We had quite a few ideas on what to write this week, but, obviously, it all went out of the window when Trump announced tariffs on everyone and their parents.
Last week we ran our “The China Century” piece, and we got the most positive feedback since we started this column. As usual, that wasn’t completely unanimous and we got a bit of pushback from a couple people.
Some have understood that by acknowledging China has lapped the west in industrial and technological capabilities, we’d be long China and short the west, or that we’d only look at investing in Chinese companies or something similar.
Writing The China Century wasn’t our allegiance application to the CCP, but rather taking stock of what the current situation in the world is like now, and even more so, trying to predict what it will be in 10, 20 and 50 years.
Continuing on our status quo path, without acknowledging what China has achieved, and how it has positioned itself is not only intellectually dishonest, but just silly and very dangerous - both for us as investors and for everyone else. Like in any sport or other professional activity, you have to recognize when your adversary has gotten the upper hand (or will get it in a few moves).
We think Trump, in his chaotic way, is probably the person that most clearly has internalized this. He knows China is on a winning path, and he cannot stand it - and is ready to fully tank the US economy if it means hurting China. Doing nothing is not an option, and worldwide tariffs (although China still seems like the #1 target) is what he chose.
We won’t go into political territory - the people that have been following my reading can imagine what I think about tariffs and general government intervention in economic affairs - but we watch this as a survival battle that is necessary. It is incredible to live in a time when this is playing out in front of our eyes, and a bit scary to project it out to some potential outcomes. Thank God Ray Dalio we have him to guide us through these times and remind ourselves it’s not just about tariffs.
As we write, yields on 10Y treasuries have skyrocketed to 4.5% (erasing the good outcomes of the past days), likely meaning either someone big has gone belly up and was margin called, or that China has been dumping to “punish” the US.
The retaliations keep mounting, with the US doing 104% and China 84% (as well as blocking rare earths exports worldwide). No end in sight.
In all of this tariffocalypse, we still don’t want the short term noise to destroy our ability to think clearly. In one of the upcoming issues we will instead be laying out our thoughts around what the US has as some core structural cultural advantages that can’t be erased in a few cycles of industrial innovation. But this is a dense edition, and Francesco is now back from China with some more thoughts on it.
The ending of the Ming treasure voyages, a series of expeditions of China’s imperial fleet between 1405 and 1433, is an exceptional insight into self-inflicted damage of a country’s ruling class. The short story is that a series of fights internal to the imperial bureaucracy and a general disinterest in expanding territorial control, led the Chinese navy to stop sending fleets first, and then altogether dismantle all the shipyards. So that by the time Europe reached the golden age of exploration, China had no shipbuilding capabilities, a debacle that would reverberate on the global power balance for the following five centuries. Now contrast this with Palmer Luckey (link to the interview below) pointing out that China has 350x the United States’ (military!) shipbuilding capabilities today.
How this happened is mostly the result of the worldview that was (and still is in Noah Smith and the likes) dominant in the West: a mental model where Xi is a boomer obsessed with manufacturing and all things old economy, with a blind spot on what matters in the millennials’ economy. Turns out, the boomers knew there are things you can’t vibecode, such as your entire industrial base. The West thought that once they had achieved the tertiary/quaternary/SaaS regime, it could forever outsource the old economy to developing countries that would diligently maintain their place as sweatshops of the rich world without breaking ranks. Surprise: there’s no felony of lèse-majesté in development economics, and giving away a whole system of industrial and technological know-how is a recipe to be held hostage of trade imbalance and external dependencies. Tariffs are only one of the many prices to pay while you clumsily batten down the hatches.
“I Just Saw the Future. It Was Not in America” Thomas Friedman’s journey into Huawei's research campus in Shanghai. A leap tech future that rivals the U.S., and a glimpse into China’s strategic view to fend off tariffs and geopolitical pressure.
Trade, Tariffs, and Tech: Stratechery has, unsurprisingly, a great read on all of this.
The difficulty of bringing manufacturing back. Great summary on why the road downstream to tariffs is even harder.
China's Impact on Global Biotech: Perspectives from the Front Line: We’ve written about this quite a bit. A piece by Jacopo Gabrielli offers more nuances into the future of drug development between West and East.
Could constitutional challenges further delay or even block Hutchison port deal? The stalled sale of strategic Panama Canal port terminals from CK Hutchison to BlackRock reveals how U.S.-China tensions over infrastructure is a game of legal and political chess.
Palmer Luckey on superhuman soldiers, China, missiles, exoskeletons. and China. Tl;dw: “If we don’t make things in America, we’re just everyone else’s bitch”. Echoed by Naval’s take on drones here.
And the tariffs list + the tally for China soon
And two great pieces by Ray Dalio for some theory:
What this is really about - on the end of a world order
The Llama 4 herd: The beginning of a new era of natively multimodal AI innovation: Llama 4 Scout and Llama 4 Maverick are game-changing multimodal models that not only enhance AI's reasoning and coding abilities through advanced training techniques but also tackle bias and safety concerns, paving the way for more reliable and personalized AI interactions across various platforms. Some people are saying that Meta was subtly trying to game the benchmarks, if that’s so - that’s not super cool and a bit embarrassing.
The ghost in the swarm: The article highlights a crucial shift from centralized AI models to distributed intelligence systems, emphasizing that as robotics and autonomous technologies proliferate, understanding and designing these decentralized networks will be key to navigating the complexities of the physical world, ultimately reshaping our approach to intelligence and control in technology.
