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The Chinese government pivoted to supporting its private sector again because it realized this was necessary to compete with the US in AI.
Following a government policy shift, Jack Ma has returned to a leadership role at Alibaba, and the company's stock has doubled this year.
By some metrics, Chinese large language models have reached virtual convergence with US models.
Tech investment as a share of US GDP is currently above 5%, a level comparable to the peak of the dot-com bubble in 2000.
The US economy has become a singular, high-stakes bet on Artificial Intelligence, as there is significant weakness in other economic sectors.
Approximately 40% of US economic growth this year has been driven by capital expenditure (CapEx) spending on AI.
Approximately 80% of the gains in the US stock market this year have been powered by AI-related stocks.
Americans currently hold approximately 52% of their financial wealth in equities, a higher concentration than during the 2000 dot-com bubble.
Major tech companies including Meta, Amazon, and Microsoft have recently become the biggest issuers of debt to finance the AI development "arms race."
The current AI investment cycle has seen the fastest buildup in history, with AI and tech CapEx going from contributing virtually nothing to 40% of US GDP growth in just two years.
An estimated 60% of current US economic growth is being driven by AI through a combination of direct CapEx and the wealth effect from AI-driven stock market gains.
China is achieving near-parity in LLM performance with the US while spending approximately $100 billion on AI CapEx, compared to nearly $500 billion in the US.