Another week, another DeepSeek, and another insane valuation for OpenAI
by Inside China Business [12-1-2025].
(RAD: The main difference between Chinese & American business models is that essentially everything in China is "open source", whereas it is "proprietary" in America, yet the Chinese are still profitable & often pull ahead in many sectors at a much lower cost. The Chinese government has built industrial parks where everyone communicates & borrows the best ideas. — RAD)
AI models from Chinese labs are comparable in performance to the top systems from Silicon Valley.
But Chinese models are open-source, and are developed in a fraction of the cost and time.
They are also preferred by business users, which presents a serious problem for the valuations of firms like OpenAI, which owns ChatGPT. OpenAI's most recent funding round valued the company at over $500 billion, which is also what is needed to develop the Stargate project. By contrast, the latest offering from Moonshot, the #2-ranked model, comes from a company valued at just $3 billion.
The investment thesis for the Magnificent 7 relies on users paying premium prices for access to proprietary systems. But even technicians working on Silicon Valley itself increasingly use Chinese models like Alibaba's Qwen and DeepSeek, which are more up-to-date and affordable.
Closing scene, Huaxiacheng Park, Weihai
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