Post-COVID Investing: AI at the Wheel, Real Emotions in the Ditch
Spotting the Unseen: How Trends Shift Before Your Eyes
Watch this video if you have the time and an open mind—it reveals patterns the masses overlook. Whether you watch it before or after this update, it will reinforce key ideas, but only if you approach it without bias to recognise the deeper parallels. Regardless, it’s an interesting and concise watch.
Major shifts often go unnoticed because our minds filter out what doesn’t align with expectations, which are shaped by cognitive biases such as the narrative fallacy, normalcy bias, confirmation bias, and recency bias. But trends don’t wait for approval—they unfold with or without recognition. Understanding this is the difference between being blindsided or staying ahead of the curve.
The Open-Source AI Revolution: It’s Growing Dominance
Kai-Fu Lee’s AI startup, 01.AI, is fully embracing Deepseek’s open-source models, abandoning proprietary LLM development. He sees Deepseek as an existential threat to OpenAI, arguing that a free competitor undermines OpenAI’s subscription-based model.
Lee claims Deepseek’s rise triggered a “ChatGPT moment” in China, driving widespread adoption among hardware and software firms. Many Chinese users have reportedly canceled ChatGPT subscriptions in favor of Deepseek.
While OpenAI spent $7 billion in 2024, Deepseek operates at just 2% of that cost, making it a long-term challenger. Lee believes open-source will dominate, forcing consolidation in the AI industry.
Since Deepseek launched its first reasoning model, a wave of powerful AI models has emerged from China and beyond. Yet, human nature is predictable—like animals imprinting on the first thing they see, many latched onto Deepseek simply because it dominated the news cycle. Media outlets, driven by clickbait and sensationalism, don’t care about substance—just eyeballs. But that’s not the real story.
The true shift is that open-source AI is now the new oil. Companies exist to make money, not burn it, and most users aren’t programmers or mathematicians—they need functional AI. If Deepseek and other low-priced models deliver at a fraction of the cost, why would anyone pay 5x more for Openai or Claude?
Then there’s NVIDIA. When unveiling the Blackwell chip, what did they highlight? Deepseek. That’s billions in free advertising, reinforcing its dominance in the minds of the masses.
Now, with Deepseek working on R2 and pushing toward AGI while staying non-profit, the battlefield is set. Open-source AI is steamrolling ahead, and those clinging to closed models are running out of time.
We’ve said it before, and we’ll say it again—expect changes beyond anything you can fathom in the companies driving LLM development, the chip industry, and, most critically, the labour force. The shifts ahead won’t be gradual; they will be seismic.
The Post-COVID Shift: Fragile Minds, Fading Resilience, and the Illusion of Control
Before we delve into the main topic, please note that it is a vast subject, and we’ll break it down in future market updates. We don’t have to cover this, but we are—because it’s part of a seismic shift that will reshape AI and obliterate many of today’s so-called leaders. Mark our words: some of the biggest names in AI will vanish, wiped out and forgotten, while those who dismissed these warnings will say, I should have listened.
AI isn’t just disruptive—it’s exponentially disruptive. Think of the leap from steam to electric trains. That was revolutionary—until the bullet train rendered them obsolete. And you couldn’t just upgrade old tracks; the entire infrastructure had to change. That’s child’s play compared to the transformations AI will unleash.
They say love makes the world go round—which is why it’s going nowhere. Engineers make the world move forward, and fortune follows those who build it. China is producing them by the millions; the U.S. is barely managing thousands. The future belongs to the builders.
Something changed after COVID. People, in general, have become more fragile; rational thought now takes a backseat to emotion. Some blame the vaccine, but we suspect it’s the extended lockdowns. Forced inactivity appears to have triggered latent aggression, making it more difficult for people to handle dissent.
The ability to “agree to disagree” is nearly extinct. Instead, the mindset is now binary—you’re either with me or against me. And ironically, this rigid thinking is most pronounced in the West.
Western media rarely highlight a crucial fact: while the U.S. technically has the largest economy, Purchasing Power Parity (PPP) is the more accurate measure of economic strength. On that front, China overtook the U.S. long ago. It’s not about how much you make—it’s about what you can do with it.
China, unlike the United States, consistently runs a surplus year after year, enabling it to fund massive projects without incurring debt. Meanwhile, the U.S. borrows endlessly to maintain the status quo. Even if the West somehow retained its edge, its strategy of stifling competition would still backfire—history has shown that bullies always lose.
Another possible factor fueling this mindset is a lack of exposure, rather than a lack of education. The loudest voices often exploit the fact that the average American has limited firsthand knowledge of the world beyond U.S. borders. Most have never travelled internationally and rely on a Western-centric narrative that reinforces the illusion of American invincibility.
