When I the saw the video from Crowhouse, I just had to share it. In that video, Whitney Web was refencing a document that was obtained via the Freedom of Information Act. I was so interested in what she was sharing, I had to get a copy of the document for myself. I am posting here in full. You really need to read it!
I have been saying since the beginning that CoronaVirus is not about disease. It is about setting up the Totalitarian Government known as the NEW WORLD ORDER.
Don’t you find it interesting, after all the fuss they made about the name COVID 19, they often refer to it as Corona Virus.
DISCLAIMER: In my posts I normally collect a number of written articles and videos related to the topic. I hightlight in red or black the parts of the articles that I think are important to note and try to leave it to the reader to come to their own conclusions. The object is to bring the facts/truths to your attention and cause you to look further into them yourself. Why? Because that is the only way to make the subject real to you. When you view the available information, search it our on your own, hopefully guided by the Holy Spirit, YOUR CONCLUSION is exactly that YOURS. It means something to you. It may be similar to mine or it may be completely different. We are all on our own course and in different places with our spiritual development. I pray that GOD speaks to you in a way that touches you. IF you see notes in green, those are my comments. Anything else, you find the source links on the titles, and the author and date will be below the titles. Just because I post an article or video in my articles, it does not mean that I agree with the author or support their stand. It does mean that I felt there was worthwhile information to be gleaned.
I want you to think about this. Bill Gates is not trained in medicine. He made his money in computer software. He has made it very clear that what turns him on is results that can be shown in NUMBERS. He loves to run simulations. He loves to count the numbers of innocent children injected with his poison concoctions. I believe he has had much more to do with this plan to destroy our economy, our independence, or self reliance, our rights, our peace, our joy, our future, and most importantly our children, who may now not even have a future.
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THE COVID-19 PLANDEMIC – AN AGENDA FOR RAPID DEPOPULATION AND TOTAL A.I. CONTROL (BANNED BY YOUTUBE)
Whitney Webb – Security State Using Coronavirus To Implement Orwellian Nightmare:
https://www.youtube.com/watch?v=bGMkSNj_-7Q&feature=share
CDC BUSTED LYING & MANIPULATING DATA | #debunkthisfauci
https://www.youtube.com/watch?v=QINcr5BCN7A
CDC’s Numbers 100% Destroyed by Street Dude With a Piece of Cardboard:
https://www.youtube.com/watch?v=nBAvyq34_OI&t
Dr. Erickson COVID-19 Briefing:
https://www.youtube.com/watch?v=xfLVxx_lBLU&t
EX-RUSSIAN INTEL OFFICER: Depopulation agenda is real
https://www.youtube.com/watch?v=t2vqjBtnltI&feature=youtu.be
Aleksandr Solzhenitsyn – 200 Years Together pdf:
https://mega.nz/file/iK4XBKbA#tzVBkH71Xg0l4R4WaqbvFnsMw7-Cs9JiWWPe4I0DUnQ
“The illusion of freedom will continue for as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will take down the scenery, move the tables and chairs out of the way, then they will pull back the curtains and you will see the brick wall at the back of the theater.” – Frank Zappa
“A single person who stops lying can bring down a tyranny” Alexander Solzenitsyn
THROW AWAY YOUR SMART PHONE!!
THIS VIDEO MUST BE VIEWED ON BITCHUTE: CLICK HERE
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FOOD SHORTAGE – I can tell you that for the last 5 years I have been watching them gearing up for the coming food shortage. They started by cutting stores back to as needed stocking. No more keeping back up in the back room. Everything they had was on the shelf and you would have to wait for the next shipment. I watched the shelves getting steadily more scantilly stocked. Very little choices anymore very limited brands and few products from them. I asked about it, frequently. I told my friends, they hadn’t really noticed. They they started renovating the stores, to allow for online shopping, and self check out. Then they added drive up pick up. The shelves were getting more and more empty. One day I walked in and there was NOTHING in the entire Freezer aisles. When I asked why, they just shook their heads.
I have also been watching the trucking industry getting totally revamped and cut back. Then the introduction of driverless Trucks. The use of trains that carry trailers stacked four high, to minimize the amount of distance they products need to travel by truck. Truckers were getting less and less money and fewer and fewer assignments/contracts.
ISOLATION: For years they have been gearing up for isolation. Putting us all in cubicles, changing our job descriptions to very specific, limited tasks, compartmentalized, no team work. Then the work from home options, where we could do some or all of our work from our home computers.
MEDICAL NEGLECT/MURDER they have been trying for at least 20 years now to get the telemedicine idea to take off. They have offered online psychological support, nursing advice, even full medical visits. No one wants them. We prefer face to face contact.
TOTALITARIAN CONTROL – They have been working for at least 20 years to convince us that we don’t have any rights to make our own choices for ourselves or our children. They have convinced us that they have the right at anytime to decide we don’t have a right to raise our own children. They can be taken away from us. Even when they are in our homes, we are made to believe that we don’t have any right to correct them, to discipline them, to make any medical decisions for them or even to choose where they will attend school.
RACE FOR DOMINATION THROUGH ARTIFICIAL INTELLIGENCE – US and CHINA Since WWII they have been in a constant race against some perceived enemy for domination in the realms of science, space and technology. This perceived threat gave them carte blanche to devise any bizarre experiments and developments, no matter the risks or the known detriments.
Now that they have their AI Technology, they are ready to bring to fruition all their plans and wet dreams. They are convinced that they are beyond any intervention. The power of AI, gives them so much advantage the masses are defenseless.
This pandemic is the culmination of all their simulations. They have played out all the possibilities and found that this is the vehicle to bring about the implementation of all their diabolical plans.
They have run all their exercises and their false flags and fed all the data gained into the SUPERCOMPUTERS. They are prepared for all possible scenarios. Or, so they believe.
Don’t think for a moment that China magically developed to surpass all other nations. I remember when I was in school, China was still living in the dark ages. Rice paddies and oxen. They did not rise to be the most advanced Super Power in a matter of a few decades without A LOT OF HELP. It is all a chess game, but one that is fully rigged. The entities moving the players already know what is coming.
The following document is just chuck full with the praises of CHINESE Orwellian AI/IT system. Our government is just drooling at the prospect of gaining such total control over our citizens. You need to read this document. If it does not wake you up, I don’t know what will. And it is not just our government that has joined their admirers seeking to mimic their image. The Chinese have been working with EVERY GOVERNMENT that is in the UN, training and coaching them, sharing their successes stories and helping them build their own infrastructure base on total control.
