The Chinese are cleaning our clock in AI.

0:00 Speaker 1 Sunday morning, a lot of crisises in the world. Well, the financial markets took a tumble. They went up, they went down, especially because of AI, especially because the Chinese started a rumor that they’re going to be better than AI in America. Gordon Chang is with us an expert in the Far East. Gordon Chang and your Twitter at

0:30 Gordon g Chang. You’re on in twenty four to seven. Tell us the truth. What is your expectation of what the Chinese are doing? And have they affected the markets in the United States on purpose or an accident or it was almost a trillion.

0:48 Speaker 2 Dollars Yes, and it was no accident job. On January twenty, Deep Seek, a nominally private Chinese company, released its R one model of artificial intelligence, and it tanked the Nastak and especially Navidia, the maker of AI chips. Now deep seeks AI is.

1:13 Speaker 1 Tanked.

1:15 Speaker 2 Yes, almost eighteen percent of Nvidia’s value disappeared in the matter of hours. Now there’s been a little bit of comeback bounce back on this, but the point is that the US took a big hit when people started thinking about deep Seek. Now deep Seek is open AI, as I mentioned, which means we can look at it and

1:41 we can see that it is better ai than, for instance, the stuff offered by open ai chat GPT. But we’ve also learned in the last few days that deep seek is a sense of deep fake because it was distilled from chat gpt. In other words, deep Sea used open AI’s model to teach its model. In other words, they

2:10 have a large language model distilling another large language model teaching it. So this is a violation of open AI’s terms of service. This is intellectual property theft, and it makes China’s accomplishment much less impressive than it first appeared.

2:28 Speaker 1 In addition, that something may come out that then not as good, or that that there’s information going back on every transaction that you use the Chinese chips on back to China. I mean, you never know what it comes down to. Whom do you trust.

2:52 Speaker 2 Well, we certainly shouldn’t trust the Chinese Commonist Party because deep seek released its model on the day that President Trump was inaugurated, and it also coincides with the publicity blitz propaganda blitz from the Communist Party about the futility of American sanctions. China really wants the US to lift sanctions, and I think that it used the release of the

3:16 deep sea to help make its case. Now deep seek there are three main threats. One of them is it grabs a lot of information, more information than TikTok. Second of all, it propagates the Communist Party’s narratives, so if you look at its artificial intelligence, it gives you Communist Party propaganda twenty four to seven. And Third of all,

3:39 as we just discussed, it injured US companies. So this is something which we need to have the same approach that we had on TikTok, which is the ban.

3:49 Speaker 1 It understood that created such a crisis in the market. To it was just mind boggling and it wasn’t necessary. Meanwhile, it looks like oil is going in the right direction because that’s the direction that President Trump is pushing it at what is going on in the Red Sea Suez Canal.

4:17 In your opinion, as far as has President Trump taken command of the United States Navy and the Armed forces because they can wipe out the Hoodies in three days if they wanted to.

4:33 Speaker 2 Yes, And President Trump has signaled that he has a very different attitude on Iran than President Biden, because Biden supported Iran over our traditional allies in the Middle East, the Gulf Arab States, and so I think we’re going to see a reorientation there where we start supporting our friends like Bahrain, like Saudi Arabia, and we’re going to

4:56 go after our enemies such as Iran. This will be a very good thing because the Huthis terrorist proxy of Iran have basically closed off the Red Sea and the Suez Canal. Shipping is down about seventy percent. Shipping companies are adding two weeks and somewhere between eleven and twelve thousand nautical miles for their trips between Asia and Europe.

5:17 This is really disrupted shipping around the world, and it is shown that these large and long supply chains are not as secure and resilient as they appeared three or four years ago.

5:30 Speaker 1 Anything new on the Panama Canal.

5:34 Speaker 2 Well. Secretary of State Rubio yesterday or on Thursday talked to Megan Kelly on our Serious XM show and he said, what President Trump’s comments on Greenland and the Panama Canal are not a joke that the Chinese could He had zero doubt that the Chinese could close down the Panama Canal and a whim by using their companies that are

5:59 in the canal, and Rubio is going to Panama as one of the Five nations on his first foreign trip as Secretary of State, So we’re going to see a lot more about this because clearly Panama has allowed the Chinese to dominate the zone and to get the ability to close it down in the time of war.

6:21 Speaker 1 Grudon Chang, thank you for coming on this Sunday morning, and thank you for the up update. And anybody wants to stay in touch with Gordon Chang, it’s is Twitter at Gordon g Chang, available twenty four to seven. Thank you so much, Gordon.

6:38 Speaker 2 Well, thank you so much, John. I really appreciate it.