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Cake day: January 21st, 2020

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  • i distilled this article

    Summary of the article “How China gets better bang for its buck than America in AI” (Aug 3 2026)

    • U.S. AI spending is massive – Bloomberg Intelligence estimates U.S. data‑centre capital outlays could exceed $740 billion in 2026, with Nvidia alone negotiating a $250 billion financing deal for a $500 billion data‑centre run by OpenAI. Alphabet announced a $205 billion AI budget.

    • China spends far less – Chinese tech firms are projected to invest less than one‑tenth of the U.S. amount in data centres. Yet their models perform only slightly behind U.S. equivalents. For example:

      • K3 (Moonshot AI) scores ≈ 95 % of Anthropic’s Fable 5 on common benchmarks while being 70 % cheaper to run.
      • Alibaba’s newly released model ranks among the world’s best on certain metrics.
    • Why Chinese spending is efficient

      1. Lower input costs – Land, construction, equipment and labour are cheaper in China.
      2. Model distillation – Chinese labs often train models using outputs from expensive U.S. models, reducing the compute needed.
      3. Hidden spending – Some expenditures on high‑end chips are masked as “cost‑saving” techniques that make inferior hardware achieve higher performance (e.g., DeepSeek’s efficiency tricks).
    • Export restrictions limit Chinese capital use – U.S. bans on advanced AI chips (Nvidia designs, TSMC manufacturing) prevent China from buying the most powerful hardware.

      • Chinese firms are pushed toward domestic alternatives (Huawei, SMIC).
      • Sanctions also block access to cutting‑edge chip‑making equipment, forcing costly work‑arounds and capping production capacity.
    • Domestic demand constraints – Chinese enterprises spend < 10 % of what U.S. firms spend on IT, despite China’s GDP being two‑thirds of the U.S. (or a third larger in PPP terms). This throttles revenue prospects for AI providers, curbing their willingness to invest heavily.

    • Strategic focus differs – The Chinese Communist Party emphasizes diffusing AI across the economy, not pursuing a race toward artificial general intelligence (AGI). Fewer than ten Chinese firms target AGI, compared with dozens of U.S. players.

    • Investor attitudes – Chinese investors have historically punished over‑spending on AI, whereas U.S. investors once rewarded aggressive budgeting. This cultural difference keeps Chinese AI budgets modest.

    • Potential bottlenecks for China – Despite restraint, China may face compute shortages:

      • ByteDance experiences ten‑hour processing times for some videos.
      • Alibaba Cloud, Zhipu AI, and Moonshot’s K3 have long waiting lists or quickly sell out capacity.
      • Over‑restriction could stifle growth if AI services cannot meet user demand.

    Overall takeaway: China achieves comparable AI performance to the U.S. while spending a fraction of the capital by leveraging cheaper resources, model‑distillation techniques, and a strategic focus on wide‑scale diffusion rather than raw computational power. However, export bans, limited domestic chip capacity, modest corporate demand, and cautious investors together create both an efficiency advantage and a risk of under‑provisioned infrastructure.




  • commentary on the yggdrasil overlay network:

    Yggdrasil nodes are ordinary userspace routers that intentionally forward traffic for any peer that is reachable over the overlay.
    When a local node learns a route to an “Internet‑on‑ramp” (a peer that has a public IPv6 address or a NAT‑traversing tunnel), it adds that path to its routing table and advertises it to its other neighbors. Because every peer can act as a router, traffic from a device that has only a local peer‑to‑peer link can be carried through any other node that has a route to the wider Internet, even though that node is not on the same LAN.

    In the traditional Internet, routers are owned and operated by ISPs or autonomous systems that enforce policies such as “do not forward traffic for non‑customer addresses” and NAT/firewall rules that block arbitrary inbound forwarding. Ordinary end‑devices are not allowed to advertise themselves as routers for other users, so a local host cannot automatically use a neighbor’s Internet connection unless explicit forwarding (e.g., NAT, proxy, VPN) is configured.

    Yggdrasil’s design therefore differs in two key ways:

    1. Overlay routing is decentralized. Each node maintains a small routing table of reachable peers and, by default, will forward packets on behalf of any other node in the overlay .
    2. No ISP‑imposed forwarding policies. Because the overlay runs over arbitrary transports (TCP/TLS, QUIC, etc.) and all nodes are peers, there is no external authority that blocks or filters traffic‑forwarding decisions, allowing local peers to act as on‑ramps to the wider Internet.

    Consequently, a device on a local Yggdrasil LAN can reach the public Internet through any neighboring node that has an external path, while the conventional Internet prevents this kind of unrestricted peer‑to‑peer routing.

    https://github.com/yggdrasil-network/yggstack . this is a rootless implementation which runs on any mobile(ipv6) android phone (via termux).
    its best to not think of it as an immediate, full, replacement for the the entire internet