Patel explains China can only buy A100-level GPUs from NVIDIA due to export controls, not H100s.
“Well, so NVIDIA made a special version of their a 100 GPU that can ship to China, and so that's that's pretty much it.”
Patel says ASML projects China will grow from under ten percent to thirty percent chip manufacturing market share.
“Go from sub 10% market share in the chip industry to somewhere around 30% market share in the manufacturing industry, right?”
Patel says SMIC's Shanghai fab has 45 to 50 high-end lithography tools enabling 60,000 wafers monthly at seven nanometer.
“Shanghai has anywhere from 45 to 50 high end immersion lithography tools is is what's like believed by intelligence as well as like many other folks.”
Patel asserts chip export controls to China are working effectively despite smuggling through third countries.
“The chip side of things is actually being controlled quite effectively, I think. Right? Like, yes, there is, like, shipping GPUs through Singapore and Malaysia and and other countries in Asia to China.”
Patel claims China could match individual US labs in compute by 2025-26 through centralization alone using foreign chips.
“China can be centralized enough to compete with each individual US lab. They could have just as many flops in '25 and '26 if they decided they were scale built. Right? Just from foreign chips”
“if they put them all in one cluster, they could have a bigger model than any of the labs next year. Right?”
Patel claims China could build a gigawatt data center in six months near Three Gorges Dam due to power infrastructure.
“China could just build it in six months, I think, around the 3 Gorges Dam or many other places. Right? Because they have they have the ability to do the substations.”
Patel says China could build a bigger model than any US lab next year using 600,000 domestic Ascend chips.
“You know? So so if they put them all in one cluster, they could have a bigger model than any of the labs next year.”
Patel says China still receives over a million NVIDIA H20 GPUs annually despite October sanctions.
“Right? Because you have you have sanctions on how many NVIDIA GPUs you can get in. Now, they're still north of a million a year.”
Patel suggests China could centralize all GPUs under one entity if Xi Jinping becomes scale-pilled, avoiding US data center constraints.
“If you're Xi Jinping and you're scale pilled, do you just say x y z company is now in charge Yeah. And every GPU goes to one place.”
Patel says China could train a bigger model than US labs next year if they centralize 600,000 Ascend chips.
“they could have a bigger model than any of the labs next year. Right? I I have no clue where, oh, the Sen nine ten b's are going.”
Patel says China could centralize over a million NVIDIA H20 chips into one data center if scale-pilled.
“they can centralize the chips like crazy. Right now, oh, oh, million chips that NVIDIA shipping in q three and q four, the h twenty, let's just put them all in this one data center.”
Patel claims China could build a gigawatt data center in six months near the Three Gorges Dam but hasn't.
“China could just build it in six months, I think, around the 3 Gorges Dam or many other places. Right?”
Patel argues US export controls are counterproductive because China can now build better chips domestically than what's allowed for export.
“They can build better chips in China, then we restrict them in terms of chips that NVIDIA or AMD or an Intel can sell to China.”
Patel argues current export controls are flawed because China can build better chips domestically than what West can sell them.
“the equipment that is shipped can be used to build chips that are better than what the Western companies can actually ship them. John, Dylan seems to think the”
Patel argues Western power grid supply chains have not expanded in decades unlike China, India, and Indonesia.
“The Japanese power grid has been like this. The Korean power grid has been like Only China and India and Indonesia, their power grids have been growing really fast.”
Patel says Malaysia will add three gigawatts of data center capacity by 2027, mostly Chinese companies claiming to be Singaporean.
“Malaysia from 2024 to 2027, not the country itself, but companies operating there, mostly Chinese companies, many of them claiming they're now Singaporean companies. Right?”
Patel says Chinese data center companies are building three gigawatts in Malaysia by 2027, claiming Singaporean status.
“Like, the largest operator in China of data centers in China, GDS, moved to Singapore and says they're Singaporean now. It's like but now they're these companies are building three gigawatts of data center capacity.”
Patel argues export controls aim to limit AI usage scale in China, not prevent AGI development.
“And I think that is a much easier goal to achieve than trying to debate on what AGI is.”
Patel argues export controls primarily limit AI inference deployment in China, not frontier model training capabilities.
“A large part of export controls, if they work, is just that the amount of AI that can be run-in China is going to be much lower.”
Patel reports China imported one million H20 GPUs in recent quarters, enough for largest cluster.
“Just in Q3, Q4 and the early part of Q1 this year, they imported a million H20s, Right?”
Patel reports ASML had 45% of equipment and more of revenue from China despite export controls.
“On equipment though, last year ASML, many quarters they've had 45% of their equipment and even more of their revenue come from China.”
Patel reports ASML had 45% of equipment and more of revenue from China despite export controls.
