Differentiated Understanding

Grace Shao

Every episode, I bring in a guest with a unique point of view on a critical matter, phenomenon, or business trend—someone who can help us see things differently. aiproem.substack.com

  1. Assembled co-founder John Wang on building a AI native support system for enterprises

    2D AGO

    Assembled co-founder John Wang on building a AI native support system for enterprises

    In this episode, I sit down with John Wang, the co-founder of Assembled, to explore how AI is revolutionizing customer support. Having transitioned from a Stripe engineer to an AI startup founder, John shares his unique insights into the evolution of support tools. We delve into how these tools have shifted from being mere cost centers to becoming strategic assets that enhance customer experiences. John and I discuss the impact of AI on support volumes and staffing, highlighting how integration is reshaping the landscape. He emphasizes the importance of talent density and assembling high-caliber teams to drive success in the tech industry. Through his experiences, John provides practical insights into AI's current capabilities and limitations in support operations. We also explore the strategic considerations for future AI support ecosystems. John shares his thoughts on the role of support in driving revenue and customer satisfaction, and how AI can orchestrate with human support agents to create a seamless experience. His perspective on building high-performing support organizations offers valuable lessons for anyone looking to innovate in this space. Chapters 00:00 The Journey from Stripe to Assembled 02:25 Understanding the Importance of Customer Support 05:29 Lessons Learned from Stripe 10:25 AI in Customer Support: Current State and Future 16:04 The Economic Impact of Support Operations 18:25 The Role of AI in Transforming Support Jobs 24:30 The Future of Support Organizations 26:58 Guardrails Against Fraud in AI Support 32:42 Navigating the AI Ecosystem 38:00 The Value of Long-Term Commitment in Careers AI-generated transcript Grace Shao (00:00) Hey, John, thank you so much for joining us. I just recorded your bio already. It’s extremely impressive. And you’ve done quite a, you’ve had quite a few different roles now as the co-founder of assembled, right? To start, can you just tell us about your story? Like what inspired you to leave Stripe, you know, go into, you know, right now what you guys are doing, which is a software for people who run customer service support operations. You know, now you guys are pivoting into AI as well, or at least leaning into AI. Tell us about all of this. John Wang (00:28) Yeah, great question. When we, well, when my co-founders and I started, we were all at Stripe. We worked on a bunch of different things at Stripe. And one of the last things that my two other co-founders worked on was a support tool, an internal support tool. And I remember pretty clearly that they were making a bunch of headway. It was really, really cool. And... They had gone to this really, really high up person and product. And this person was basically like, why are you guys wasting your time on this? Like you guys are kind of like, you’ve been at Stripe for so long, you know all these things and you’re doing support. Like I’ve got this really cool Bitcoin project that I would love for you to work on instead. And I remember my co-founder coming to me and being like, hey, like pretty bummed this is what happened. And then I was like, wait, you just saved Stripe, you know, quite a few million dollars, increased customer satisfaction by 40%. And still they don’t understand the value of this. And that’s when we were like, hey, ⁓ there’s something here where there’s a market opportunity. So that’s what got us really, really excited about support. We were doing it at Stripe. We knew it was an undervalued place. We didn’t see any very good tools out there to do support well. And so we decided to go build something really, really great in the support space and just like make transform and elevate support is our mission. Yeah. Grace Shao (01:50) Do you think it was just that stripe was too rich? They were just, and they just didn’t care about saving a couple million dollars? Or do you think it was actually a blind spot for people? John Wang (01:59) I think Stripe was definitely very rich at the time. think it was also a blind, it was a combination, right? Because most people, you think of support, you think of it as just a cost center. And I think recently that started to change in the sense that like, hey, this is actually a really important part of your business. But for a lot of companies, like if you look at FinTech, if you look at like a lot of health tech companies, their entire product is their relationship with their customers. And so support’s actually really, really important for that. And I think a lot of people underappreciated that for quite a while. And now I think people are starting to understand again, hey, if you piss off your customers every time they come and talk to you, that’s not going to be a very good thing. You better be a monopoly. Otherwise, you know, they might not be coming back. Grace Shao (02:46) Yeah, definitely. I think I want to kind of lean into that later in our conversation as well. It’s like people are trying to replace support and customer service AI first. But if anything, it’s not the best experience when you’re frustrated with a product and you keep on getting a robot, right? But I want to kind of talk more about your experience at Stripe. You were there quite early. What do you think it taught you, you know, as a very early employee at such a successful startup now? if even considered still startup and then like what were things that you think you learned there lessons even if soft skills that you kind of took away to to your current role like as a founder. John Wang (03:21) Yeah, it’s a great question. You know, it’s really funny actually. I just met up with someone where, so when I was starting out of college, I had applied for all these jobs. I was able to get a lot of them, except for this one company that I really, really wanted to go to. It was called Meteor Development Group. They built open source software. In college, I had built open source software at Ruby on Rails. I was really big in that community. was like, wow, it’d be awesome to go and make this something I do day to day. And I didn’t get the job. I was really bummed about it. And then I was like, I’ll just fall back on my second here, which is Stripe. And Stripe was the obvious second choice because just the people were really, good. And now like 10 years later, I like think about that and I’m like, the business model is really important. because Meteor was not a good business. Like open source frameworks is not a good business, but Stripe, really boring. Honestly, it’s just like payments. You process payments, you go talk to Visa. You literally have to like, we had a server in the server room that would send like a specific file with specific tabs and spaces in order to get it out to Visa. Really boring. Really, really core infrastructure too. And so like the big overarching thing that I learned was like one, business model is unbelievably important because if you can just make a good product when the kind of like market is there and when there’s a really big need, then this can scale like unbelievably fast. Two was the people. I remember talking actually to a few people, Greg Brockman was maybe the second or third person I talked to. who’s now the co-founder of OpenAI. And I remember just talking to him and being like, wow, this person is so, so smart. This is awesome. And I would talk to kind of like, I would go to the lunchroom and be talking to people at Stripe. that was just, people were talking about all sorts of things. And I think like talent density was a really, really big part of like what made Stripe successful. And It wasn’t any one thing over time. was one, Stripe was in a great market. And then two, it iterated really, really fast on a lot of little things over and over and over again. So I thought that was a really good place to learn a lot about like what makes a company great. Grace Shao (05:49) Yeah, I think it’s interesting you’re talking about talent density and a lot of the AI labs I speak to actually also talk about that. But I’m curious, what does it mean when you have really strong talent? Is it like that they are technologically superior, like they can code better? Or does it mean actually that they can think outside the box, they’re more creative, they can pivot faster? Like what does it really mean to have really high caliber talent on your team? John Wang (06:11) I think it depends on what company or like what you’re trying to solve, right? Like talent density for Los Alamos national, like Los Alamos, like building the atomic bomb is like very different than talent density for like Bell Labs, which is very different than talent density at early Stripe, which is very different also than talent density at OpenAI Research. Like I think for Stripe in particular, the type of talent density that was there was really high curiosity. Grace Shao (06:31) Right. John Wang (06:38) really high product thinking, really technical people, and people that could dive deep on certain problems and weren’t afraid to go talk to a bunch of customers. You saw so many conversations about like, how do we make this particular API parameter better for everyone? And like hours and hours and hours of like making sure it was a really, really good product. And people who weren’t afraid to like, you know, take a week of work and just like dump it away because it wasn’t quite there. So it was like, This combination of like, they worked really hard, they’re really smart, and they care a lot about the end result and have a high quality bar. That was Stripe’s version of kind of like talent density. But I think like, you know, if you look at the labs, if you look at different research institutions, maybe it’s just, you know, I don’t know, the raw ability. Yeah. But. Grace Shao (07:26) research capabilities or whatnot, right? No, that makes a lot of sense. Yeah, I wanted to ask you earlier on in our conversation, you said

