Gurley speculates China may be blocking foreign IPOs to keep wealth inside China and taxed domestically.
“when these Chinese companies start with, a Bermuda entity and then go public on, an American stock exchange, that money's outside of China.”
Gurley speculates China blocks US listings to keep capital and tax revenue domestic rather than offshore.
“I wonder I and I don't have any data to back this up, but I wonder if part of what's going on is that the Chinese government wants to make sure that though that wealth is actually kept inside of China, taxed appropriately, and then able to be regenerative in that market.”
Gurley speculates Chinese government wants capital from tech companies kept and taxed domestically.
“I wonder if part of what's going on is that the Chinese government wants to make sure that though that wealth is actually kept inside of China, taxed appropriately, and then able to be regenerative in that market.”
Gurley says China has massive advantage clearing regulatory decks permanently while US only grants exceptions per project.
“This is where I think China has a massive advantage. They could just clear the decks for good for every project going forward. Whereas we're now making exceptions maybe with the TSMC plant in Arizona.”
Gurley argues autocratic China has a massive advantage over the U.S. by avoiding layered regulatory constraints.
“It's likely a massive advantage for China where a more autocratic government can just decide, okay, we're gonna start doing things a new way.”
Gurley urges people to watch China auto show videos to see competitive reality of innovation there.
“This is just deglobalization highly inflationary and will make our companies less competitive, not more.”
Gurley predicts restricting open source AI in US while leaving it available elsewhere will shift innovation abroad.
“if you pull up and say there's no open source here and you leave open source there, guess where it's going to be the most innovative, where where you're going to have the most entrepreneurs, where you're going to have the most innovation. It's gonna be over there,”
Gurley reports Chinese consumers show high willingness to adopt autonomous driving despite inferior technology.
“she said she had some really lousy experiences in the cars, but she was blown away at the Chinese consumers' willingness to adopt the technology.”
Gurley reports Chinese autonomous driving companies are three years behind Tesla, still catching up to FSD 11.
“She said, you know, they're still catching up to FSD 11. Now remember, FSD 11 was so they're like three years behind on full self driving.”
Gurley finds industry insiders surprisingly unsurprised by China's 5x cost advantage in nuclear.
“Right. That's a shocking Delta. Yes. And one of, I would say the single most surprising thing to me of all the discussions I've had in the past two weeks with everyone that's in this industry is how few people are shocked by it.”
Gurley says China builds nuclear plants at $2.5B per gigawatt versus $13B in the US.
“The plants in China that are the equivalent level three fission plants right now are coming on board at 2,500,000,000 per gigawatt. Right. So 13 to 2.5.”
Gurley argues anti-China attitudes are misguided as China is leading in infrastructure and cost efficiency.
“I think this anti Chinese mentality is a little nuts because if you look at low cost EVs, if you look at their subway stations, if you look at, they're leading us in many areas.”
Gurley urges US to respect China and Korea's superior execution and pursue Manhattan Project approach.
“And then two, consider some type of Manhattan project like approach where you get out of the current environment,”
Gurley argues blocking technology exports to China is not working and US needs to face reality.
“And I don't think blocking ASML or blocking AI technology or blocking anything is working. It's just not working.”
Gurley says China graduates 35% STEM versus below 10% in US, giving them necessary advantages.
“the number of graduates in China's university system that are STEM is 35%, and that number is below 10 in The US.”
Gurley says China graduates 35% STEM versus below 10% in US, giving China the pieces needed to compete.
“while we are, like removing advanced STEM courses in California, the number of graduates in China's university system that are STEM is 35%, and that number is below 10 in The US.”
Gurley calls anti-Chinese sentiment irrational given China's lead in EVs and infrastructure while America maintains false superiority.
“I think this anti Chinese mentality is a little nuts because if you look at low cost EVs, if you look at their subway stations, if you look at, they're leading us in many areas.”
Gurley criticizes anti-Chinese sentiment, arguing China leads in EVs and infrastructure while America has holier-than-thou attitude.
“And we have this holier than thou attitude that America is the best and that we're the leader and we're being passed.”
Gurley notes Chinese companies are among the leading donors to major open source projects like Linux.
“If you look at all of the major projects like Linux or MySQL, and most of these open source projects have a website and you can see who the leading donors are.”
Gurley cites China held 33% of global GDP in 1820 before Mao's isolation reduced it dramatically.
“in 1820, China's economy was wide open, and they actually, had 33% of the global economy. 33% of global GDP was China.”