“On equipment though, last year ASML, many quarters they've had 45% of their equipment and even more of their revenue come from China. And likewise for ASML, Lam Research and all these companies, right?”
Patel challenges DeepSeek's GPU count claims, citing job ads promising tens of thousands of GPUs.
“The estimates that we have is, so first of all, ads in China, they say they have tens of thousands of GPUs for researchers, right?”
Patel says China imported one million H20 GPUs in recent quarters, enough to build largest cluster.
“This is more than enough if they even took 30 of it, concentrated it, to be a bigger cluster than any American company has.”
Patel says DeepSeek's cost efficiency follows the expected trend line, just from an unexpected source.
“It's not unexpected. Right? Like, this is actually within the trend line of what happened with GPT three is happening to GPT four level quality with DeepSeq.”
Patel argues the surprise was a Chinese company achieving this cost reduction, not the reduction itself.
“I think what was really surprising was that it was a Chinese company for the first time. Right? Because Google and and OpenAI and Anthropic and Meta have all traded blows.”
Patel describes Chinese manufacturers as locked in constant cost reduction cycle rather than margin expansion.
“there's this constant pressure cooker of continual cost reductions and engineering. It's not like, Oh, well, we make 80% margins. Our cost is low.”
Patel notes China was importing majority of robots as recently as 2022 from Japan and Germany.
“even as near as twenty twenty two, the majority of China's robots were being imported. Right? Japan and Germany being the largest market share players, but also USA, Korea is also in there.”
Patel forecasts that 70% of robots deployed in China in 2025 will be domestically manufactured Chinese robots.
“'24, it's, it's rapidly growing Chinese share. And '25 is it looks clear, like, the the market shares is, you know, gonna be 60 is gonna be, like, 70% Chinese robots for China's domestic usage.”
Patel explains Chinese companies use cost-plus pricing instead of price-to-value, avoiding margin expansion despite market dominance.
“Whereas Chinese companies are almost all cost plus. They're not price to value. They're cost plus. Right?”
Patel notes that as recently as 2022, most of China's robots were imported from Japan and Germany.
“And so even as near as twenty twenty two, the majority of China's robots were being imported. Right? Japan and Germany being the largest market share players,”
Patel explains Chinese manufacturers use cost-plus pricing rather than value-based pricing across industries.
“They're not price to value. They're cost plus. Right? And so you've got this interesting phenomenon where, there are industries in China where the entire world relies on it.”
Patel asserts America cannot manufacture robots and Germany/Japan are losing capabilities to China.
“Germany and and Japan are losing a lot of their capabilities to do so slash the cost of their robots are just way, way, way higher than what China can do.”
Patel states that Japan, USA, Korea, and Germany combined deploy only a third of China's robots in 2023.
“You fast forward to 2023, and all four of these countries combined, right, are still a third of China's robot deployments.”
Patel reveals that China purchased two top German robotics companies and transferred their servo and actuator production to China.
“Two of Germany's best robotics companies were actually purchased by China, And a lot of their, servos and actuator construction was actually transferred to China.”
Patel notes many Chinese companies dominating global markets have flat or declining stock prices.
“there's so many companies on the Hangshan, the Hangshan, which is a stock market in China, right, whose stock has literally been flat or down despite the fact that they own the global market.”
Patel contrasts Western price-to-value strategy with Chinese cost-plus pricing model in manufacturing.
“Whereas Chinese companies are almost all cost plus. They're not price to value. They're cost plus. Right? And so you've got this interesting phenomenon where,”
Patel notes that as recently as 2022, China imported the majority of its robots from Japan and Germany.
“even as near as twenty twenty two, the majority of China's robots were being imported. Right? Japan and Germany being the largest market share players,”
Patel predicts China will stop open sourcing AI models once ahead and closed source will ultimately win.
“China's open sourcing stuff only because they're behind the moment they're ahead, they will stop open sourcing stuff. And at the end of the day, closed source will win. Unfortunately, closed source will win.”
“But, like, you know, can you give them no GPUs? No. They're gonna retaliate. Like, there is a middle ground, and, like, Huawei is eventually going to have a lot of production capacity,”
Patel estimates NVIDIA had north of $20 billion in China H20 revenue that had to be written off after ban.
“Our our revenue estimate for NVIDIA in China for just h 20 was north of 20,000,000,000 because that's what they were booking in capacity slash had to write off.”
Patel says China increased lithography imports to 40% of equipment spending to stockpile before bans took effect.
“They were importing lithography at a much higher rate than that. Right? Like, 40% of their equipment imports were lithography, and they were stockpiling lithography equipment.”
Patel estimates NVIDIA had over $20 billion in H20 China revenue booked before ban and write-off.
“Our our revenue estimate for NVIDIA in China for just h 20 was north of 20,000,000,000 because that's what they were booking in capacity slash had to write off. Yeah. And then it got banned.”
