Image Credit: NightCafe Studio: Link Image Credit: NightCafe Studio: Link Link Why the US LLMs Are Showing Poor Returns For Investment Compared to China The bottleneck is real: the problem is the lack of data! The bottleneck is real: the problem is the lack of data! The bottleneck is real: the problem is the lack of data! GPT 3.5 to GPT-4-Turbo was a quantum leap. GPT-4.5: hugely enormous computing resources (as evidenced by the massive prices) but not a serious entry in the competition. Grok 3: 200,000 GPUs in the world’s largest AI cluster - but no quantum leap. largest AI cluster Incremental improvements. Why? Why? Get ready to see why Big Tech may have shot itself in the leg with GPU compute and Trumped itself with tariffs! Get ready to see why Big Tech may have shot itself in the leg with GPU compute and Trumped itself with tariffs! Get ready to see why Big Tech may have shot itself in the leg with GPU compute and Trumped itself with tariffs! And why China is not just the winner - they are racing ahead on all fronts. And why China is not just the winner - they are racing ahead on all fronts. And why China is not just the winner - they are racing ahead on all fronts. The Model Is Only As Good As the Data You Give It! It was never about the compute - beyond a certain point. Once the entire Internet - copyright, non-copyright, intellectual property, free use, had been consumed: There was nothing more for the models to learn from. Synthetic data is nowhere near as good as the human-generated data of the Internet. Throwing more compute and scale at the problem - and you will have AGI - is false propaganda for more chips. Throwing more compute and scale at the problem - and you will have AGI - is false propaganda for more chips. false propaganda for more chips Yes, GPU compute is necessary. But algorithms Trump compute. (pun intended) But algorithms Trump compute. (pun intended) The proof? GPT 4.5 and DeepSeek R1. GPT 4.5 and DeepSeek R1. Astronomical Prices, Abysmal Performance Improvement GPT 4.5 has a price (famously astronomical) for its API of $75/1M input tokens and $150/1M output tokens. a price (famously astronomical DeepSeek, which is competitive with GPT 4.5 on nearly every benchmark (the exception being emotional intelligence) is free for use for chat. free for use for chat. Its API cost is an average of 82x times cheaper. 82x times cheaper And open-source to boot! And open-source to boot! Yes, perhaps GPT 4.5 is a precursor for GPT-5 - But that still does not justify the astronomical price tag. That’s not pricing: that’s a sinkhole for the money in your wallet, especially in third-world countries. That’s not pricing: that’s a sinkhole for the money in your wallet, especially in third-world countries. That’s not pricing: that’s a sinkhole for the money in your wallet, especially in third-world countries. Yes, DeepSeek has been overloaded by requests in the past, but less so now. And with the free price? I’m willing to wait for cutting-edge performance! This is the Leaderboard on LM Arena as of the date of writing this article: Leaderboard on LM Arena With its pricing, GPT 4.5 should be heads and shoulders above the rest. With its pricing, GPT 4.5 should be heads and shoulders above the rest. Instead, an MIT-licensed model (open-source and free for commercial use) is less than 30 points below it on LMSYS Arena. open-source and free for commercial use And why are Google’s LLMs leading the pack? IMHO: The large amount of data Google has within its worldwide juggernaut enterprise (7 models in the top 20, more than any other company) is the main reason for its dominance! The large amount of data Google has within its worldwide juggernaut enterprise (7 models in the top 20, more than any other company) is the main reason for its dominance! The large amount of data Google has within its worldwide juggernaut enterprise (7 models in the top 20, more than any other company) is the main reason for its dominance! Meanwhile, in China: China has done what OpenAI set out to do. China has done what OpenAI set out to do. China has done what OpenAI set out to do. Create LLMs moving towards AGI and make it free and open for the entire world. The Chinese government has poured billions into AI research and funding for private companies and cutting-edge research in universities. has poured billions into AI research China was neck-and-neck with the US as far as research is concerned - in 2024. in 2024 in 2024 And now that Trump has cut funding for US research and imposed tariffs that could destroy any chance the US has in the AI race - cut funding for US research tariffs that could destroy any chance the US has in the AI race China is poised to take the pole position in the AI and LLM world domination. China is poised to take the pole position in the AI and LLM world domination. China is poised to take the pole position in the AI and LLM world domination. I’m eagerly waiting for DeepSeek’s R2 (as is the rest of the world, some more in fear). China has been blocked access to expensive GPU chips, but that may have been the best thing to happen to the Chinese AI effort! China has been blocked access to expensive GPU chips, but that may have been the best thing to happen to the Chinese AI effort! China has been blocked access to expensive GPU chips, but that may have been the best thing to happen to the Chinese AI effort! Forced to innovate, China came up with some fantastic algorithmic and efficiency innovations. Forced to innovate, China came up with some fantastic algorithmic and efficiency innovations. Forced to innovate, China came up with some fantastic algorithmic and efficiency innovations. That resulted in the exact opposite of what the ban was supposed to accomplish. That resulted in the exact opposite of what the ban was supposed to accomplish. exact opposite of what the ban was supposed to accomplish China became the world leader in AI efficiency and economy for LLMs with DeepSeek R1. China became the world leader in AI efficiency and economy for LLMs with DeepSeek R1. China became the world leader in AI efficiency and economy for LLMs with DeepSeek R1. Algorithms Are the Key, Not Compute Compute matters only as long as high-quality data is available and for meeting the high demand for existing LLM products. Compute matters only as long as high-quality data is available and for meeting the high demand for existing LLM products. Compute matters only as long as high-quality data is available and for meeting the high demand for existing LLM products. For creating genuine AGI, nearly all AI experts concur that better algorithms are the key. Reinforcement Learning is perhaps the most promising candidate in this area. Reinforcement Learning However, the most recent studies and projections for AI