It’s the naked emperor syndrome—everyone insists his imaginary robes are glorious until a child states the obvious: he’s stark naked.
Meanwhile, China’s rise is accelerating at an unprecedented pace, and we’re not just observing from afar. Through extensive travel, strong international connections, and first-hand experience, we gain both a broad perspective and an on-the-ground view. Ignoring these shifts won’t stop them—those who do may find themselves caught off guard.
A study finds 40% of Gen Z struggles with handwriting, a skill essential for cognitive development and deep communication. Digital reliance—encompassing keyboards, social media, and messaging apps—has made handwriting increasingly rare, potentially weakening memory and comprehension.
Teachers report that students struggle with basic writing, often favouring short, fragmented sentences. The decline raises concerns about critical thinking and meaningful communication. To preserve these skills, education must balance digital tools with traditional writing.
Before we continue, the decline in cognitive capacity isn’t a generational phenomenon—it’s systemic. Social media, when consumed passively, can rewire thinking, shrink attention spans, simplify vocabulary, and erode critical thought. The brain, like a muscle, weakens when underused. Binary thinking—”I want,” “Feed me,” “Get rich”—now dominates, leaving little room for nuance. Disagreement sparks hostility, not debate.
This shift isn’t accidental. It’s the result of dopamine-driven digital engagement, designed to keep people reactive rather than reflective.
A quick Google search reveals a growing trend—top tech and research leaders are leaving prestigious U.S. positions for China. These aren’t average workers; they are elite professionals, many of whom had highly lucrative careers in the U.S. So, why the shift? Simple—China not only matches or exceeds U.S. compensation, but it also offers these experts a level of prestige and influence that rivals that of celebrities. In many cases, their pay is higher even on a nominal basis, making the move an even more compelling choice.
Nearly 90% of the sources we cite to support these claims come from U.S. or other Western-based media outlets. Given that competing nations typically downplay each other’s successes—standard operating procedure in global politics—this only adds more weight to the situation.
We will share a steady stream of developments, breakthroughs, and strategic shifts. In the end, you can decide whether nothing is happening or if a massive transformation is unfolding before our eyes. (A more extensive list of these updates will be provided under Random Musings toward the end.)
China is rapidly emerging as a dominant force in technology, attracting top-tier talent and advancing key innovations. A growing number of elite U.S.-based researchers, particularly in the fields of AI and semiconductors, are relocating to China, drawn by higher compensation, greater prestige, and substantial research funding. A prime example is AI expert Guo-Jun Qi, who left the U.S. after a decade to lead a major AI lab in China.
At the same time, China is making significant breakthroughs in semiconductor technology. The Jiufengshan Laboratory in Wuhan recently achieved a major milestone by integrating a laser light source into a silicon-based chip—an innovation crucial for high-speed data transmission and AI applications. This integration was accomplished using self-developed heterogeneous integration technology, involving complex processes to integrate an indium phosphide laser within an 8-inch SOI wafer. This development strengthens China’s semiconductor independence, particularly as the U.S. has largely abandoned similar research on photonic switches.
Conclusion
China is dominating across the board, with an unstoppable wave of innovation and breakthroughs emerging every week. BYD’s new Blade battery. BYD now has the world’s largest engineering workforce—110,000 engineers—overtaking Toyota’s 100,000 (a fact Toyota has quietly removed from its website). Huawei? While exact numbers are unknown, it has issued over 400,000 engineering certifications, including more than 13,000 at the elite HCIE level.
As we highlighted at the beginning, engineers drive progress, and without them, industries crumble. Just look at Boeing: they replaced engineers with bean counters, and now their planes are literally falling apart. The same applies to America’s struggling shipbuilding sector and other critical industries. Engineers aren’t made overnight—it takes years of rigorous STEM education. The U.S. is falling behind in math and science, and even if it changed course today, it would take a decade to see real results. Meanwhile, China is producing engineers by the millions, which is why they’re leading in AI, biotech, EVS, robotics, and beyond.
Very important but divergent point
The bull market that nobody sees coming is the one that will send the doubters into oblivion. When it happens, those convinced it could never occur will be blindsided, watching in disbelief as it surpasses all expectations. In the West, it’s not even on the radar—making its impact even more spectacular.
When FXI finally closes above its previous high, it will trigger a powerful signal. However, this signal hinges on two hidden key patterns—one already in motion, the other yet to be triggered. The real significance emerges only when all three factors align: the two patterns and a monthly close at or above 74.00. When that moment arrives—and it will—it will mark the beginning of a paradigm shift—more on this in future updates.