DeepMind slows down research releases to keep competitive edge in AI race: Google's AI division, under Demis Hassabis, is tightening the reins on research publication, sparking concerns about transparency and collaboration in the tech community, which could stifle innovation and keep groundbreaking discoveries under wraps.
Do SaaS Founders Dream of System Prompts?: The SaaS landscape is undergoing a seismic shift as AI-native middleware emerges, threatening to transform software from rigid, siloed applications into dynamic, adaptable systems that respond to user needs in real-time—think of it as software that finally learned to read the room, promising a future where businesses trade system prompts instead of outdated software, potentially leaving traditional SaaS tools in the dust.
Building an Efficient GPU Server with NVIDIA GeForce RTX 4090s/5090s | Andreessen Horowitz: Building your own GPU server with RTX 4090s not only slashes costs and keeps your data safe from prying eyes, but it also opens the door for developers to create powerful local AI applications without the cloud's shackles—think personal chatbots or custom machine learning models that are all yours!
Inference-Time Scaling for Generalist Reward Modeling: Reinforcement learning is stepping up the game for large language models, enhancing their reasoning abilities and scalability through innovative techniques like Self-Principled Critique Tuning, paving the way for smarter, more adaptable AI that could soon tackle complex queries with impressive accuracy.
AI 2027: A scenario analysis of how tuning a few toggle switches can lead humanity to opposite possible outcomes for superintelligence. From radical prosperity to Matrix-like machines domination.
Reflexive AI usage at Shopify. Shopify’s CEO Tobias Lütke shares an internal memo on how AI will be used internally, from learning to the new baseline for HR (clue: it’s AI-first, hiring second).
Arena launches an AI Hardware Engineer (with $30M in funding). Things like this will have such an incredible impact on the level of our productivity, it’s not even imaginable.
Sequoia interviews Replit’s CEO. Must watch podcast (and not only because Stefano is an early pre-seed investor in Replit and waiting for liquidity..)
Direwolfs are back: While wolf attacks on humans are as rare as unicorns in North America, domestic dogs and even deer are responsible for far more fatalities, highlighting a curious twist in the wildlife-human safety narrative and the need for better predator management to curb the rising deer population and its dangerous road antics.
If Sodium Stops Making Sense: Bedrock Materials is hitting the pause button on sodium-ion battery development. The price of commodities does play a big role and things have drastically changed for lithium-ion batteries.
Hyundai’s $6B investment into Boston Dynamics. Another carmaker’s commitment to humanoid robots.
Intel and TSMC discuss joint venture. Lip-bu Tan’s first big move to turn over Intel’s fate.
Humanoid Robots in Manufacturing: Ben from Speculative Technologies aligns to our view of specialized robots winning big in manufacturing. The tl;dr is that “in a world where there is good enough software and hardware to create humanoid robots that are as good and flexible as a human at manufacturing tasks, we will also be able to quickly create more task-specific hardware or use less complex hardware that can do those roles cheaper, faster, and better.”
How Google built the new family of Gemini Robotics models: by fine-tuning multimodal AI with robot-specific data to enable vision-language-action capabilities, Google allows robots to perform complex tasks like object manipulation and spatial reasoning. The models were trained on diverse datasets to achieve generalization across various robotic embodiments, demonstrating dexterity in tasks such as origami folding and preparing a salad.
As for humanoid robots, we have 1x’s NEO filling the dishwasher and something from Disney.
3D printer used to construct train station building in Japan: The West Japan Railway Company announces the construction of at 3D-printed train station in Wakayama.
Longevity's First Blockbuster: NfX explores how GLP-1 drugs like Ozempic and Mounjaro have rapidly become a blockbuster success by addressing the root cause of obesity, offering both immediate quality-of-life improvements and long-term health benefits. Their rise reveals a new playbook for longevity medicine.
Pregnancy & Birthing: Could machines have our babies?: Artificial wombs might redefine our understanding of being human and challenge the individualism that permeates Western society.
Human high-order thalamic nuclei gate conscious perception through the thalamofrontal loop. Simultaneous intracranial recordings in humans revealed that conscious perception is driven by information flow from the intralaminar and medial thalamic nuclei to the lateral prefrontal cortex, rather than from cortical regions alone. These thalamic nuclei exhibit earlier and stronger consciousness-related activity and modulate thalamofrontal synchrony, supporting their role as dynamic gating structures in the emergence of conscious awareness.
Nudge is pioneering a non-invasive ultrasound-based brain interface that not only aims to treat ailments like chronic pain and anxiety but also aspires to enhance cognitive functions such as focus and memory.
The Advanced Manufacturing Company of America launches with $76M in funding for an aerospace rollup. Let’s see if Raymond Tonsing is the new JP Morgan.
Sperm Racing: You read that right. In LA, if you’re there - you must go.
Other things we liked
Project 11. A countdown to a quantum attack to bitcoin and a project to counter it.
Julien Chaumond using MCP to automate web browsing on Lightpanda.
The Colors Of Her Coat: The journey of creating ultramarine blue, once a laborious venture across perilous terrains and through complex processes, and today’s AI art.
Prospera: The Soul of the Rebellion. Adam Draper’s trip to Honduras.
Paradigm Shifts: An incredible profile of legendary investor Matt Huang, and the story of Paradigm.
Once-in-a-Species: The unique human fascination with scarce collectibles, like seashells, may have been the driving force behind our species' dominance over Neanderthals, ultimately leading to the development of money and the foundation of civilization, now echoed in the rise of Bitcoin as the ultimate form of scarcity. Take a good coffee cup for this one.
Let us know what you think of this format, and if you have anything else we should read!
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