    43 min
  2. Matt Sheehan on China’s AI Policies: Employment, Anxiety, Safety, and State Priorities

    APR 27

    Matt Sheehan on China’s AI Policies: Employment, Anxiety, Safety, and State Priorities

    Today, I’m joined by Matt Sheehan who writes this insightful newsletter. Matt is a senior fellow in the Asia Program at the Carnegie Endowment for International Peace. He researches China’s AI ecosystem, Chinese tech policy, and how technology shapes the country’s political economy. Matt lived and worked in China from 2010 to 2016 and later led China tech research at the Paulson Institute’s MacroPolo. He’s the author of The Transpacific Experiment. He speaks Mandarin, and he turns complex policy into plain English. In this episode, he helps us understand China’s AI governance, about how Beijing is thinking through the social and political consequences of rapid AI adoption. We focus especially on a shift that became more visible in early 2025: rising concern inside China’s policy community about AI’s impact on jobs, worker anxiety, and social stability. Matt explains why China’s AI labor question is different from the Western debate. We also discuss how the Chinese government is trying to balance support for technological progress with the need to manage public anxiety, clarify labor rules, and avoid social instability as AI becomes more deeply embedded in the economy. He broke down the myths, explained the jargon, and the regulatory bodies in China. Our conversation started slow, but it became very, very heavy, what they call 干货满满 substance heavy. Also, a shoutout to Nathan Lambert’s work in helping us better understand the open-source ecosystem and Rui Ma’s for helping us understand investing in China AI! Every episode, I bring in a guest with a unique point of view on a critical matter, phenomenon, or business trend—someone who can help us see things differently. Season two will host a series of guests from early-stage investing, as well as builders, founders, and product managers. For more information on the podcast series, see here. To find the previous episodes of Differentiated Understanding, see here. Chapters 00:00 Introduction to AI Policy in China 03:10 Matt Sheehan’s Journey into Chinese Tech Policy 05:55 Shifting Perspectives on AI and Labor 09:02 Public Concerns Over Job Security and Government Responses 15:09 Education and AI: Preparing for the Future 17:50 Regulatory Landscape of AI in China 34:00 Navigating China’s AI Regulatory Landscape 40:58 Misconceptions About Chinese AI and Government Funding 43:57 Understanding AI Safety and Security in China 52:03 Global AI Governance: Cooperation or Parallel Paths? AI-generated transcript Grace Shao (00:01) Hi Matt, thank you so much for joining us today. I’m so, so happy to finally have you on the pod for people who are listening. We’ve been trying to make this happen for like six months, but between us, there are like three little children running around with a bunch of viruses and have just not been able to make this happen. I’m really excited. ⁓ A few months ago, what really caught my attention about your work again is that you shared something on WeChat saying you were dissecting the new Chinese AI safety paper, like the big national one. ⁓like verbatim in Chinese. And I was like, wow, this is extremely impressive. It’s not an easy task. I commend you for doing that. So I really wanted you to help us understand the nuances of the AI policy world, especially how people are perceiving AI in China. I think there’s more more interest in how China’s governing AI ⁓ while we were hearing the backdrop of how the Chinese government is trying to push on AI diffusion, right? And then on top of all of this, like where areas where China’s AI governance seem to be leading, because in many ways it seems like China’s AI regulators are much faster to respond to how fast technology is evolving. But to start, we would love to hear about your personal story. Tell us about how you ended up studying China, studying Chinese tech policy. We met in Beijing years ago, maybe a decade ago. ⁓ Yeah, so tell us about that. Matt Sheehan (01:11) Sure. Yeah. Yeah, sure. Sort of stumbled into China stuff. I hadn’t taken Chinese or really knew anything about China until about halfway through college when I ended up getting a summer job in Beijing. I was just kind of like instantly fascinated and knew I wanted to move back there after I graduated. So took a little bit of Chinese my senior year, moved to Xi’an, taught English, kind of followed what at the time was a very like typical know, trajectory of like, go there, teach English and then go study Chinese at university and then get a job and get a slightly better job. And eventually I was able to kind of wiggle my way into journalism. And so I was a China correspondent for a publication called The World Post at the time. And that took me up. was there from 2010 to 2016. So kind of like the hinge period before and after she came to power. Pretty interesting thing to see. And When I moved back to California in 2016, I started working on a book about China-California ties. I’m from California and this was like the period of kind of explosion in cross-border investment and Chinese students come into California in the Silicon Valley-China relationship getting even more like twisted and complicated. China-Hollywood. So I wrote a book about that and as I was doing it, the kind of the tech section, the China-Silicon Valley, China-U.S. tech connections kept growing bigger and bigger and I ended up working a little bit with Kai-Fu Lee on his book, AI Superpowers, which was kind of my turn from like, it was like all things China, China, California, China, Silicon Valley, China AI. And since 2017, I’ve been working almost exclusively on AI issues in China. Maybe the first three years of that, like 2017 to 2020, was very focused on comparative capabilities. This was kind of a period right after the National AI Plan in China when there’s a big explosion in activity. And I think... This is kind of was like the first time America kind of got freaked out about Chinese AI capabilities. And so I spent a few years being like, okay, let’s try to like ground these assessments in some data. Let’s get like an actual grounded sense of where the countries are with each other. ⁓ And then starting in 2021, I sort of turned into focusing on Chinese AI governance, Chinese AI regulations. That’s when they first started rolling out their regulations or recommendation algorithms and sort of deep fakes. And I was kind of making a bet that I think If China continues to be at or near the frontier of AI, then how they choose to regulate it domestically is going to have huge implications for China’s own ecosystem. And then it’s going to really ripple out internationally on safety, security, growth, all this stuff. So I spent the last, now it’s like five years, ⁓ just deep in the weeds of Chinese AI policy and regulation. Grace Shao (04:04) Oh, great. I think I definitely want to double click on all the algorithm security and the kind of, you coined the answer versus what’s called security and versus what’s the other Chinese word? Yes, yes. Matt Sheehan (04:17) Anshun safety security. ⁓ Jeff Ding was talking about this very early on, but yeah, it’s a, it’s a constant thing that we have to negotiate for people who don’t know it’s the word Chinese, the Chinese word Anshun ⁓ means both safety and security. whenever you’re kind of translating documents on this front, you have to know, you talking about AI safety, which is kind of a different thing versus AI security, right. I think both you and Jeff definitely are some of the more nuanced scholars I follow. And I do want to kind of double click on that later on. But to start, I think I want to talk about something that’s top of mind for a lot of people. You just wrote a piece that you said was not super serious. It was just your scattered thinking put together on subset. I thought it was very well written about the growing anxiety around potential job losses. ⁓ your perspective is that you know there are more and more people voicing this kind of concern and I wanted to hear a perspective on that and I kind of wanted to share a bit of my different share my different perspective on this and what I’m hearing on the ground and kind of have a conversation around that as well. Yeah why don’t you start with sharing like what you found yeah Matt Sheehan (05:22) Yeah, sounds great. Yeah. So, I’m not an AI and labor person. That’s not been my focus for a long time, but I’ve been monitoring it for a long time and just lightly. And starting around, I guess it was early 2025, I just started to hear a lot more out of the Chinese policy community about worries about AI’s impact on labor and jobs. And this was kind of a surprise to me because ⁓ just a little bit prior to this, say early 2024, I had, I sometimes ⁓ in my job, I run these kind of like informal surveys or almost like a, what do call it, focus group of American and Chinese AI policy people and asking them like, you how would you rank these different risks? How concerned are you about ⁓ job risks versus privacy versus military AI? And we have both sides that like rank the risks and then talk about the results. And when I ran one of these in early 2024, it was very striking that the Chinese side I think it was at the time we had seven different risks and the Chinese side ranked labor impacts a second to last as six out of seven. And so my sort of baseline was like, OK, for a variety of reasons, this isn’t really too on the radar of China’s ⁓ policy community or wider policy community. And then starting around early 2025, some of those same people who I had been talking to about this before had really changed their thinking. They were saying that there was a big change in thinking within China, maybe especially within China’s of policy and government circles, but then I think also a little bit wider. And so that sort of sparked my curiosity. An