If you have not seen my articles on China, check them out:
CHINA CONTROLS OUR MEDS?? – THAT IS INSANE!!
Are we totally insane? I know we like to save money whenever possible. It is bad enough that just about everything we purchase today comes from China. From kids toys to the clothes on our backs, from plasticware to power tools. BUT, for heavens sake, do we really trust China enough to be buying our … Click Here to Read More
Chinese Police Establishing Presence in the USA? Are they hoisting the “Red” Flag?
I doubt that many of you have seen any of the articles about the Chinese Police showing up in US cities. Some claim they are only impersonators…but there is evidence to the contrary. Regardless if they are real or just representatives… the message is clear. The Chinese and other Asian people living in the USA … Click Here to Read More
CHINA INVASION? Has TRUMP been making secret strategic moves to save the USA?
Here is an article from Christopher Green of AMTV. He presents some important data that I have not seen anywhere else. He also raises some very interesting questions regarding current events in California. Events that tie to the Fires, Blackouts and HAM Radio issues. I thought you ought to have an opportunity to consider these. … Click Here to Read More
Welcome to the Future – China the MODEL Government
If you don’t believe we are headed down this path, take another look at what is already happening to individual rights in this country. Parents no longer have any rights to decide what is best for their children, individuals have no rights to freedom of speech, our rights to keep and bear arms are disappearing … Click Here to Read More
Chinese Tech Landscape
Overview
NSCAI Presentation
EPIC: 2019-001-000602 May 2019
epic.org EPIC-19-09-11-NSCAI-FOIA-20200331-3rd-Production-pt9 000535
“Core tech” vs. “tech enabled” businesses
| Being regarded as a core-tech business is glamorous — everyone wants to believe and talk about their technological capabilities as a moat. But there are few industries where that ‘s actually the case.
o e.g. mass deployment of machine vision for medical diagnosis is not blocked by the tech. It is more useful to understand most of these companies as “tech-enabled businesses”. o e.g. Facebook, Uber, Linkedin, and Airbnb derive their power from network effects. Amazon’s e-commerce platform derives its power from heavy capex. |
THE PLAYERS
BAT (Baidu, Alibaba, Tencent) – The Big 3
|
Tencent ($504B Valuation): Social and gaming. Best known for creating WeChat. Also the largest gaming company in the world. 60% of all mobile time in China is spent on Tencent properties. Baidu ($78B Valuation): Search. Search is much less relevant in the Chinese market. so Baidu is much smaller than its contemporaries. |
 |
Bytedance, Meituan, Didi – The New Generation
| Bytedance ($75B valuation): Owner of several other media platforms that serve content based on Al recommendations (rather than social graph ). including TikTok, the fastest growing social video app in the world.Meituan ($40B Valuation): Started out in group buying (Groupon) and restaurant reviews (Yelp). they own food delivery , and are expanding into other on-demand services. Didi ($70B valuation): Ridesharing giant with roughly 1.Sx the volume of Uber and Lyft combined. They call themselves “the world ‘s largest transportation platform.” |
 |
SenseTime, Yitu, Face++, Cloudwalk – Al Surveillance Unicorns
| China’s surveillance boom has created an anchor customer for cloud machine vision services, birthing companies like Sense Time (>$4.5B}, Yitu ($2.4B}, Face++ ($2B}, Cloudwalk ($2B}. o “When we talk about data resources, really the largest data source is the government.” -Sense Time CEO Xu Liu (Source) Now that these companies are operating at scale they are building a host of other services (e.g. facial recognition for office buildings, augmented reality) They are also expanding into other countries, and verticals. Andrew Ng demonstrating facial recognition for office building entry. |
 |
Xiaomi, BYD, DJI – Hardware giants
| • Xiaomi ($36B): One of the world ‘s fastest growing smartphone brands, recently became the biggest smartphone maker in India. They also own 20% of Ninebot, the company that makes • BYD ($21B): China is the world’s leading electrical vehicle market, and BYD is the largest manufacturer (by volume). More than 500,000 electric buses in China vs. <1,000 in the US. • OJI ($15B): short for ··oa Jiang Innovation ” (7′:ijl~ 1Jffi), is the first Chinese company to build a globally dominant consumer brand, running away with the consumer drone market (72% market share). |
 |
International Expansion and its Consequences
China’s Tech Presence Abroad – Examples
| • Strategic investments: Tencent has deployed $628 in over 350 companies since 2012 in disclosed deals alone. They have strategic stakes in GoJek, Snapchat, Reddit, Tesla. • Acquisitions: Alibaba owns PayTM (India’s largest payment app), Lazada (Indonesian ecommerce). Didi owns 99, the largest ride -sharing app in Brazil. • Direct product launches: TikTok is the world ‘s hottest new social app, with hundreds of millions of users and significant cultural relevance. • Pilots: Surveillance is being piloted by various governments around the world. Kuala Lumpur (Malaysia’s capital) is piloting Alibaba ‘s City Brain smart city system. |
 |
New Escalation Paths in the Global Tech Ecosystem
| Bytedance confronts the same problems with moderation as Facebook. • Bytedance ‘s Helo news app in India is being lampooned for being a breeding ground for sensationalist inflammatory content. • Indonesian authorities said on Wednesday they had banned Chinese video app Tik Tok forcontaining “pornography, inappropriate content and blasphemy “. (SCMP) (Tech in Asia) What happens when the company in charge is Chinese? • What decisions will their leadership make? (given a different ideological vantage point) • To what extent could the government compel Chinese tech giants to take action with their foreign properties? • How much control do the Chinese players have in companies they ‘ve invested in given the leadership and employees are still based in other countries? |
Creation, Adoption, Iteration.
