Kevin Xu - Interconnected

($) Llama 3.1 and Its Geopolitical Implications

Allowing output for training, synthetic data use, and more!

WSJ, Odd Lots Podcast, Third Plenum on GenAI

I’m on the road this week in NYC and Austin, so today’s post will be a short one and won’t be my usual column-style essay. Instead, it’s a compilation of some recent media appearances elsewhere and a succinct (and hopefully

Topics: Middle East• AI•

Swing Vote of Global AI Competition: the Middle East

The global AI competition is often framed as a 1-on-1 battle between the US and China, with a “Cold War II” undertone as the backdrop. In this tussle, there is one region that is growing more powerful and critical to which side will eventually

Topics: AI• Cloud Industry•

($) OpenAI Bans China

This API ban signals a phase shift from “chip war” to “cloud war”

Topics: Industrial Policy• AI• Geopolitics•

When Two “Presidents” Debate

What Trump 2.0 means for AI and tech, US-China, Industrial Policy, and Being an Asian American

Topics: Nvidia• AI•

($) Software is Why Nvidia Will Not Become Cisco

Topics: Cloud Industry• AI• Investing•

Software Is Not Dead

But AI is killing “land and expand”

Topics: Cloud Industry• AI• Alibaba•

($) China Cloud Price War

Topics: Cloud Industry• Huawei• AI•

Huawei Cloud and “AI in the Box”

Will “AI in a box” become a thing? Huawei Cloud is certainly trying to make it so. By packaging GPUs, networking, server racks, other hardware, and AI models all together, Huawei Cloud is pushing the adoption of AI infrastructure by putting everything an enterprise

Topics: Data Center• AI•

($) Greg Abel Will Power AI

During the Berkshire Hathaway annual meeting last weekend, Warren Buffett made a lot of headlines on AI. By comparing AI to nuclear weapons and sounding the alarm on deepfakes by talking about how he was almost fooled by a deepfake of his own likeness,

Topics: Quarterly and Annual Letters•

Q1 2024: Inner Scorecard

Welcome to my first quarterly letter of 2024. To new and old readers alike, a friendly reminder: at Interconnected, I run a long/short equity portfolio that is laser-focused on investing in the “picks and shovels” of the interconnected global digital AI economy. I

Topics: Semiconductor• TSMC• Industrial Policy•

($) TSMC: Where and How Will It Raise Prices

Most of the CHIPS Act subsidies have (finally) been (preliminarily) allocated. Out of the pot, and out of the companies’ whose fabs and capabilities actually matter in the industry, Intel got $8.5 billion, TSMC got $6.6 billion, Samsung got $6.4 billion,

Topics: EVs• Tesla•

Is Tesla China’s “Catfish”?

If you google “catfishing”, you get a plethora of results on its use as a term to describe fake online personas to dupe or scam people on social media and dating apps. A beautiful gal showing fake interest in unattractive guys for their money

Topics: AI• Geopolitics•

($) Do We Need Sovereign AI?

Topics: Cloud Industry• Geopolitics•

When the Houthis Found “the Cloud"

One topic this newsletter has been obsessed with over the last four years is cloud data centers. Partially because of my previous industry experience, working deeply on cloud-based tech products, partially because these data centers are just fascinating and so crucial to the global

Topics: AI• Open Source•

($) Tracking Global AI Talent Flow

Topics: Semiconductor• Japan• Taiwan•

Japan's Semiconductor Red Carpet

Over the weekend, while I was recovering from jetlag after attending a wonderful three-day, closed-door conference on China hosted by the Salzburg Global Seminar, TSMC quietly opened its first chip fab in Japan. I only say quietly because very few mainstream English media outlets

Topics: China• GDP•

($) China’s Provincial GDPs: Pessimism or Sandbagging

Topics: EVs• China•

Wang Chuanfu: A Name Everyone in the West Should Know

Elon Musk has almost 100% name recognition worldwide. Wang Chuanfu (王传福), the founder of BYD which just beat Tesla in global electric vehicles sales, is virtually unknown in the west. Even in China, he is only well-known in the business circle and has a

Topics: Geopolitics• AI•

($) 10-K's and Geopolitics: AMD, Intel, Meta Edition

Topics: Nvidia• Huawei•

U.S. Export Control is Hurting Nvidia and Helping Huawei

U.S. export control on advanced semiconductors is starting to become counterproductive. While the intended goal is to strengthen national security by preventing China from obtaining cutting edge American-designed AI chips, the real effects are hurting leading American companies, particularly Nvidia, while helping China’

Topics: AI•

($) AI May Have A Gross Margin and Bullshit Revenue Problem

Topics: TSMC• Industrial Policy• Semiconductor•

TSMC Hedges Against a CHIPS Act Fail

The much-lauded CHIPS Act is not going well. And TSMC, which is supposedly to be one of the Act’s biggest beneficiaries, is starting to hedge against a failing industrial program. Since its passage 16 months ago, the Act’s implementation led by the

Topics: Investing• Quarterly and Annual Letters•

($) Less is More: 2023 Annual Letter

Topics: AI• China• Regulation•

🤷Does China Want Generative AI?

My first post of 2024 tries to answer a question I’ve been wrestling with throughout 2023. Does China want generative AI? Increasingly, I think the answer is: not really. On balance, China as a whole (minus the small, elite circle of tech entrepreneurs,