    1h 1m
  3. Tencent's QClaw goes global, aims to serve the average consumer user, with PM Shuyu Zhang

    APR 21

    Tencent's QClaw goes global, aims to serve the average consumer user, with PM Shuyu Zhang

    Amid Anthropic’s success with coding products, many AI labs and companies have also tried to lean into that vertical. OpenAI has stepped back from courting consumers and shut down its video model division, Sora. Alibaba, meanwhile, has more recently begun releasing closed-weight proprietary models and is reportedly pushing the Qwen team to find clearer paths to monetization. The Chinese tech giant has also launched Qoder, a Cursor-like product under the Alibaba umbrella, which we interviewed last year. But despite all this, Tencent remains notably committed to the mass consumer market. The OpenClaw frenzy has already led to five different Clawbot-style products emerging across its ecosystem. Joining me today is Shuyu Zhang, Senior Product Manager of QClaw, to break down the thinking behind that frenzy, from the cultural logic to the business rationale to the product design choices shaping it all. QClaw is to be accessible to everyone on April 21. It is the first consumer-grade AI agent built on OpenClaw. No technical setup, scan a QR Code, and the agent will be live in 3 minutes. Product link: qclawsg.qq.com Waist list: https://docs.google.com/forms/d/e/1FAIpQLSeIfEzlOV8jq_tGMbV5mqTSALyufE0kZ933XqE3Fnha1_CRfA/viewform?usp=publish-editor (Founding Claw — limited 20,000 slots) Every episode, I bring in a guest with a unique point of view on a critical matter, phenomenon, or business trend—someone who can help us see things differently. Season two will host a series of guests from early-stage investing, as well as builders, founders, and product managers. For more information on the podcast series, see here. To find the previous episodes of Differentiated Understanding, see here. Chapters 00:00 Introduction to OpenClaw Frenzy in China 02:30 Shuyu Zhang’s Journey and Insights on AI Accessibility 05:27 Cultural and Societal Factors Driving AI Adoption in China 07:48 Understanding OpenClaw’s Popularity and Usage 10:36 Exploring Tencent’s AI Product Ecosystem 13:33 QClaw’s Integration and User Experience 15:45 The Philosophy Behind QClaw’s Design 18:14 Raising the Claw: The Concept of Personal AI 22:48 Incremental Value in AI Products 23:33 User Experience as a Priority 27:55 Understanding User Needs and Safety Concerns 33:07 Business Model and Global Expansion Transcript (AI-generated) Grace Shao (00:00) Thank you so much for joining us today, Shuyu. I’m so excited to have you on the first day. I understand it’s such a pleasure to have you here. I’m really excited for today’s topic because it’s something that’s kind of been at the top of mind for a lot of people. Why was there a massive open call frenzy in China? Why did it take off? The thinking behind it all. How did WeChat go about opening up to this whole new era of agentic AI within WeChat development? And there’s no better person to talk about this topic than you. So first of all, for the audience, please start with telling us about yourself, your role. How did you end up here? Shuyu Zhang (00:35) OK. Hi, everyone. I’m Shuyu, product lead of Qclaw. Also, the architect behind it’s overnight growth story in China. I achieved breakout success with zero marketing spend. I got a master’s degree of finance from Washington University in San Luis, then worked for Alibaba Group as head of AI product in Sanyo for four years. We mostly crafted AI product for business there. Almost everything we did was about AI for work. But one day, I decided to do something different. I want to get more exposed to consumer side. to experiment with the chemistry of AI for common people. Tencent is famous for its consumer side products I want to work with and learn from consumer product experts here. So I came here last September. Yeah. Grace Shao (01:15) Really cool. And I think one thing that really kind of resonated with me is when we’re talking about AI agents right now, how a lot of times, you know, the products still don’t feel that intuitive for non-technical people. And you yourself joked and said, you know, look, you’re like a social science and liberal arts student. You’re not a technical person yourself, but you’re able to lead the product design for this. And your mission is really to make QClaw more accessible to non-technical people. Tell us about that and the thinking behind it all. Shuyu Zhang (01:43) Okay, okay. Actually, the story starts when I was working for Alibaba. Initially, we worked for the engineers to help them improve their working efficiency with AI. But later I found out that this group is overly served. They only account for like 1 % of all of the people, but Every day there are lot of products designed exactly for them. And I think this is still the major theme of AI revolution since 2023, where people think the way to AGI lies. But these groups also are easily unsatisfied. They raise a lot of questions about the services that the AI provided, and at the same time, they’re afraid to be replaced. So I think the vibe is strange. So when I’m moving to a new environment to Shenzhen, when I was hanging around, I found a lot of interesting common people are using AI. And they’re getting a lot of happiness and convenience, even though the product capabilities for them are not the most advanced and designated for their needs. They’re still satisfied. There are two interesting stories. The first story is when I was getting home on the plane during spring festival, I met a 12 year old girl. This girl looks smart. She was playing with some toys. And after that, she was playing with a chatbot during waiting for the plane to take off. I was shocked. Because in the past, when I am younger, we usually play games during while we’re waiting for the plane to take off. But the youngest generations are playing with chatbots. This is interesting. And she’s using it to either cut the photos and even make phone calls with the chatbot. And when I talked to her, he also told me that when their friends are hanging out, the 12 years old girls are hanging out. They’re playing with the chatbot too. And I was really shocked by that story. And the second story is during the early January, Yang Liping was doing opera in Shenzhen. And I went there too. And a 50 year old lady sitting next to me, I cleared at her phone screen. The phone storage was actually out of use. But she didn’t delete the chat box applications in her phone as well. She only reserved WeChat, TikTok and the chat box applications in her phone, even though it’s already full because she might not use the very advanced phones. Yeah. And then I found out that for common people, the requirements or the needs for AI exists as well. And problems widespread for the problems, not widespread, for the problems widespread, but not complicated. But the supplies for them are far from enough. And I know there are a lot of people are chasing higher and stronger AI, but the gap between the bottom and the ceilings, 90 % of the people are between them. I want to make a product that can feel and satisfy these people’s needs. Yeah, that’s my story. Grace Shao (04:30) That’s really interesting. think it really ties into a theme that we’ve been writing a lot about AI-prone, which is also about how China is really embracing it as a full on mass market product versus I think in the West right now, AI is still really used by a select group of knowledge workers or certain kind of demographic. I do want to double click on that, which is what do you mean by the young girl is playing with AI? What was she doing actually? Was it interactive with their friends or were they trying to build products or what were they doing? Shuyu Zhang (05:00) Okay. The young girl, when she was playing with the chat bot applications, she actually sent a photo of her roughly taken, not in a very good light or in a very good background. And she just asked that, asked that application to curve it for me to make me look prettier or make me look funnier. She’s not actually a, because I asked, I also asked her a very interesting question. I asked, do you post TikTok shorts or Instagram? She said, I don’t because I don’t like to show enough my life to the public, but I just like to see my photos in the funny way. don’t even though I use AI to, you know, process my photos, I’m just enjoying it by myself. I don’t want to it to other people. And the happiness of the AI processing of the photos is already enough for her. And this is the first scenery she’s using. And the second scenery is that she actually stays at school all the time. She didn’t go home during the from Monday to Friday. So she told me when she missed her mother, because her mother worked in Shenzhen and is a working mother, her mother doesn’t have a lot of time to, you know, FaceTime with her or the teacher doesn’t allow that as well. Because when she go back to the dormitory, the roommates are silent. They can’t do that, but she can always talk to that chatbot. It’s like a companion. And that also makes me feel warm actually, but also little bit sad for her. And the third scenery for her is that she told me she would call the chatbot because the chatbot never blames her and the chatbot always holds her words because sometimes for I don’t know, for the young generations, a lot of their topics are hard to get for the friends, but She said, chatbot is always a good friend because the young generations, they don’t actually care about the or they don’t know about the appearance of people or the words behind the words. But the chatbot is always blunt and sincere and always happy to chat with. Yeah, this is the three scenarios she’s using it. Grace Shao (00:00) Following up on our previous conversation about why Chinese people seem to have a much more optimistic approach to AI and why did the open claw, why did open claw take off in China, like such like wildfire. Shuyu Zhang (00:15) Okay, so I think Chinese p