| • The US leads in the “Creation” stage. Core technology and new user paradigms are still largely invented here. • But “Adoption” happens far more quickly in China due to structural factors. The most significant of these are … 1. Lack of legacy systems e.g. lack of credit cards = mobile payment 2. Scale of consumer market e.g. extreme urban density= on-demand service adoption 3. Explicit government support and involvement e.g. facial recognition deployment • Iteration: What happens when you have a huge highly receptive user-base to iterate on, and the investment that justifies? Eventually. the resultant experience has evolved so much that it is nearly unrecognizable |
Digital Payments – An Adoption Defined Vertical
| • Creation: Paypal pioneered the digital payments space. • Adoption: Payment app volume in China was $12.8T in 2018 (vs. $5788 for Paypal in 2018). The lack of legacy banking systems in China combined with the insatiable demand of a huge e-commerce and digital services market led to the mass adoption of digital payments. • Iteration: When everyone handles money in the same 2 apps. many things can be built on top. Alipay’s Yu’e Bao savings feature is the biggest money market fund in the world at $233B (passing JP Morgan) • Heavy Investment: In 2018 Ant Financial raised as much as all other fintech companies globally combined at a purported $150B valuation. • Global Expansion: Pay TM. India’s largest payment app, is >50% owned by Alibaba. They are following a similar playbook in another market that has leapfrogged from cash to digital (skipping credit cards altogether) |
Invalid American Advantages
| • Capital: This is no longer a meaningful constraint on either side of the ecosystem. The Chinese venture ecosystem is at the same scale as the US. • Market size: During the dot-com boom. the US had the largest domestic market of internet users. allowing new paradigms to scale faster here than anywhere else. This has been turned upside down. • “Culture of innovation”: both China (e.g. Confucian values. 4 ancient inventions. the Middle Kingdom etc.) and the US (e.g. Puritanical work ethic, nation born from rebellious spirit. etc.) confidently claim cultural exceptionalism in their societal psychology that makes them uniquely conducive to innovation. But it’s not clear to me that one culture is concretely more exceptional than the other. or that this framing is a compelling way to explain what is going on or predict what will happen next. |
In China, there are more than 20 apps with 150+million users (!!!). Of the 20 top apps by time spent, a whopping 13 are owned by BAT and 4 have received a significant operational investment from BAT. The remaining 3 are owned by Toutiao. 6 video platforms are among the top 20 apps in China.
Creation, Adoption, Iteration.
| • The US leads in the “Creation” stage. Core technology and new user paradigms are still largely invented here. • But “Adoption” happens far more quickly in China due to structural factors. The most significant of these are … 1. Lack of legacy systems e.g. lack of credit cards = mobile payment 2. Scale of consumer market e.g. extreme urban density= on-demand service adoption 3. Explicit government support and involvement e.g. facial recognition deployment • Iteration: What happens when you have a huge highly receptive user-base to iterate on, and the investment that justifies? Eventually. the resultant experience has evolved so much that it is nearly unrecognizable … |
Digital Payments – An Adoption Defined Vertical
| • Creation: Paypal pioneered the digital payments space. • Adoption: Payment app volume in China was $12.8T in 2018 (vs. $5788 for Paypal in 2018). The lack of legacy banking systems in China combined with the insatiable demand of a huge e-commerce and digital services market led to the mass adoption of digital payments. • Iteration: When everyone handles money in the same 2 apps. many things can be built on top. Alipay’s Yu’e Bao savings feature is the biggest money market fund in the world at $233B (passing JP Morgan) • Heavy Investment: In 2018 Ant Financial raised as much as all other fintech companies globally combined at a purported $150B valuation. • Global Expansion: Pay TM. India’s largest payment app, is >50% owned by Alibaba. They are following a similar playbook in another market that has leapfrogged from cash to digital (skipping credit cards altogether) |
Relative Competencies: “Core tech” vs. “tech enabled” businesses
| • Being regarded as a core-tech business is glamorous — everyone wants to believe and talk about their technological capabilities as a moat. But there are few industries where that ‘s actually the case. o e.g. mass deployment of machine vision for medical diagnosis is not blocked by the tech. o There are relatively few “core tech businesses” that compete in markets where cutting edge technology is the primary axis of competition and barrier to entry (e.g. Intel, Nvidia, Waymo) • It is more use ook, Uber, Linkedin, and Airbnb derive their power from network effects. Amazon’s e-commerce platform derives its power from heavy capex. |
| Semiconductors are the canonical vertical where the bottleneck is core tech, not adoption.
Hence the US leads the world, and chips are a larger import than oil for China. |
 |
Open Questions for the Future of Technology
• In which other “tech-enabled ” verticals will China’s adoption advantage allow it to leapfrog the US?
o My predictions: Al medical diagnosis, smart cities
• How does the US defend its advantage in core creation?
• For verticals where Chinese companies are world leaders expand beyond Chinese borders?
o What does it mean for Chinese tech giants to have control of pieces of critical digital infrastructure in other countries? (e.g. Indian financial system)
o Who makes decisions? To what extent can they stand up to the government?
The Importance of a US/ China Al Cooperation
• “I supervised an arms control negotiation with Russia, but we have no
way of talking about this with Al.” -Henry Kissinger
• Today, we can’t even get everyone in the same room to set international
norms on global problems …
o Immediate Term: ML fairness, interpretability, data privacy etc.
o Medium Term: cyber warfare, social upheaval from automation of
labor, autonomous weapons, Al applications in diplomacy. etc.
• The future will be decided at the intersection of private enterprise and policy leaders between China and the US. We risk being left out of the discussions where norms around Al are set for the rest of our lifetimes. Apple, Amazon, Alibaba, and Microsoft will not be.
1 Social Credits
• Western media coverage of China’s “social credit system” goes something like this — there is a system being instrumented where each citizen is given a 3 digit score based on everything they do (what they buy, where they go, who they associate themselves with) and this score decides their lives (where they work , where their kids go to school , whether they can ride trains).
• This does not reflect the situation on the ground. Confusion is rooted in the conflation of 2 distinct pieces —the government’s digital blacklists aimed at making law enforcement more efficient , and Alibaba’s Sesame Credit initiative which functions like a FICO score combined with a customer loyalty program.
• There are experimental initiatives by local governments to rate citizens. But so far these are inconsequential pilot programs , with no real punishment for having a low score.
Judgement Default Blacklist 
• The notorious blacklist of “people deemed untrustworthy” refers to the Supreme People’s Court Nationwide Judgement Default Blacklist (~il-~fi .A.!6 l(!). (viewable at this link) Contrary to popular belief, being blacklisted is not caused by a government issued score falling below a certain threshold; in reality, citizens are placed here for failing to follow a court order. This is a binary decision made by humans, with no algorithmic decision making involved.
• The blacklist is primarily an effort to combat China’s rampant fraud and white collar crime. Court orders specifically mentioned in the plan include evading taxes, not paying debt, not paying fines, and selling fraudulent goods. Most punishments for being on this list are business-related also — e.g. being unable to serve as a corporate director , purchase real estate , getting permits in regulated sectors, receive government subsidies and, of course , the notorious train and air travel restrictions.