Gurley states China's GDP share fell from 33% to 5% after Mao closed the economy.
“at the end of Mao's reign, and Mao had raised the wall and and kind of turned China inwards, they had fallen to 5% of global GDP.”
Gurley argues VCs in military-focused companies become China Hawks to justify their investments and defend portfolio companies.
“And I think that's happening now that we have a large number of VCs in the military space.”
Gurley claims many VCs have become China hawks because they need that stance to justify their military-tech investments.
“And I will tell you after spending twenty five years in venture capital, there's just this instinctive thing.”
Gurley notes China now has four deep-pocketed open source AI models including Baidu's upcoming release, creating competitive innovation advantage.
“this will be the fourth deep pocket funded model in China that are all open source. And when you consider I mean, this is a competitive dynamic, right, that leads to that.”
Gurley clarifies Manus operates exclusively on US models, has no foundational model, and never used Chinese models like DeepSeek.
“first of all, they've only operated on US models. They're a wrapper company. They don't have a foundational model and and they've only operated on top of US models.”
Gurley warns US policies were creating America-only AI versus China AI dominating rest of world, reversing internet patterns.
“Bingo. And I think had we continued on that path or if we go back towards that path, because I don't think this is over.”
Gurley notes Chinese solid-state LiDAR costs $130 per car versus Waymo's $5,000, a result of competitive optionality.
“And it's actually in China right now is, I think being priced at like $130 a car, this solid state MEMS LiDAR, whereas the Waymo LiDAR is like $5,000 a car.”
Gurley cites research showing over 500 Chinese EV startups compared to four legitimate US ones.
“And I, you know, I think the data suggest in this this piece of research would suggest that's why they've been so successful in EVs where there were over 500 EV startups,”
Gurley says China ensures 500 to 1000 competitors in target industries, letting markets select winners rather than state sponsorship.
“in these industries where they wanna succeed, they actually make sure that there are 500 competitors or a thousand competitors. And then they let the market whittle down to what the best one is.”
Gurley explains China ensures 500 to 1000 competitors in target industries, letting markets select winners rather than state sponsorship.
“what I really uncovered the detail on is that in these industries where they wanna succeed, they actually make sure that there are 500 competitors or a thousand competitors.”
Gurley notes 50% of AI researchers are Chinese-origin and China now leads in AI patents, questioning immigration restrictions.
“some people say 50% of AI researchers are of Chinese origin. And I believe now the patent count in AI coming out of China is larger than The US.”
Gurley argues Chinese government may not prioritize market cap as a win, citing BYD's recent 30% price cut.
“the Chinese government may not consider that part of the objective function of what a win is. And in the past three weeks, we saw BYD take prices down 30%.”
Gurley argues Chinese government deprioritizes market cap, citing BYD's recent 30% price cut as evidence of different objectives.
“The the Chinese government may not consider that part of the objective function of what a win is. And in the past three weeks, we saw BYD take prices down 30%.”
Gurley contrasts China's 500 EV startups with only four legitimate ones in the United States.
“in EVs where there were over 500 EV startups, 500 in The US. What has there been? Four legitimate ones?”
Gurley notes DeepSeek triggered Alibaba and Xiaomi releasing open source models, with Baidu announcing June open source release.
“What happened in China, however, is Alibaba made Twin open source. Xiaomi has a model out now.”
Gurley predicts four deep-pocketed Chinese open-source AI models will create massive experimentation advantage over US.
“And so that level of competition, if it leads to four deep pocketed all open products is gonna be ultra powerful.”
Gurley notes Zippu raised $1.4 billion and appeared on OpenRouter leaderboards, illustrating rapid Chinese AI emergence.
“I go on PitchBook and I look it up and they've already raised $1,400,000,000. So shouldn't have been a secret, but I didn't know about it, you know.”
Gurley argues seven to eight deep-pocketed Chinese open-source models can distill each other to accelerate improvement.
“I think there may be seven or eight dig pocketed players with open models in China, they all learn from each other extremely fast.”
Gurley introduces farming analogy to explain competitive dynamics between open and closed innovation communities.
“I came up with a little analogy for people. I'll try and do it quickly, but imagine you had two communities. They're both farming communities and let's say there's 10 to 20 farms in each.”
Gurley says Mistral should be distilling Chinese models right now if they want to compete.
“I do expect to see that. And if I'm the Mistral team, if you're not distilling on these Chinese models, I don't know what you're doing right now.”