    45 min
  4. Sovereign AI, Open Source, and the Gulf’s Big Bet with Interconnected Kevin Xu

    JAN 14

    Sovereign AI, Open Source, and the Gulf’s Big Bet with Interconnected Kevin Xu

    Every panel on AI and geopolitics seems to default to the same cliché: “the US–China race.” In this episode of Differential Understanding, I wanted to sit with someone who has actually lived inside DC, Silicon Valley, and the US–China tech corridor, and ask whether that framing still makes sense. My guest is Kevin Xu, founder of Interconnected Capital – a global hedge fund focused on the picks and shovels of AI – and author of the Interconnected newsletter, which sits at the intersection of tech, business, and geopolitics. Kevin’s path runs from Obama campaign staffer and White House / Commerce Department comms to GitHub’s international expansion lead, and now to full-time investor–writer with a very explicit geopolitical lens. We start with why he insists on “thinking in public” as an investor, and why he believes ideas soulocking in a vault. From there, we dive into his critique of the “race” narrative and his alternative concept of US–China co-opetition – a messy mix of competition, cooperation, and outright co-opting of each other’s models and research. That leads naturally into China’s open-source AI ecosystem, the Manus–Meta deal, and what he would need to see before feeling comfortable owning the upcoming MiniMax and Zhipu IPOs in Hong Kong. In the second half, we zoom out to sovereign AI: why South Korea might be one of the few countries outside the US and China with a shot at true full-stack AI sovereignty; how to read OpenAI’s Stargate initiative as an explicit American export play; and why the Gulf – particularly the UAE – is emerging as an AI “swing vote”, combining abundant energy, sovereign wealth, and a 1.5 million-strong construction workforce into a potential global compute hub. We close with Kevin’s differentiated view on China: AI diffusion is far more visible there, but the economic impact is not necessarily greater, and Beijing may end up being the first government forced to confront AI’s social implications. In today’s world, there’s no shortage of information. Knowledge is abundant, perspectives are everywhere. But true insight doesn’t come from access alone—it comes from differentiated understanding. It’s the ability to piece together scattered signals, cut through the noise and clutter, and form a clear, original perspective on a situation, a trend, a business, or a person. That’s what makes understanding powerful. Every episode, I bring in a guest with a unique point of view on a critical matter, phenomenon, or business trend—someone who can help us see things differently. For more information on the podcast series, see here. Timestamps (chapters): * 00:57 – From DC to GitHub to Interconnected Capital * 02:39 – Why Kevin “thinks in public” and writes Interconnected * 04:44 – US–China AI is not a “race”: co-opetition explained * 09:27 – Open-source / open-weight AI as last bastion of global cooperation * 12:14 – Capital flows, decoupling and why “capital finds a way” * 15:36 – Manus x Meta: product quality, viral growth, rationality in AI * 19:40 – MiniMax & Zhipu IPOs: revenue reality vs AI lab hype * 24:39 – Can Chinese labs win the Global South with cheaper AI? * 27:09 – Sovereign AI 101 and why South Korea looks uniquely powerful * 32:03 – Stargate as de-facto US sovereign AI and export strategy * 34:44 – Kevin’s trip to UAE: Gulf AI strategies and the “swing vote” thesis * 40:06 – Sovereign funds, MGX, and attracting talent from Hong Kong & beyond * 44:18 – Non-consensus bet: UAE Stargate as a global compute hub * 46:57 – Differentiated views on China AI diffusion and economic impact * 51:29 – Embodied AI, “aunties pressing elevator buttons” and social risk * 55:01 – Robotaxis, delivery drivers, and why China may go slower than expected AI-generated transcript Grace Shao (00:00)Hey everyone, welcome back to another episode of Differential Understanding. This is your host, Grace Shao And joining me today is Kevin Xu Kevin Xu is the founder of Interconnected Capital, a global hedge fund focused on the picks and shovels of AI. He writes the Interconnected newsletter on SubSac, which covers tech, business, and geopolitics. His insights have been frequently cited by the New York Times, Bloomberg, Economist, CNBC Information, Financial Times, Wall Street Journal, among many other media outlets. He previously worked as a senior executive at GitHub, the world’s largest developer platform, and served in the White House and Commerce Department during the Obama administration. He studied international relations at Brown University and law and computer science at Stanford. Grace Shao (00:40) Hey Kevin, thank you so much for joining us today. I already introduced you, but for listeners who may not know you that well, can you introduce yourself, the different hats you wear today, running Interconnected Capital, writing Interconnected Newsletter, and operating at the intersection of US, Asia, tech, geopolitics, and investing. Kevin Xu (00:57) Yeah, first of all, thank you for having me. So as you mentioned, what I do currently during the day is I write the interconnected newsletter on the intersections of geopolitics, technology, and business. I also run my own long only fund called Interconnected Capital, focused on the picks and shovels of AI, both hardware and software. Prior to that, I actually work as an operator inside multiple Silicon Valley tech startups. The most recent one is GitHub, which is the Microsoft-owned developer platform. I was their lead for international expansion strategy. That was my most recent real job, if you will. I also spent a bunch of time at different startups of varying sizes. And before that, actually started my career in politics. So I joined the first Obama administration’s campaign back in 2008. I was a campaign staffer. That was my first job out of college and then moved with the campaign team to DC, ⁓ worked in a few different roles. in the Commerce Department as well as the White House doing mostly press and communications work. So that is ⁓ my sort of all over the place background that led me to what I’m doing today, which is investing and writing ⁓ in technology, but with a very heavy geopolitical lens to the process. Grace Shao (02:13) I think that’s really interesting and explains to why you have a geopolitical lens, given that you actually have a DC background, right? But you run a fund and you actually keep most of your thinking, public, So instead of just keeping it mostly all private, which is what most investors do, why do you publish a very opinionated, very insightful sub stack and, share it very, I think generously with the public? What kind of conversation gap are you trying to fill when you start the interconnected newsletter? Kevin Xu (02:39) I think there are two elements to that. First is that this is more of my Silicon Valley ethos, which is that no idea is that worth keeping in secret. It’s all about the execution. Like I’m not, I didn’t come from a Wall Street finance background, right? Where a proprietary trading algorithm or some secret information you got from a meeting is this big trade secret that you want to lock into a vault inside Goldman Sachs or whatever. And that’s going to make you billions of dollars. That is not my approach to investing. I think thinking in public, sharing in public, and really getting the feedback that I get from writing is much more valuable than keeping all these thoughts in my head as if they’re the next best thing since sliced bread. When you actually write it down, when you put it out into the internet, half of them are good, half of them are actually crap. And I use writing and writing in public specifically basically as a canvas for me to think better, to hold my thoughts more clearly. I think knowing how to think is the most important skill for any investor to be able to succeed for the long term. And if any idea that I shared out there benefits somebody else, and you made some money off of it for free, so be it. Good for you that you actually understood some of the value from the writing, even perhaps more than I did as the writer. But for me, that’s not something that I keep very possessively as a trade secret. Grace Shao (04:00) I really relate to that and I think exactly to your point you’re like writing everything down is the way of thinking through your thoughts sometimes it’s all jumbled up in there and then also people ask me why do you keep AI Pro all free? I was like well if it really benefits you you know I don’t really mind I’m not trying to make money off of like selling you know just my content but really the content is my thinking and to your point sometimes I put in so much work and then the result and feedback is so bad and then some things I just kind of like throw out there And then it actually really sticks with people you never know. It’s really good to get the feedback from the public as well. Well, I think now I want to ask you about your journey into investing and really covering China and US. So you are based in the US, but you are Chinese. birth, right? ⁓ So does that play into why you cover China-U.S. related work right now? And I do want to talk about your recent article, which you said you think calling the China-U.S. relationship in tech and AI a race is quite lazy. You said instead of seeing it as pure competition, you think it’s more of a competition. So cooperation plus competition. Do walk us through that and how you kind of came out with this frame. Kevin Xu (04:44) Correct. So just to put a finer print on it, as far as the personal history is concerned, I was born in China. I moved to Canada when I was little, similar to you, think, Grace. And I moved to US later on. So obviously, I work in the US government. So I’m a US citizen. So I’m actually a card-carrying Canadian as well as an American rig

    59 min
  5. EVs taking on AI OS and the Delivery War. The Chinese Tech Winners Beyond BAT with Alan Zhang

    JAN 6

    EVs taking on AI OS and the Delivery War. The Chinese Tech Winners Beyond BAT with Alan Zhang