• US Equivalent: In the state of New York if you owe >$10K in taxes, you can have your driver’s license suspended.
Alibaba’s Sesame Credit 
US Equivalent: Customer Loyalty Program (e.g. Amex Platinum Card)/ Amazon Seller Ratings/ mini-FICO (score can only be used on Alibaba’s platform)
There are no consequences for having a low Sesame Credit score
• Benefits for a good score are similar to what you’d find in a credit card reward program.
• The biggest one is not havinCJ to pay upfront deposits for services like bike sharing, hote ls, and other groups Alibaba has partnered with.
This score is not calculated as a result of being a “good citizen”
• It’s based on activity within Alibaba’s platform (digital payments and e-commerce) and primarily driven by financial activity (history of repayment, purchases, income etc.)
There is no evidence that Alibaba is helping to build the national social credit system
• This misunderstanding stems from a pilot program by the National Internet Finance Association to create a new financial credit rating system (i.e. FICO)
• All 8 participants (including Alibaba) were denied a license to establish an official credit rating company — meaning these Sesame Credit scores can’t even be used at traditional banks to get a loan.
Real Name Verification 
Today, as a result of new regulations around Real Name Verification (~45\,\.iiE), to get a phone number or use online services in China you needed to register with your real name and unique government ID number. This creates a centralized identity layer with major consequences …
1. Destroying the concept of anonymity on the internet. Every username can be traced back to a government ID.
2. Trivial reconciliation of individual data across disparate systems (government and private) thanks to a universal unique key — the government ID number.
How could this become draconian?
1. A standardized nationwide system is deployed contingent on the success of local pilots
2. Material consequences for citizens with bad scores are put in place afterwards.
3. Citizens are tracked across all surfaces with data integration across government (municipal and national) and private tech company data.
4. Algorithmic decision making processes are put into place. Right now scores are determined by decisions from human bureaucrats.
5. Extrapolation based on user profile. The government could start scoring citizens based on demographic profile and predicted future actions. (effectively predictive policing)
2 Strategic Investment
• Chinese tech giants expand to new verticals and locales by making strategic investments .
•
• Tencent has deployed $62B in over 350 companies since 2012 in disclosed deals alone.
• Globally they are finding local champions analogous to their core businesses.
o Alibaba: PayTM and Lazada
o Tencent: League of Legends, Fortnite
■ Strategic Stake: GoJek, Snapchat. Reddit
• Open Questions
o How much control do the Chinese players have? Although they own equity stakes, the
leadership and employees are still based in other countries
o To what extent could the government compel Chinese tech giants to take action with
their foreign properties?
02/ THE BATTLE FOR THE NEXT BIL LION USERS
Spectrum of Investments
| 02/ THE BATTLE FOR THE NEXT BIL LION USERS Alibaba and Tencent were both jumpstarted by Strategic Investments • In 2000, Softbank invested $20M in Alibaba. That stake was wo rth $90B at the t ime of Alibaba’s IPO. • Naspe rs invested $34M in Tencent when it was j ust a start-up. That stake is now wort h $114B. • These have been long, fru itful relationships . o Naspe rs still sits on Tencent’s boa rd. o Softban k CEO Masayos hi Son is on Alibaba’s boa rd o Alibaba founder Jack Ma is also on Softbank’s board. • So strategic investme nts are embedded in their DNA. |
 |
Softbank and Didi are carving up the world.
Didi Chuxing ($SOB valuation). China’s dominant ridesharing company, is partnering with Softbank to make strategic investments in ridesharing companies around the world.
• Softbank invested $SB in Didi, and Uber owns 17.7% of Didi from the sale of their China operations in 2016.
• Baidu, Alibaba, and Tencent are all invested in Didi. Additionally, Softbank owns nearly a third of Alibaba, has had an alliance with them for nearly 2 decades, and their founders sit on each other’s boards.
o See also: go/ChinaRises2 – International Expansion Section
• Grab (Southeast Asia) – Didi and Softbank (combined $2B investment)
• Ola (India) -Tencent and Softbank (combined $1.1B investment). Didi (undisclosed amount invested)
• 99 (Brazil) – Didi ($100M investment). Softbank ($100M investment)
Cable Company Regional Monopolies
• Cable companies explicitly don’t compete head on in
each other’s territory.
• American cable companies essentially make deals to
grant each other regional monopolies and extract as
much profit as possible from consumers.
• What is happening, and will continue to happen, in
ridesharing is very similar in nature to these regional
cable monopolies, but on a country by country scale.
3) PM
02/ THE BATTLE FOR THE NEXT BIL LION USERS
India’s Mobile Wallet is Chinese Owned.
• Ant Financial (AllPay) made the initial strategic investment in February 2015 by buying 25% of Paytm for $S00M.
• Ant Financial and parent company Alibaba, have gradually
upped the ir stakes and now own a combined 62% of Paytm.
• Paytm has established a dominant position – in 2016,
transact ions from the ir 218M users exceeded combined usage
of credit and debit cards in Ind ia.
o Remember the slide about fo llowing Alipay’s footsteps?
01 / LEAPFROGGING THE POST-WWII CONSUMER ECONOMY
In the past, adoption of new paradigms always
happened first in high end markets. But today,
building for emerging markets doesn’t
necessarily mean primitive functionality for
unsophisticated users anymore; in fact, the
opposite is often true. Paytm, India’s leading
fintech company, is another example.
01 / LEAPFROGGING THE POST-WWII CONSUMER ECONOMY
“We’re competing with cash, in India, we’re not competing with cards.”
-Madhur Deora
01 / LEAPFROGGING THE POST-WWII CONSUMER ECONOMY
| “A big break came late last year when
India canceled 86% of currency in circulation in an effort to cut corruption and bring more people into the tax net by forcing them to use less cash. ” |
 |
01 / LEAPFROGGING THE POST-WWII CONSUMER ECONOMY
This would be unfathomable in the West.
And unsurprisingly, when 86% of the cash
got cancelled and nobody had a credit card,
mobile wallets in India exploded, laying the
groundwork for a far more advanced
payments ecosystem in India than the US.