Gurley reports BYD executive challenges claims of Chinese subsidies, says they receive nothing as public company.
“We're we're a public company. Come show me the money I'm getting from the government. She's like, say, I'm getting nothing.”
Gurley quotes Ford CEO Farley saying Chinese vehicle cost and quality far superior, losing competition means no future.
“And he says even beyond that, their cost, their quality of vehicles is far superior to what I see in the West. We are in a global competition with China, and it's not just EVs.”
Gurley found only four of 24 CCP select committee members have visited China, last trips seven years ago.
“I did a deep dive on on your favorite product chat, GBT, $300 version deep research, and on the 24 members of the select committee for the CCP.”
Gurley reports Chinese founders and VCs study Western podcasts and speeches exhaustively while West ignores China.
“over lunch, this individual told me, you know, every founder and every VC in China studies the West at a nauseating level. So they listen to all the podcasts.”
Gurley finds only four of 24 members on China committee have visited China, last time seven years ago.
“And I think all but four have never been to China. Right. And the ones that went, it was seven years ago.”
Gurley reports Xiaomi factory produces thousand cars daily with 2,000 employees versus six per car in US.
“The factory makes a thousand cars a day with 2,000 employees. It was highly automated, like really highly automated.”
Gurley says Chinese study Western financials and speeches but West does not reciprocate for China.
“Possibly can. They study any speech. They look at the financials. And he said, the West doesn't do that of China.”
Gurley calls claims that China lacks innovation capabilities flat wrong based on direct observation during visits.
“And that's just flat wrong. Whoever's saying that just hasn't been there. They don't know the facts on the ground.”
Gurley argues America is run by lawyers while China is run by engineers, affecting infrastructure development.
“So anyway, that infrastructure thing's for real. And I think Dan Wong does a good job of saying that America is run by lawyers the author of of Breakneck.”
Gurley notes China has ten open source AI models in hyper competition versus US proprietary approach.
“Wild. And by the way, I mean, not to divert too much back, but right now China has 10 open source AI models.”
Gurley argues invisible hand capitalism with hyper competition is actively happening in China despite communist label.
“So I think the thing that a lot of people in Silicon Valley love about capitalism is this notion of the invisible hand and competition that leads to innovation and best practice, and the winners rise up and they're better for it. That is happening there.”
Gurley says Chinese entrepreneurs match US quality, citing MEMS LiDAR at $130 per car versus thousands.
“These entrepreneurs are every bit as good as the entrepreneurs they are here. There are examples like in LiDAR, they built a MEMS LiDAR product that's like $130 a car.”
Gurley says Xiaomi uses one-third the employees per car; predicts one-sixth in ten years.
“The Xiaomi factory was a third, based on some numbers I was able to acquire, a third the number of employees per car output.”
Gurley reports China builds nuclear fission plants at one-fourth the US price; South Korea does too.
“So fission being old school, not new school, at one fourth the price that we do it here in The US. So is South Korea, by the way.”
Gurley refutes claims that Chinese companies lack innovation, saying entrepreneurs there are as capable as American ones.
“Whoever's saying that just hasn't been there. They don't know the facts on the ground. These entrepreneurs are every bit as good as the entrepreneurs they are here.”
Gurley states China builds nuclear fission plants at one fourth the price of US construction costs.
“So they are building new nuclear fission plants. So fission being old school, not new school, at one fourth the price that we do it here in The US.”
Gurley quotes Dan Wong saying America is run by lawyers while China is run by engineers.
“I think Dan Wong does a good job of saying that America is run by lawyers the author of of Breakneck. Our country's run by lawyers and theirs is run by engineers.”
Gurley warns alienating trade partners could result in China serving global AI markets while America is isolated.
“I think this could even happen with AI models where there's a fence around America and China's serving the rest of the world.”
Gurley warns undiplomatic US behavior could push global partners toward China, which he observed hitting on many cylinders in August.
“And China is, I just spent some time there in August is hitting on many, many cylinders.”
Gurley warns undiplomatic behavior could push global partners toward China, which he saw performing strongly in August.
“if we are undiplomatic with our partners around the globe, that they will, it'll be more easier for them to rationalize agreements with China.”
Gurley argues open source creates hypercompetitive dynamics politicians don't understand as competitive weapon.
“I don't think the world, especially the the the politicians understand how, like unbelievably powerful open source is as a a as a weapon, like, as a competitive weapon.”