    In this episode, I sit down with Alan Zhang (Principal & Portfolio Manager at Ox Capital Management) to map China’s tech landscape through an investor’s lens. We break down how Alibaba, Tencent, and ByteDance are approaching AI, and why the “AI OS” is the real endgame. Finally, we analyze what’s changing in China’s consumer internet, EV ecosystem, and embodied AI pipeline. We also unpack China’s delivery wars (Alibaba vs Meituan vs JD), why quick commerce is structurally different from traditional e-commerce, and how markets price geopolitical risk into China tech valuations. Alan Zhang is a Principal and Portfolio Manager at Ox Capital Management, a boutique investment firm focused on emerging market equities that he co-founded in 2021. At OxCap, Alan leads investments across Asia; previously, he spent years as an investment analyst on the Asia team at Platinum Asset Management. He studied Actuarial Science and Commerce at the University of New South Wales, and he’s even taught advanced econometrics. So if you like the intersection of fundamentals, market structure, and Asia platform businesses, well then, this one’s for you. In today’s world, there’s no shortage of information. Knowledge is abundant, perspectives are everywhere. But true insight doesn’t come from access alone—it comes from differentiated understanding. It’s the ability to piece together scattered signals, cut through the noise and clutter, and form a clear, original perspective on a situation, a trend, a business, or a person. That’s what makes understanding powerful. Every episode, I bring in a guest with a unique point of view on a critical matter, phenomenon, or business trend—someone who can help us see things differently. For more information on the podcast series, see here. Chapters 01:34 Alan’s background: quant → Asia equities 03:11 US vs China AI: frontier vs “two-legged” approach 05:25 “Uninvestable” China and what changed 07:31 Beyond BAT: Xiaomi, Meituan, Mindray, MicroPort 09:24 BAT AI strategies and the AI OS thesis 13:45 Tencent: tools, data, distribution, and model strategy 16:33 AI-native phones: ByteDance × ZTE and what’s next 26:51 China EV landscape: BYD, Huawei, Xiaomi, Zeekr 31:28 Why phone OEMs can compete in EVs 34:16 Embodied AI: robotics parts, redundancy, and Unitree 39:38 Valuation + geopolitics: why Asia tech trades discounted 41:53 China delivery wars: subsidies, quick commerce, Meituan’s edge 50:27 12–18 month predictions + what investors miss (healthcare) AI-Generated Transcript Grace Shao (00:00)In today’s world, there’s no shortage of information. Knowledge is abundant. Perspectives are everywhere. But true insight doesn’t come from access alone. It comes from differentiated understanding — the ability to piece together scattered signals, cut through the noise and clutter, and form a clear, original perspective on a situation, a trend, a business, or a person. That’s what makes understanding powerful. Every episode, I bring in a guest with a unique point of view on a critical matter, phenomenon, or business trend — someone who can help us see things differently. So today, joining me is Alan Zhang. And I’m Grace Shao. Alan, really excited to have you. I’m excited about today’s conversation because we’re going to get into the investor’s perspective on Asia tech and emerging markets — with a proper markets-and-math backbone. Alan Zhang is Principal and Portfolio Manager at Ox Capital Management, a boutique investment firm focused on emerging market equities that he co-founded in 2021. At OxCap, Alan leads investments across Asia. Before that, he spent years as an investment analyst on the Asia team at Platinum Asset Management. He studied actuarial science and commerce at the University of New South Wales, and he’s even taught advanced econometrics. So if you like the intersection of fundamentals, market structure, and Asia platform businesses, this episode is for you. Alan, welcome. Alan Zhang (01:31)Thank you, Grace. Pleasure to be here. Grace Shao (01:34)Alan, to start, why don’t you tell us about yourself — your background — and what it is that you cover now? Alan Zhang (01:40)I grew up partly in Hong Kong, mainland China — Shenzhen particularly — and in Australia. I spent close to a decade in Australia doing my schooling and education, and worked for a firm called Platinum Asset Management, then co-founded Ox Capital with Joseph Lai. I studied actuarial science, so I’ve had a lot of experience manipulating numbers, cleaning up data — and that helped me tremendously in public equities. Nowadays there’s no shortage of financial data, and the ability to understand them — and the intent behind them — is crucial to investing. Grace Shao (02:34)Yeah, yeah. Alan Zhang (02:46)At Ox Capital, we also built a tool called the Mode Model, which distills more than a million financial data points from various sources to help us understand our coverage region a lot more. In terms of my coverage, I