are mind blowing. Some ‘independent’ researchers came up with a prediction for AI in 2027. It's a fascinating read! https://ai-2027.com/research?embedable=true https://ai-2027.com/research?embedable=true They actually project AGI with autonomous agents arriving by 2026-2027! They actually project AGI with autonomous agents arriving by 2026-2027! They actually project AGI with autonomous agents arriving by 2026-2027! I agree with them (except on the compute factor). I agree with them (except on the compute factor). Naval Ravikant is both right and wrong about AGI (in his interview). (in his interview) (I realize going against Naval Ravikant may be problematic, the guy is a freakin’ legend.) (I realize going against Naval Ravikant may be problematic, the guy is a freakin’ legend.) He is right about more compute not producing AGI. I agree with him there. But wrong about the emergence of ASI and AGI. But wrong about the emergence of ASI and AGI. AGI will self-evolve from existing autonomous AI Agents. AGI will self-evolve from existing autonomous AI Agents. AGI will self-evolve from existing autonomous AI Agents. Human beings will not build AGI.
AI will.Similarly, humans will not create ASI.An AI that has reached AGI will. Human beings will not build AGI. Human beings will not build AGI. AI will. AI will. Similarly, humans will not create ASI. Similarly, humans will not create ASI. An AI that has reached AGI will. An AI that has reached AGI will. If ASI and AGI were left to humans, then maybe 100 years is a realistic expectation. With all due respect to Naval Ravikant (again, the guy is a huge, huge legend! Legend!): With all due respect to Naval Ravikant (again, the guy is a huge, huge legend! Legend!): AI will build itself and evolve into AGI and ASI in ways that human beings will not even understand, given enough foundation and autonomy! AI will build itself and evolve into AGI and ASI in ways that human beings will not even understand, given enough foundation and autonomy! AI will build itself and evolve into AGI and ASI in ways that human beings will not even understand, given enough foundation and autonomy! And now, with the recent actions of the Supreme POTUS: China is well-positioned to be the country to reach AGI (and thus ASI) first. China is well-positioned to be the country to reach AGI (and thus ASI) first. ChatGPT-inspired Trump Tariffs and the defunding of all education grants will cost the US the AI race. ChatGPT-inspired Trump Tariffs and the defunding of all education grants will cost the US the AI race. ChatGPT-inspired Trump Tariffs and the defunding of all education grants will cost the US the AI race. ChatGPT-inspired Trump Tariffs defunding of all education grants That is my certain prediction. That is my certain prediction. Conclusion The US Big Tech companies were sold on the idea of more AI chips, more intelligence by a combination of interwoven advertising and hype. Now, they are paying the price. Tariffs on every country that were created with a formula from ChatGPT do not help either. a formula from ChatGPT do not help either Defunding research and development in multiple sectors in the US is a disaster on all fronts. research and development in multiple sectors in the US We all know who is responsible for all this, so I will avoid naming names. But algorithms are the key to evolving AGI. But algorithms are the key to evolving AGI. And funding is required to police whatever AI results from the natural evolution of AI agents. the natural evolution of AI agents. Sadly, if things continue in this direction, China is set to become the world’s dominant superpower. Sadly, if things continue in this direction, China is set to become the world’s dominant superpower. Sadly, if things continue in this direction, China is set to become the world’s dominant superpower. The reason I say that is that AI will enable breakthroughs in multiple sectors of technology that we have never seen before. Breakthroughs that were not even imaginable by human beings. Breakthroughs that were not even imaginable by human beings. The AI race is the Manhattan Project of the 21st century. The AI race is the Manhattan Project of the 21st century. The AI race is the Manhattan Project of the 21st century. And in this current scenario - China is the certain winner. And in this current scenario - China is the certain winner. And in this current scenario - China is the certain winner. While I do not monetize my writing directly, your support helps me continue creating articles like this one without a paywall or a paid subscription.If you want articles like this one appearing on your business and your keywords for your platforms online, you can get them (NOT on HackerNoon, but yes on other platforms)!Contact me at:<https://linkedin.com/in/thomascherickal ](https://linkedin.com/in/thomascherickal)For your article! (Prices are negotiable, and I offer country-wise parity pricing.)If you want to support my writing, consider a contribution at Patreon on this link:https://patreon.com/c/thomascherickal/membershipAlternatively, you could buy me a coffee on this link:https://ko-fi.com/thomascherickalCheers! While I do not monetize my writing directly, your support helps me continue creating articles like this one without a paywall or a paid subscription.If you want articles like this one appearing on your business and your keywords for your platforms online, you can get them (NOT on HackerNoon, but yes on other platforms)!Contact me at:<https://linkedin.com/in/thomascherickal ](https://linkedin.com/in/thomascherickal)For your article! (Prices are negotiable, and I offer country-wise parity pricing.)If you want to support my writing, consider a contribution at Patreon on this link:https://patreon.com/c/thomascherickal/membershipAlternatively, you could buy me a coffee on this link:https://ko-fi.com/thomascherickalCheers! https://patreon.com/c/thomascherickal/membership https://ko-fi.com/thomascherickal All Images are AI-generated by the wonderful users of NightCafe Studio, on this link: https://creator.nightcafe.studio/ All Images are AI-generated by the wonderful users of NightCafe Studio, on this link: https://creator.nightcafe.studio/ All Images are AI-generated by the wonderful users of NightCafe Studio, on this link: https://creator.nightcafe.studio/ https://creator.nightcafe.studio No AI was used in this article except for the images. No AI was used in this article except for the images. No AI was used in this article except for the images. All links are in the article itself, so there is no list of references this time around. All links are in the article itself, so there is no list of references this time around. All links are in the article itself, so there is no list of references this time around.