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01 / LEAPFROGGING THE POST-WWII CONSUMER ECONOMY
Paytm is following Alipay’s footsteps
• China’s Alipay is far more than just a payments app. It is one of
the world’s largest financial institutions.
o Its savings feature “Yu’e Bao” is now the world’s largest
money market fund . with $765.6B under management.
o They issue hundreds of billions of dollars of loans online.
o It is a gateway to Alibaba e-commerce properties.
• Paytm may not be a direct competitor building a search
engine, but all of these use cases are user journeys that never
touch Google.
PaYtm
Why are Chinese tech giants now pushing to expand abroad?
1. They are reaching saturation of the Chinese domestic market and need to seek growth elsewhere.
2. There is huge systemic regulatory risk of operating only in China, everyone wants to diversify (Tencent, Didi and Bytedance are the canonical examples)
3. There is cutthroat competition in China unlike anywhere else in the world. (e.g. Tencent cutting off all links to Alibaba and Bytedance properties within WeChat)
Bytedance ‘s Regulatory Heat in China
• Bytedance: ran into issues with the Chinese government and their apps were pulled from Chinese app stores temporarily including their flagship Toutiao app. One of them (Duanzi) was even banned entirely.
• Tencent The Chinese government has frozen approval of new games due to
concerns about the societal impact. This has been incredibly disruptive for
Tencent — causing their first revenue drop in 10 years and a historic stock
price drop of $143B.
• Didi has faced major threats over their safety record.
• Takeaway: Success in the Chinese market is a fraught position . So the new
generation of Chinese tech companies looks outwards to greener pastures (NBU).
Bytedance CEO Zhang Yiming’s Zuck-esque apology ~~@R-1~oo-R~ on Toutiao.epic.org
.
Cutthroat Competition in China,
Cloudwalk – Al Surveillance Unicorns
• China’s surveillance boom has created an anchor customer for cloud machine vision services, birthing companies like Sense Time (>$4.5B}, Yitu ($2.4B}, Face++ ($2B}, Cloudwalk ($2B}.
o “When we talk about data resources, really the largest data source is the government.”
-Sense Time CEO Xu Liu (Source)
• Now that these companies are operating at scale they are building a host of other services (e.g. facial recognition for office buildings, augmented reality)
• They are also expanding into other countries, and verticals. Andrew Ng demonstrating facial
recognition for office building entry.
How should we look at the Chinese market?
• Takeaway: The hottest digital media fad since Snapchat originated in China, not the US.
• Obsolete Assumption: Only siloed unities and commodity hardware from China can successfully
internationalize because of the cultural context and market dynamics are so different. (e.g. data
saver apps like Clean Master)
o Just like we the market of teenagers as a harbinger for new trends, we should look at China.
• Takeaway: The main battlegrounds are not the domestic Chinese and US markets. Chinese players
will aggressively challenge Silicon Valley in NBU markets because they see t he same upside we do
as both sides saturate their home markets. Competing head to head with them is necessary in NBU
locales.
5) Softbank Vision Fund
Softbank -The Ultimate Strategic Investor
• Japanese tech conglomerate Softbank has raised the largest
tech invest ment fund ever – the $100 Billion (!!!l “Vision Fund”
o Investors include Apple, Qua lcomm and Saudi Arab ia.
o They plan to deploy all of this cap ital within 5 years.
• Softbank is both a strategic investor in Chinese giants like
Alibaba, and a co-investor with them in other companies.
o Softbank has also put $1.4B into Paytm.
• They own a w ide variety of assets worldw ide including ARM, Boston Dynamics, and a $4B stake in Nvidia .
02/T HE BATTLE FOR THE NEXT BIL LION USERS
Softbank’s strategic investments*
form the connective tissue for a
global federation of tech companies.
Competitive threats won’t always
look like other search engines.
The Vision Fund is fundamentally not a traditional fund; but instead a multi-hundred billion dollar experiment based on Masayoshi Son’s viewpoints on what corporate structure should look like in the information age.
“When we centralize to gain control, the centralization causes a bottleneck, and then we get big company disease.” -Masayoshi Son
6) Commodity Manufacturing
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
China is not competitive quite yet in the most high tech and high value forms of manufacturing. E.g. Semiconduct or Fabrication, Airplanes , OLEO Screens
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
But China dominates the production of commodit~ hardware. And commoditization is steadil y marching up the value chain. E.g. Plasti c Toys, Drywa ll, Glass, LCDs, PCs Smartphones , Solar Panels .
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
What is a Commodity?
• Commodity= minimally differentiated good or service such
that no seller can charge a large premium.
• Gross margins = ability to charge a premium
o If I’m buy ing a commodity, no one can charge a large
premium; I could j ust buy from another vendor the
same thing at a lower price.
• TSMC (Sem iconductor Fabricat ion) – 51% gross margin
• Yingl i (Solar Panels) – 10% gross margin
• The low cost producer wins when differentiation goes away.
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
“Making standard efficiency solar panels is about as hard as making drywall. It’s really easy. In fact, I’d say drywall is probably harder.”
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
Macro Trend
Electric powered, autonomous vehicle hardware will become commoditized.
| Supply Side Commoditization: Man ufac t u ring elect ric vehic les has a much lower barrier to entry than interna l com bust ion engine vehicles because EVs are an order of ma g nitude less mechan ica lly complex. |
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
But demand side commoditization caused by autonomy is even more significant.
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
Why autonomous?
“Globally, 7.2 million die each year in road accidents. 95% of the time, it’s human error. Right now, there are about 1 billion cars on the planet. 95% of the time, the~ sit idly, wasting capital and consuming valuable space in our
cities. We can do better:)” -John Krafcik
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
In an Autonomous World: Fleet Ownership > Individual Ownership
• A centralized ridesharing network is needed to coordinate cars to achieve near 100% utilization rates. (Ube r/Lyft/D idi/Ola/G rab etc.)
• Human driving world: Rides haring networks get cars from individuals because t hey need a human operator paired with each vehicle.
• Autonomous world: Fleet ownership (e.g. Avis or Hertz) makes mo resense because professional fleets are better at dealing with …
• Mass purchasing • Depreciation of capital expenditures
• Diversification of risk • Maintenance
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
Bad News for Incumbents:
Key differentiators will become irrelevant ….
• Brand becomes irrelevant because of ridesharing.
o You don’t care what car brand your Lyft is any more
than you care about flying in a Boeing or an Airbus .
• Driver experience beco m es irrelevant in a self driving pod
that is owned by a fleet.
o The Ultima t e Driving Machine ™ stops mattering.