Gurley reports Chinese VCs told him Chinese founders study US relentlessly while Americans don't study China.
“They watch the YouTube interviews. They listen to the podcast. They study them like crazy. He said, founders and and VCs in America don't study Chinese.”
Gurley warns that China's open source AI dynamic creates hypercompetitive weapon politicians don't understand.
“And I don't think the world, especially the the the politicians understand how, like unbelievably powerful open source is as a a as a weapon, like, as a competitive weapon.”
Gurley predicts the US cannot stay ahead of China in AI with two proprietary models versus ten open source ones.
“I think the odds that that, you know, The US with two, you know, proprietary models can stay ahead of China with 10 open source ones is very low.”
Gurley notes AI anxiety polls in China show fraction of US levels because Chinese leaders don't do doomsday messaging.
“Why? I think it's because the leaders over there that are working on these products aren't doing the doomsday stuff that Dario is doing.”
Gurley notes AI fear polling is 20 percent in China versus 80 percent in America.
“And I think you guys mentioned this, but the polling on AI fear in China is like 20% or something like that. And it's like 80 here in America.”
Gurley warns US AI regulation could create a fence around America while China serves the rest of the world.
“I think what may happen if you look at what happened with the Internet, there was a global market that the American company served, and there was a ring fence around China.”
Gurley predicts US AI regulation could create a fence letting China serve the global market instead.
“I think what could happen with AI is we could build a fence around ourselves, and China could end up serving the rest of the world.”
Gurley says it costs 400% more to build nuclear plants in US than in South Korea or China.
“it costs four x, 400% more to build a a a fission nuclear plant, 70 year old technology in The US than it does in South Korea or China.”
Gurley argues China built a highly competitive system inside communism through provincial competition mechanisms.
“They have built, inside of a communist country, have built a system that's highly competitive. And it comes from leveraging provincial competition and some other things.”
Gurley says China had 150 EV car companies, creating more intense competition than in the US.
“And you'll see, there were 150 EV car companies there. So hyper competition. In fact, I could argue the model they've created has more intense competition than we have here.”
Gurley argues China has built a system with more intense competition than the United States.
“In fact, I could argue the model they've created has more intense competition than we have here.”
Gurley argues China's open-source AI models create a system capable of innovating faster than closed US models.
“And the other society, when the farmers come to market, they're forced to share best practices with all the other farmers. Which which one of those is gonna gonna evolve faster?”
Gurley describes how China's digital payment system lets people pay for everything via QR codes.
“You scan a QR code, like, at a you check out of a restaurant. Like, can just pay at your table. There's a QR code on the table.”
Gurley says China's instant transfers enabled Alibaba and Tencent to build wallets used for everything from street vendors to cars.
“In China, because they had this digital immediate transfer, Alibaba and Tencent were able to very quickly build digital wallets that people carry around.”
Gurley uses agricultural metaphor to argue Chinese open source AI models create faster innovation through mandatory knowledge sharing.
“imagine you have two societies and both agricultural societies. And one of them, whenever all the farmers come to market, they just sell each other goods and then they go back.”
Gurley uses a farming metaphor to explain why China's open source AI models may innovate faster than closed US models.
“I'll use a simple metaphor, but imagine you have two societies and both agricultural societies.”
Gurley says Chinese entrepreneurs have greatest cultural affinity with American entrepreneurs globally based on social interactions.
“the one place where I find the most cultural affinity between entrepreneurs, between American entrepreneurs and some foreign entrepreneurs, China. Like, the most like mindedness.”
Gurley finds Chinese entrepreneurs have the most cultural affinity with American entrepreneurs globally.
“of all the places I've visited around the world, the one place where I find the most cultural affinity between entrepreneurs, between American entrepreneurs and some foreign entrepreneurs, China. Like, the most like mindedness.”
Gurley suggests highlighting state versus state competition in US modeled on China's provincial competition.
“I'm I'm enamored by the provincial competition in China, and I wonder if shining a brighter light on state versus state competition could lead to some pretty amazing and positive things for our own country.”
Gurley questions whether X explicitly confirmed Chinese origin of bot farm operation
“@GlobalAffairs @grok did @x confirm that the efforts were tied to China? They didn’t say that explicitly.”
Gurley questions whether X explicitly confirmed Chinese origin of bot farm operation
“@GlobalAffairs @grok did @x confirm that the efforts were tied to China? They didn’t say that explicitly.”