This story contains new, firsthand information uncovered by the writer.

The is an opinion piece based on the author’s POV and does not necessarily reflect the views of HackerNoon.

The writer is smart, but don't just like, take their word for it. #DoYourOwnResearch before making any investment decisions or decisions regarding your health or security. (Do not regard any of this content as professional investment advice, or health advice)

Code Red: Why China Is Well Positioned to Win the AI Race

About Author

Comments

TOPICS

THIS ARTICLE WAS FEATURED IN

Related Stories

10 LeetCode Patterns to Solve 1000 LeetCode Problems

Generative AI Clash: OpenAI’s Emotional AI vs. Google’s Enhanced Search

WEF President Advocates for a Supervisory Algorithm to Guide AI for the Greater Good

How the USA Could Beat China in the AI Race (Hint: It Doesn't)

The Next Race Isn’t for Bigger Models, But Dependable Systems

Google Rolls Out Gemini Enterprise for Business Clients

10 LeetCode Patterns to Solve 1000 LeetCode Problems

Generative AI Clash: OpenAI’s Emotional AI vs. Google’s Enhanced Search

WEF President Advocates for a Supervisory Algorithm to Guide AI for the Greater Good

How the USA Could Beat China in the AI Race (Hint: It Doesn't)

The Next Race Isn’t for Bigger Models, But Dependable Systems

Google Rolls Out Gemini Enterprise for Business Clients

Light-Mode

Classic

Newspaper

Minty

Dark-Mode

Neon Noir

Minty

HN StartUps