• These two things are enormous ly d iff icu lt for new entrant s to
build. Significant barriers to entry are dissolving.
spacer
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
In many ways, the car market mirrors the traditional CPG market. Car makers spend enormous amounts on brand advertising to develop an affinity for their products in end users that make purchasing decisions.
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
But the future of vehicle hardware looks a lot more like the enterprise PC market, where the purchaser is no longer the primary user. Instead corporate decision makers buy minimally differentiated commodities in bulk based on ex~licitl~ s~ecified criteria.
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
A Textbook Example of Low End Disruption
“It is a story of rational managers facing the innovator’s dilemma:
Should we invest to protect the least profitable end of our
business. (cheap commodity cars) so that we can retain our
least loyal most price sensitive customers? (fleet buyers) or
should we invest to strengthen our position in the most
profitable tiers of our business (highly branded luxury
vehicles), wit h customers who reward us with premium prices
for better products? ” (The Ultimate Driving Machine 7M)
-Clayton Christensen, The Innovator ‘s Solut ion (2003 )
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
This is the bad news for Tesla – highly differentiated vehicles, built to signify status and deliver great driving experiences, will be disrupted by generic autonomous pods.
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
“[Companies] fail – not because the y made the w rong decisions , but because they make the right decisions for circumstances that are about to become history.” -Clayton Christensen
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
“The ruling Communist Party has the world’s most aggressive electric vehicle goals, both to clean up smog-shrouded cities and seeking the lead in an emerging industry.” -Seattle Time s
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
China’s Electric Vehicle Gameplan
• China already buys more elect ric cars then the rest of the
world combined.
• The plan is for domestic demand to accelerate Chinese
battery and EV makers towards economies of scale.
o A 25% tariff on imported cars makes it harder for
foreigners to get a piece of the act ion.
o At o ne point, EV product ion subsidies amounted to
nearly 60% of an elect ric vehicle’s price. (Source)
• Their ho pe is this freshly built commodity EV powerhouse
continues to fuel the export machine that underpins the
Chinese economy.
The easiest part to predict, 50% of the cost of an electr ic car is the battery.
Bloomberg Cl China will likely be the world’s largest batterY: Producer. for the foreseeable future.
Looks like lithium-ion batteries
are commodities also …
• And remember, due to perfect competit ion, in
commod ity markets, the low cost P-roduce r; wins
the day.
• “China’s approach [to batteries] has echoes of the
one it took on solar P-OWer a decade ago. It
dom inated the industry by lowering costs and
dr iving 1erices down by 70 Percent. ”
-Gordon Orr former Asia cha irman of McKinsey (Source)
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
“Since 2012 China has spent billions of renminbi subsiding its electric carmakers, turning Shenzhen-based BYD, in which Warren Buffett’s Berkshire Hathaway has a stake of about 10 per cent, into the world’s
largest electric car and bus maker.” -Financial Times
03/T HE WORLD’S DOM INANT ELECTRIC VEHICLE MANUFACTURER
BYD inked a deal with the state of Washington for uo to 800 electric buses
7) Comparative Advantage Framework – Case Studies
Ridesharing [China Leads Today]
1. Creation: Ridesharing happened first in the US.
2. Adoption: But due to a lack of mass car ownership (Lack of legacy systems)
and extreme urban density (Scale of consumer market) ridesharing volume
in China is 2x the rest of the world … combined.
3. Iteration: With this much penetration Didi has begun building tons of new
features on top of basic ridesharing, including a smart city platform.
Infrastructure [China Leads Today]
1. Creation: Modern infrastructure like highways, high speed rail and bridges were developed in the West.
2. Adoption: But China needed to build all of its infrastructure from the ground up in essentially a generation (photo of Shanghai in 1990 vs. 2010). They poured more concrete in 3 years than the US did in the entire 20th century because they lacked existing infrastructure (Lack of legacy systems) and there was a need to service the massive population (Scale of consumer market ). Which led to unprecedented government investment (Explicit government support ).
a. Shanghai’s population is on the order of 4 times the size of New York City based on mobile phone data (more people than the entirety of Canada). Urban infrastructure challenges of this scale simply don’t exist in the West.
3. Iteration: It turns out, after this historic construction boom China has become world class at building infrastructure.
a. An especially surreal example is this train station that was assembled in 9 hours by 1500 workers. Nideo)
b. China is now leveraging this expertise as a way to accumulate and exert geopolitical power by exporting infrastructure (i.e. One Belt One Road)
Autonomous Vehicles [Prediction]
1. Creation: Created at Google, and Waymo is unambiguously the leader.
2. Adoption: I fully expect China to achieve mass autonomous adoption before the US. Explicit government support will mean the clearing of regulatory barriers will happen easily, and perhaps cities will be re-architected around AVs (Explicit government support ). Crucially, the lack of mass car ownership leads to far more consumer receptiveness to AVs. (Lack of legacy systems)
3. Iteration: It’s very possible that earlier mass adoption leads to a virtuous cycle that allows Chinese core self-driving tech to accelerate beyond western counterparts.
State Datasets: Surveillance = Smart Cities
• Alibaba has been selected to the National Al Team for smart city applications. It turns out that
having streets carpeted with cameras is good infrastructure for smart cities as well.
o Close collaboration with the government allows Alibaba to gather information like car and
foot traffic data based on surveillance cameras.
o Government data mixed with Alibaba ‘s own data and expertise in computing is a potent
combination.
• Alibaba’s “City Brain” product is being used in pilot cities like their home city of Hangzhou to
optimize the timing of red lights for traffic flow and ambulances , and to redirect traffic if certain
areas are under construction.
• It’s purportedly reduced traffic time by 15.3% and cut ambulance arrival time by 50% in pilot areas.
• Soon, municipalities will be able to make every infrastructure decision, from filling potholes to
building subway lines, based on complete data of how every person is moving through the city in
Al for Medical Diagnosis [Prediction]
1. Creation: A new fie ld born from breakthroughs in the West.
2. Adoption: But again I would expect these systems to reach mass deployment in China first. There are far too few doctors for the population, increasing the incentive to seek alternative treatment (Lack of legacy systems) the government is explicitly supportive, naming Tencent to the National Al team to solve this problem (Explicit government support ) and they have the authority to quickly clear regulatory barriers while American initiatives are mired in HIPPA compliance and FDA approval.