build quant models, I look at equities, and I also help with portfolio positioning based on macroeconomics in Asia. Grace Shao (03:11)That’s interesting because you started off in quant, but now you’re looking at equities — the fundamentals, right? You’re covering a lot of ADRs, and a lot of China’s big tech. Let’s talk about that. What is the China big tech internet ecosystem looking like right now? How does it compare to the US? Alan Zhang (03:20)In the US, they are focusing more on frontier models, while Chinese companies are taking more of a two-legged approach — tackling AI with different approaches. The US has invested a lot of resources into advancing frontier models. On one hand, we see successful cases like Gemini, Anthropic, and OpenAI, while we also see a lot of AI subscriptions cutting their prices by more than 90% in the last few years. If you remember in 2023 and 2024, many subscriptions were priced at a few hundred — some over $1,000 a month — based on investment assumptions. Now they’re cutting prices to sub-$100 a month. Some may never make their money back based on those assumptions, but it’s not being discussed today because the benefit of AI far outweighs that blip, and large-cap companies are investing enough to offset the impact. If we look at China, they haven’t gone through this episode — and I don’t think they will. Anyone who looks at Asia understands Asian users will never assume people will pay over $1,000 a month for subscriptions. China is working on frontier models, applications, and infrastructure at the same time. In summary, China is still the runner-up, but they’re developing AI in a more balanced manner. And it’s also good to see the US pivoting — in the recent 12 months, we’re seeing more US companies investing in software and applications rather than just frontier models. Grace Shao (05:25)China was deemed uninvestable, especially for Western investors. Your fund is based in Australia and Hong Kong, and your LPs are non-Chinese. For public investors who want exposure to China’s AI upside — what are they looking at? What are they thinking? Alan Zhang (05:46)Usually the big tech. China went through the property adjustment and the antitrust campaign in the internet space. It was painful — people called it uninvestable because they couldn’t see new growth drivers. And if they could, they were too insignificant compared to the two most important industries at the time: internet tech and property, which were both recalibrating. But things are different now because investors can see new growth drivers scaling up. In hindsight, these adjustments also helped innovation: talent that dreamed of landing a job at Meituan, Tencent, Alibaba went to smaller firms or startups; capital that made easy money in real estate went to new areas. Economic transformation is still a work in progress, and investing in China becomes more attractive if we see AI, consumption, and advanced manufacturing play a bigger role. We’re still in that phase. But we’re glad to see some companies bottoming out and making progress under the current setup. Grace Shao (07:19)In a pragmatic way, does that mean we’re looking at BAT? What companies should we be looking at for exposure to Chinese AI and economic transformation? Alan Zhang (07:31)Besides Alibaba and Tencent, people should look at relatively smaller cap — but still large-cap — companies like Xiaomi and Meituan. And also industries outside the internet. For example, Mindray in healthcare, or MicroPort in surgical robotics — they can implement AI into their products and make their portfolio more attractive. Grace Shao (07:41)When we chatted offline, you said a lot of companies are overlooked. Beyond BAT — what are some “1.5 tier” or “second-tier” companies that are huge by market cap but not well known in the West? Alan Zhang (08:09)People will naturally see them more over time. Tencent and Alibaba were making active efforts overseas; now as the market matures, more companies are going global. If I’m on a roadshow, people ask about Keeta, which is a subsidiary of Meituan. Xiaomi is opening more stores in Europe — even Africa and South America. People will naturally see them more. If you come to China and compare what’s here to where you live, you’ll see a clear difference. Grace Shao (09:24)Let’s double click on BAT — Alibaba, Tencent, and ByteDance. At a high level, how do you compare their AI strategies? Are they playing the same game, or different playbooks? Alan Zhang (09:52)Same, but different. They’re all investing heavily in frontier models and infrastructure. Ultimately, they all want to build the AI OS people will use. The DoorDash–OpenAI collaboration was a good example of what AI and a commerce company can do. Whether it’s an app within an app or an app within a phone — that’s st

    49 min
  6. 12/29/2025

    Z.ai/ Zhipu: one of the first major LLM start-ups to go public. Competition with giants and aims for AGI