Patel frames AI competition as economic war determining whether China rises to global hegemony.
“at the end of the day, this is an economic war. Right? If The US and the West win in AI and control, you know, more powerful AI systems that have this feedback loop that improve economic growth and weapon systems and whatever else, right, engineering of grids and cyber attacks and all these sorts of things.”
Patel predicts AI industry will hit $100 billion ARR by end of 2025, with China 10x lower.
“And then what's the economic value of that $100,000,000,000? Now, how much of that is in China? Right? Like, China's number is probably 10 x lower.”
Patel argues Western AI dominance determines whether China becomes global hegemon; without it, China will win economically.
“They have this like advantage over China, then China will not rise to be the global hegemony. But without AI, China definitely will rise to be the global hegemony.”
Patel argues US AI dominance across economic and military systems will prevent China from becoming global hegemon.
“They have this like advantage over China, then China will not rise to be the global hegemony.”
Patel says China's entire culture is semiconductor pilled with romance dramas set in fabs and solar research.
“There are dramas where people fall in love in the fab or dramas where people fall in love and they're photovoltaic, like, solar cell researchers and engineers.”
Patel says China's entire culture is semiconductor-focused, even appearing in romance dramas.
“I think the entire country is like semiconductor pilled. Mhmm. Right? There are dramas where people fall in love in the fab or dramas where people fall in love and they're photovoltaic,”
Patel claims China has the most vertical semiconductor stack and could run fabs independently unlike TSMC.
“China has the most vertical stack in semiconductors today and they're the best at semiconductors in the world because their fabs could still run somewhat on a lot of things because they have built some of these chemical supply chains. Right? Like TSMC for certain kinds of chemicals 100% share from Japan.”
Patel notes China has a fully self-sufficient vertical semiconductor supply chain, though behind by three to fifteen years.
“China has a vertical supply chain. Yes. In many cases, it's fifteen years behind, ten years behind, in some cases, only three years behind.”
Patel identifies semiconductors, AI, and aerospace engines as the only three industries China doesn't own.
“There's only two industries three industries they don't own. Semiconductors, it's AI, and it's aerospace engines. Right? It's those three things.”
Patel claims all good open source models are Chinese, with American and French models being terrible.
“American open source models are terrible. French open source models. Well, Mistral just stopped open sourcing models really. Are there any of the good ones? So it's it's all Chinese open source models.”
“Base Ten, like Tuhin's probably made more money off of, you know, Minimax or GLM or DeepSeq than those companies have because he's serving those models at scale. And same with, Linett Fireworks.”
Patel says nothing will meaningfully slow AI progress, especially petitions ignoring China's role
“@AkashDwivedi5 They will. Nothing will slow down the progress meaningfully. Especially not petitions that don't care to understand China's role here”
Patel says nothing will meaningfully slow AI progress, especially petitions ignoring China's role
“@AkashDwivedi5 They will. Nothing will slow down the progress meaningfully. Especially not petitions that don't care to understand China's role here”
Patel says SemiAnalysis has more China compute mapped than cited estimate
“@RothRottweiler @aqib_zakaria @hamandcheese @SemiAnalysis_ Idk about all that chief. We have more compute for China mapped than this”
Patel says SemiAnalysis has more China compute mapped than cited estimate
“@RothRottweiler @aqib_zakaria @hamandcheese @SemiAnalysis_ Idk about all that chief. We have more compute for China mapped than this”
Patel claims Triolo's clients are Chinese SOEs and he was removed from prior organizations
“@joshrogin @pstAsiatech You know his clients are Chinese SOE right. Looking to why he was thrown out of prior organizations he was part of”
Patel points to Politico piece showing Triolo's firm lobbies for China
“@joshrogin @pstAsiatech There's info everywhere about this. Talk to prior firms he's worked with. I'll give you a tiny breadcrumb, a politico piece showing that his firm lobbies for China https://t.co/SnM8y8w4Nz”
Patel points to Politico piece showing Triolo's firm lobbies for China
“@joshrogin @pstAsiatech There's info everywhere about this. Talk to prior firms he's worked with. I'll give you a tiny breadcrumb, a politico piece showing that his firm lobbies for China https://t.co/SnM8y8w4Nz”
Patel claims CCP-funded organizations are running anti-datacenter and anti-AI campaigns
“There's quite a bit of CCP funded anti datacenter and anti AI organizations. Just follow the money. https://t.co/Cbdomf6hUL”
Patel claims evidence exists of organizations astroturfing false datacenter narratives with non-domestic funding
“@suchenzang There's a lot of evidence of organizations astro turfing false narratives about datacenter water use and noise, having funding from non domestic sources. Not sure what he accusing me of tho? I always tweet what I believe Surely you're not saying I have some alterior motive”