3. Iteration: It’s possible that the flywheel cou ld start spinning. and China could lead the world in this sector as well. This could lead to them exporting their tech and setting international norms.
State Datasets: Biotech and Healthcare
• The potential impact of government supplied data is even more significant in biology and healthcare.
o In the near future, it wouldn’t be a surprise to see the Chinese government require every single citizen to have their DNA sequenced and stored in government databases , something nearly impossible to imagine in places as privacy conscious as the US and Europe.
• The Chinese apparatus is well-equipped to take advantage. Tencent has already been named to the
National Al Team for medical diagnosis using computer vision and a logical next step would be
medical advancements utilizing government DNA data.
Immigration
• The critical driving factor will be the extent to which China can overcome its deficit of top talent by
fostering talent domestically, convincing top overseas Chinese talent to come home, and attracting
international talent.
o Also, to what extent will the latent anti-immigrant cultural force in the US force us to throw this advantage away?
Neutral Factors
2 things that are discussed a lot but are not meaningful advantages on either side .
1. Capital: No longer a meaningful constraint on either side of the ecosystem.
2. Culture of innovation: both China (e.g. Confucian values, 4 ancient inventions, the Middle Kingdom etc.) and the US (e.g. Puritanical work ethic, nation born from rebellious spirit, etc.) confidently claim cultural exceptionalism in the social psychology of their societies that make them conducive to innovation. Both are fairly interesting, but it’s not clear to me that one culture is concretely more exceptional than the other, or that this framing providers compelling explanations for what is going on, or predictors for what will happen next.
8) AI / Surveillance / Government as an Anchor Customer
In the press and politics of America and Europe, Al is painted as something to be feared that is eroding privacy and stealing jobs. Conversely, China views it as both a tool for solving major macroeconomic challenges in order to sustain
their economic miracle, and an Opportunity to take technological leadership on the global stage.
Surveillance is one of the “first-and-best customers” for Al
• Mass surveillance is a killer application for deep learning.
• So an entire generation of Al unicorns is collecting the bulk of their early
revenue from government security contracts.
• Al companies Yitu ($2.4B) and Sense Time ($4.5B) advertise on their websites that police departments are using their facial recognition tech to assist in everything from catching traffic law violators to resolving murder cases.
• State-owned papers have reported that police are making convictions based
on phone calls monitored with iFlyTek’s voice-recognition technology.
Government investment and contracts allow Al projects to justify the initial fixed cost of development. Once they are at scale, the marginal economics of software make propagating to other use cases much more economically practical.
Facial recognition expands beyond surveillance
1. Creation: Breakthroughs in using machine learning for image
recognition initially occurred in the US.
2. Adoption: Surveillance use cases (Clearing of regulatory
barriers ) and enormous government stores of data (Explicit
government support ) on a huge population base (Scale of
consumer market ) have allowed China to leap ahead.
3. Iteration: Facial recognition is being deployed all across
China (e.g. at office buildings, making payments).
a. There is a very real possibility that the investment
surveillance has justified could allow China to leap
ahead in image recognition and biometrics.
National Al Team: Government partnership can be even more explicit
• China’s Ministry of Science and Technology is hand-picking companies to be a part of the National Al Team 
, and handing them key areas of focus:
1. Baidu: Autonomous Vehicles
2. Alibaba: Smart Cities
3. Tencent: Computer Vision for Medical Diagnosis
4. iFlyTek: Voice Recognition
• Tencent and Alibaba executives have proudly voiced public support for their
collaboration with the government around national security initiatives.
o Outwardly embracing this level of public private cooperation serves as a stark contrast to the controversy around Silicon Valley selling to the US government.
A lot of government data may have been gathered with surveillance as a motivation, but there are many applications that can be built on top now that the datasets exist.
State Datasets: Surveillance = Smart Cities
• Alibaba has been selected to the National Al Team for smart city applications. It turns out that
having streets carpeted with cameras is good infrastructure for smart cities as well.
o Close collaboration with the government allows Alibaba to gather information like car and
foot traffic data based on surveillance cameras.
o Government data mixed with Alibaba ‘s own data and expertise in computing is a potent
combination.
• Alibaba’s “City Brain” product is being used in pilot cities like their home city of Hangzhou to
optimize the timing of red lights for traffic flow and ambulances , and to redirect traffic if certain
areas are under construction.
• It’s purportedly reduced traffic time by 15.3% and cut ambulance arrival time by 50% in pilot areas.
• Soon, municipalities will be able to make every infrastructure decision, from filling potholes to
building subway lines, based on complete data of how every person is moving through the city in real time.
State Datasets: Biotech and Healthcare
• The potential impact of government supplied data is even more significant in biology and healthcare.
o In the near future, it wouldn’t be a surprise to see the Chinese government require every single citizen to have their DNA sequenced and stored in government databases, something nearly impossible to imagine in places as privacy conscious as the US and Europe.
• The Chinese apparatus is well-equipped to take advantage. Tencent has already been named to the
National Al Team for medical diagnosis using computer vision and a logical next step would be
medical advancements utilizing government DNA data.
Simultaneously, the Chinese government can take advantage of the pace of private industry while exerting control through their leverage as a customer,
direct ownership interest, and regulatory power.
China Exporting Al Globally
• China could end up writing much of the rulebook of international norms around the deployment of Al. especially for nations that are aligned ideologically with Beijing.
• Chinese Al is already crossing borders – Cloudwalk is helping to build a national facial database in
Zimbabwe , and Yitu has begun selling image recognition tech to the Malaysian police; Kuala Lumpur. Malaysia’s capital. is integrating with Alibaba ‘s City Brain product.
• Being the unambiguous world leader in Al would broaden China’s sphere of influence amongst an
international community that increasingly looks to the pragmatic authoritarianism of China and
Singapore as an alternative to Western liberal democracy.
o The global balance of power is shifting – as the US tilts increasingly isolationist. and Pax
Americana potentially gasps its last breaths . an opportunistic China dreams of filling the void.
Too soon to say what will happen: Most cutting-edge research
and development is still happening in the West for both algorithms
and semiconductors; and history is littered with well-funded,
centrally planned initiatives that have failed spectacularly.
The big question: Could unique conditions around Al, such as
data collection and privacy regulation, distinguish this initiative
from the wide assortment of failed Chinese mega-projects?