    In this episode, I sit down with Zixuan Li, who leads the chat API and global partnerships at Z.ai, one of China’s leading LLM labs (one of the four tigers) and now one of the first to head toward an IPO. Z.ai started as THUDM, a Tsinghua data-mining lab best known in open-source circles for GLM and CogVideo, and has since grown into a model-as-a-service platform powering millions of devices and thousands of enterprises in China and beyond. We talk about what it actually means to be an “independent” lab in a market dominated by platform giants like Alibaba, ByteDance, and Tencent, why Z.ai pivoted from SOE-heavy infrastructure projects to a product-led GLM stack, and how they landed on a different business model, and the creation of the GLM Coding Plan, instead of charging by tokens. Zixuan is very candid about pricing (“If Anthropic charges $200, we charge 200 yuan”), the realities of on-prem-first China vs cloud-first West, and what it’s like to race against Minimax and Moonshot with fewer GPUs and less cash. We also zoom out and look at China’s AI talent pipeline (and the meme that the AI race is “Chinese in China vs Chinese in the US”), how he thinks about AGI as self-learning agents that live on your phone, why he’s comfortable being a white-label backbone in the Global South, and where he sees China’s AI landscape in the next 6–12 months. If you want a ground-level view of how a Tsinghua spinout is trying to survive, and maybe win, in the LLM wars, this one’s for you. Newly launched (Dec. 22) GLM 4.7: In today’s world, there’s no shortage of information. Knowledge is abundant, perspectives are everywhere. But true insight doesn’t come from access alone—it comes from differentiated understanding. It’s the ability to piece together scattered signals, cut through the noise and clutter, and form a clear, original perspective on a situation, a trend, a business, or a person. That’s what makes understanding powerful. Every episode, I bring in a guest with a unique point of view on a critical matter, phenomenon, or business trend—someone who can help us see things differently. For more information on the podcast series, see here. 01:20 – From THUDM to Z.ai: rebrand, Tsinghua roots, and model-as-a-service 03:30 – Quiet period & IPO: pride, pressure, and the business challenge of LLMs 06:33 – Pivoting from SOEs: infra projects, agentic models, and why strategy followed capability 07:25 – Competing with Minimax, Moonshot & DeepSeek: focus, compute, and capital constraints 08:34 – Chasing benchmarks vs real-world IQ: math, humanities, and alignment trade-offs 11:05 – On-prem vs cloud: why Chinese SOEs still won’t touch APIs 13:43 – Zero-retention and trust: can China’s culture around data ever shift? 14:07 – Inventing the GLM Coding Plan: subscriptions, stickiness, and “pay by value, not tokens” 16:00 – “If Anthropic charges $200, we charge 200 yuan”: pricing strategy and margins and GLM’s open-source flywheel 19:41 – Who really pays: sticky indie devs, big tech customers, and bargaining power 23:32 – GLM Coding Plan vs Cursor/Qwen/Claude: plans, agents, and avoiding lock-in 25:57 – Z.ai’s AGI ladder: AutoGLM, self-learning, and personalized weights 27:03 – Independent labs vs platforms in China: speed, resources, and “dirty work” 29:34 – Moonshot vs Z.ai: chasing the moon vs being “down to earth” 30:53 – Will China’s LLM market consolidate?: 5–10 players, Doubao, and video-generation winners 31:44 – Doubao phone & Honor partnership: bargaining power with OEMs 34:11 – Beyond China–US: Global South strategy and being a white-label backbone 35:29 – Being comfortable as infrastructure: letting others own the brand 38:05 – Who joins Z.ai and AI talent: thriving with scarce resources 40:07 – Culture, 007 hours, and survival: what it takes to be infrastructure 42:33 – Social welfare, AI safety, and cheap tools in India & Indonesia 44:38 – How China actually talks about AI safety (or doesn’t) 47:29 – Differentiated view: why Zixuan believes you should “enjoy lacking resources” AI-Generated Transcript Grace Shao:Hey Zixuan, thank you so much for joining us today. Really excited to have you on. Walk us through your journey and what led you to Z.ai to start off with. Zixuan Li:Yeah, so currently I’m the head of Zhipu AI’s chat API services and also head of global partnerships. I collaborate with LMSys Chatbot Arena, OpenRouter, Vercel, these large companies, and ship our products through their platforms. The reason why I joined Zhipu is it’s one of the leading AI labs in China and I can do overseas businesses, because I have a background at MIT’s Schwarzman College of Computing. So that brings my knowledge into real-world practice. Grace:I see. Was there any incentive for you to move back to China versus stay in the US? Zixuan:I think it’s more personal, because my wife’s based in China and she’s used to her work, so there’s no way she can move to the US. Grace:Fair enough. So let’s talk about the company’s mission and origins, because I think it does seem a bit mysterious, especially to people outside of China. From the outside, people know Zhipu, Z.ai as one of the leading Chinese LLMs. But that doesn’t really capture everything you guys do, right? In your recent prospectus, you describe yourself as a MaaS — model-as-a-service — company first. So tell us about that. Zixuan:Okay, so before Zhipu AI, we were called Zhipu or THUDM, because we named ourselves by the AI lab’s name. We originated from Tsinghua University’s data mining group — THUDM. But I think it’s hard to pronounce, and also “Zhipu” is also very hard to pronounce. So this year we bought the Z.ai domain and finally changed our name to Z.ai. When we were called THUDM, we were very famous inside the open-source community because we had a lot of repos, a lot of models under the THUDM name. And we open-sourced not only text models, also CogVideo, CogView, these models. I think they were sold at that time. But with the launch of VEO, Hailuo, and also a lot of current top models, we began to be more focused — basically more focused on text models, visual understanding, and so on. So I think that’s the origination of the lab. But as you said, there’s this terminology called model-as-a-service. From our side, when we compete with large companies like Alibaba and ByteDance, we need to be more focused. They have their inference level, they have their cloud services, but we don’t. So we try to let the model itself provide the service — like the API, or technologies like visual understanding — and try to use the model itself to be the selling point. Grace:I definitely want to double-click on how you position yourself compared to peers — a few of them you just mentioned, whether it’s Minimax and Moonshot, and then you also mentioned the BATs. But to start off with, you’re currently in your quiet period as your prospectus just hit the public. And if successful, you will become one of the first major LLM startups globally to be listed on a stock exchange. How does that feel? Zixuan:I think we are proud of it, but things are very challenging, because it’s really hard to do LLM inference. Both OpenAI and Anthropic have very high revenue, but a lot of loss on their income statements. So we have to figure out how to make money from large language models and also provide cheaper service to the customer. So I think it’s only a starting point for us. Grace:Definitely. I think right now only the big tech companies in many ways are essentially seeing ROI, and the model companies and the model labs themselves are really finding it hard to make a profit. I want to ask you about the branding. You did say you guys changed your company’s name to Z.ai this year, partially because Zhipu is just hard to pronounce. But was that also related to the fact that you guys seem to have made a pivot into really focusing on going global? Z.ai seems to be a lot more non-Chinese-native-speaker friendly, right? So is that the push right now? Zixuan:I think that played an important role, because we have observed the success of DeepSeek, Qwen — they got famous globally and Chinese people will think that they are the “SOTA” in the domain and their models are the best. They are recognized by NVIDIA and other large company CEOs. So I think that’s one factor. But the other factor is when we changed the name to Z.ai, the dot also plays an important role. We want people to enter that URL into their browser and try to visit our website. Yeah, two factors. Grace:And tell me about your origin story, actually. You mentioned earlier you started off from the Tsinghua data mining group. Maybe provide some context to people outside of China. What does Tsinghua represent? I mean, it’s an institution, it’s a university, but why are so many of these LLM companies or even deep tech companies coming out of Tsinghua right now? Zixuan:I think it’s kind of a combination of Stanford and MIT. So talents are everywhere and there’s a lot of funding from internally and also externally. And also people are chasing the highest IQ there. So it will be very natural to pursue AI in Tsinghua University. Grace:So I have a question on that, because a lot of tech companies, even the previous generation internet companies that came out of Tsinghua, had some kind of connection with Beijing city. And my understanding is Zhipu’s original business model was also very focused on SOEs and local government work, both in China and even across Southeast Asia. Before the more recent pivot leaning into tools and APIs, what were the reasons for the pivot from the heavy AI infrastructure focus and SOE projects to a much more product-led tools and API strategy? Zixuan:I think it depends on the capabilities of the model, because nowadays the model can pe

