, what he was going to talk about. But what was interesting, too, the freakout in the markets here in the US markets, you know, China over the weekend rolled out the efforts to rescue their stock market because their stock market has been down significantly. Friday was down a lot. National team back to work. Here we are. The DeepSea founder, you know, DeepSea comes out of a quant fund, one of the funds run by Dian Weng Feng, the DeepSea founder was down 16% last week.
Not clear that it was related to Kimi, but markets are down everywhere. So, you know, and in China, they are particularly sensitive because so much of the efforts to revive the stock markets are about improving the mechanisms to channel capital, private capital, into these tech startups too.

**Andrew Sharp** (3:50)
Into innovation, yeah.

**Bill Bishop** (3:51)
Into innovation and break through the US chokehold. So on the US side, I think the best thing I've written, you know, there were lots of, there are lots of hot takes over the last few days. I was just joking before we started the podcast that I thought about a hot take over the weekend and I realized I'm out of hot takes because it's just, you know, anyway.

**Andrew Sharp** (4:10)
Well, it's also, can I just say it's impossible to compete with Twitter in the takespace in the wake of something like this, because every other tweet is talking about the imminent decline.

**Bill Bishop** (4:22)
Right.

**Andrew Sharp** (4:22)
It's just kind of hysterical on all sides.

**Bill Bishop** (4:26)
And lots of, and lots of which Cassie, including from some, some big American VCs who didn't invest in open AI and an anthropic, and so have a special hatred for those companies and seem to want them to all fail.