9) Bytedance
TikTok goes global
• TikTok is a short video app from Chinese. 1B users
o Takeaway: The hottest digital media fad since Snapchat originated in China, not the US.
• Controversies have also coincided with huge global traction for Chinese media apps. lo.
the Play Store …
o 2017: 2 of the top 10 apps in India are Chinese, 18 of the top 100.
o 2018, 5 of the top 10 apps in India are Chinese, 44 of the top 100
o Many of these are media apps that are not well known in the West (i.e. TikTok, NewsDog,
Vigo Video , LiveMe)
Moederation
• Bytedance moderation issues … These moderation issues are not limited to China.
o Major controversy in Q2 2018 led to the Chinese government temporarily banning
their apps for showing content deemed harmful to society.
o In the US journalists have found a plethora of hate speech on TikTok. Radicalization
of youth is a clear concern.
o Bytedance ‘s Helo app in India (Toutiao-like newsfeed) is being lampooned for being a
breeding ground for sensationalist inflammatory content.
o Indonesian authorities temporarily banned Chinese video app Tik Tok for containing
“pornography, inappropriate content and blasphemy “. (SCMP) (Tech in Asia)
The Future of Global Media Distribution
• Prediction: within the next 5 years, there will be international scandals in the media space
similar to what is happening with Facebook (e.g. 2016 Election , Myanmar with the Rohingya
Muslims) but instead of occurring on Western platforms some issues will also occur on
Chinese platforms, with a company based in China bearing responsibility and making
decisions.
• What decisions will they make? Who will make them? To what extent will the Chinese
government be involved? And how will the response differ from what western platforms would
do? In the near future , these are the questions we will be asking for the first time.
They refer to themselves as an “Al first content platform.”
• Core competence of Bytedance = applied machine learning for the content lifecycle (creation, moderation, dissemination, consumption).
• With 3000 engineers and data scientists, Toutiao is one of the largest applied machine learning projects in the world.
o They’re aiming to hire >200 more Al engineers.
o See also: Toutiao Al Lab Website, a Bloomberg article about Bytedance’s $1M -$3M pay for Al engineers.
• Toutiao’s feed is living proof that algorithms can drive massive usage without human curation or much of a social graph .
The Recommendations Engine is their Core
• Onboarding is seamless and the app jumps straight into
content with no need to register an account, follow users, or tell Toutiao what topics you are interested in.
• Retention threshold= 100 headlines. If a user sees 100
headlines they are likely to retain long term. This is similar to Facebook’s famous “10 friends” rule.
• Virtuous Cycle: More usage -> more data -> better recommendations -> more engaging feeds -> more usage.
• Toutiao claims to be able to learn a user’s preferences after just 24 hours of use. The recommendations engine is built on a de~ understanding of users, content and context.
But Toutiao is afflicted by many of the same issues as Facebook’s Newsfeed. Serving users what they want leads to rabbit holes and echo chambers. In a study, 14% of users claimed to receive more than 50% of content from the same category. Additionally, engagement over everything is a slippery slope to trashy clickbait.
So in a major philosophical reversal, Bytedance has hired over 4000 human moderators with future plans to have a staff of over 10,000 on their moderation team.
10) Legacy Systems
01 / UNHINDERED BY LEGACY SYSTEMS
01 / UNHINDERED BY LEGACY SYSTEMS
“In America, e-commerce is dessert. In China, it is the main course.”
-Jack Ma, Founder of Alibaba
01 / LEAPFROGGING THE POST-WWII CONSUMER ECONOMY
China’s Consumer Economy is Unhindered by Past Prosperity
• “China’s e-commerce market is now bigger than
those of the U.S., U.K., Japan, Germa ny, France and
South Korea combined, according to consultancy
McKinsey.” -WSJ
o And 71% of Chinese e-commerce is on mobile
vs. 19% of US e-commerce.
• Digita l Media> TV- social media influencers run
5 out of the top 10 female clothing brands on
China’s largest e-commerce plat fo rm .
o These influ enc ers are the Chinese eq u iva lent of
Youtubers and lnstagra m model
01 / LEAPFROGGING THE POST-WWII CONSUMER ECONOMY
Leapfrogging in emerging markets is not driven by individual brilliance. Instead it ‘s the natural consequence of structural conditions that exist within certain markets.
01 / UNHINDERED BY LEGACY SYSTEMS
And when no one has a credit card to pay for all of this …
11) Semiconductor Independence
ZTE: The Cautionary Tale of Semiconductor Import Dependency
• ZTE is one of the largest telecommunications equipment makers in the world. Consequently they’re key to China’s One Belt One Road initiatives to export infrastructure and grow China’s geopolitical power.
• ZTE depends on chips from American companies to manufacture their products. So in the heat of the trade war, when the Commerce Department banned US companies from selling to ZTE, they were forced to shut down their operations.
• The ban was eventually lifted, but the situation underscored China’s dependence on foreign chips.
o Historical Corollary: Members of the Organization of Arab Petroleum Exporting Countries
proclaimed an oil embargo on the US causing a crisis in October 1973. After the 1973 oil crisis,
the United States Department of Energy and Synthetic Fuels Corporation was created to address the problem of fuel import dependency.
China’s intentions to steal semiconductor tech to address this concern is no secret
Semiconductors and Reunification with Taiwan
• Reunification with Taiwan is a non-negotiable issue for China. Deng
Xiaoping proclaimed that China could wait 100 years to reunify.
• Taiwan is the 3rd biggest semiconductor maker in the world. The desire
to lessen dependency on foreign rivals like the US and South Korea.
could provide pressure for China to reunify with Taiwan sooner.
• A modern corollary is infrastructure One Belt One Road which aims to
build eastwards. But needs to go through Xinjiang. home to a minority
group that wants to secede from China.
• One Belt One Road provides more pressure to crack down in Xinjiang.
TPUs: An Obvious Target for IP Transfer
• ”As a result, in order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet, its longtime Chinese partner.” -AWS Spokesperson
o To be clear this is not IP transfer (yet) AWS still has owns and controls all of their tech, but they have taken the first stepn’s approach, we down what could be a slippery slope.• If we take Amazo need to situation plan for the possibility where we are asked to give TPU technology to a local partner company.
• Regardless of if this materializes, the perception risk in policy circles is guaranteed — In March 2017, 50 US lawmakers wrote a letter to China’s Ambassador to the US expressing concern about Chinese regulations around forced collaboration with rivals and technology transfer in cloud computing.