    51 min
  7. What the U.S. Misreads About China’s Tech Rise with Kyle Chan

    12/23/2025

    What the U.S. Misreads About China’s Tech Rise with Kyle Chan

    In this episode, I sit down with Kyle Chan (Brookings Institution) to unpack the thinking behind his provocative New York Times op-ed, “In the Future, China Will Be Dominant, the U.S. Will Be Irrelevant.” We start with the DeepSeek moment and why it surprised the West, why it didn’t surprise many China-watchers, and why Kyle sees it as only “the tip of the iceberg.” From there, we zoom out into the bigger story: China’s rise isn’t just one breakthrough model or one champion company. It’s a system of interlocking capabilities: EVs, batteries, renewables, industrial automation, robotics, and AI, advancing in parallel and reinforcing each other through spillovers, supply chains, and fast-moving “Swiss Army Knife companies” like Xiaomi and Huawei. We also dig into what people often get wrong about China’s state role: not pure top-down command, but a mix of industrial policy + private-sector experimentation, including practical mechanisms like compute vouchers and local-government support. Finally, we cover India’s trajectory, geopolitical constraints, and Kyle’s “hedges”—scenarios in which today’s narratives (in both China and the U.S.) could still break in unexpected directions. Relevant links: https://www.brookings.edu/people/kyle-chan/ In today’s world, there’s no shortage of information. Knowledge is abundant, perspectives are everywhere. But true insight doesn’t come from access alone—it comes from differentiated understanding. It’s the ability to piece together scattered signals, cut through the noise and clutter, and form a clear, original perspective on a situation, a trend, a business, or a person. That’s what makes understanding powerful. Every episode, I bring in a guest with a unique point of view on a critical matter, phenomenon, or business trend—someone who can help us see things differently. For more information on the podcast series, see here. 00:00 — The NYT op-ed + the DeepSeek catalyst: why Kyle wrote the piece, what he wanted to correct, and why DeepSeek was a wake-up call (“tip of the iceberg”). 06:53 — Kyle’s origin story: infrastructure obsession (high-speed rail) → the path into tech & industrial policy. 12:31 — China’s “electric tech stack” + spillovers: EVs, batteries, renewables, robotics, AI moving in parallel—and why “Swiss Army Knife” firms (Xiaomi/Huawei) can leap across categories. 19:12 — Why autonomy pairs with EVs: the technical and architectural reasons autonomous systems “almost always” sit on EV platforms. 24:01 — China AI ecosystem in practice: startups + hyperscalers + policy “tailwinds” (compute vouchers, industrial parks, local government support) and how that differs from the U.S. model. 29:46 — China’s development playbook vs others + the India comparison: proactive bottleneck-solving (“ground game”), plus India’s tailwinds and constraints over the next decade. 41:00 — The hedges + the wrap: what could derail or reshape the trajectory (trade backlash, geopolitics, bubble risk, robotics paths), and Kyle’s non-consensus take on policy intervention. AI-generated transcript Grace Shao (00:00)Hi, Kyle. Thank you so much for joining us today. Kyle, I want to start with your recent New York Times op-ed, which had a pretty provocative headline. It’s called, In the Future, China Will Be Dominant, the U.S. Will Be Irrelevant. When I saw that, I was like, whoa, this guy, someone’s going to go get blood now. How did that piece actually come about? What was the main, I guess, objective or goal out of that piece? Kyle Chan (00:16)Yeah, yeah. Thanks for asking about that piece. Yeah, that piece, it got quite a reaction. I was surprised. And there’s been a number of pieces I feel like now—sort of, it’s almost become a genre of like all the things that China’s doing, all the things that the US is doing, the sort of divergent trajectories of the two countries, especially on technology. And for me, one thing I really wanted to focus on was— So we had the big DeepSeek moment earlier in the year, and that really got people to wake up and take notice of what’s happening in China and China’s tech development in a way that really, I mean, I can’t remember the last time that something like that happened. And so that was quite a big wake up call. But as someone following a number of different sectors in China for a while, I was like, this is just the tip of the iceberg. I mean, first off, within AI itself, DeepSeek—I think it was kind of funny—was surprising for a lot of people who follow actually China’s AI industry quite closely, because I think we might have been expecting some of the bigger tech companies to have made a bigger splash, but DeepSeek seemed a little bit out of left field. But within AI in China in general, there is so much talent, so much engineering talent, a vibrant developer community, top-notch researchers. So like when you look at, say, who is accepted, whose papers are accepted for NeurIPS, one of the top AI conferences, right? It’s many, many, many names from Peking University or Tsinghua University or Zhejiang University. And so if you follow that space for a while, DeepSeek was not so surprising. Maybe it was surprising that it was DeepSeek itself, but that China could produce a world-class AI model on par or nearly on par with some of the best in the US—that was maybe not so surprising. And then it’s not just AI. The other thing is like when you follow EVs or when you follow batteries, or if you follow anything related to clean tech—solar, wind, hydrogen fuel cells. If you follow robotics, anything related to industrial automation, industrial robotics, also self-driving cars, smart driving systems. I mean, the list goes on and on for all these different areas. And then it gets even down to sort of like the basics, right? So like some of these traditional industries where you just see this like classic China chart. Call it like the classic China chart where it’s like the share of global manufacturing for shipbuilding, say, or steel—is like, at first you see like China is growing and then soon it’s like eclipsing the rest of world combined. So to me, it was this bigger story that I really want to highlight: not just DeepSeek and not just AI China, but more broadly speaking, what is this bigger trend and why should we care? How is this going to shape not just Chinese society, but the rest of world? Grace Shao (03:11)I think to your point, DeepSeek was very secretive, yet it wasn’t like it’s within the AI industry in China—people were already noticing it and people were talking about, I think maybe six months before even they came out with their first R1 and then V1. But I think to your point, yeah, it was a shot to the West because it was like, wow, we always knew that China had strong industrial capacities, right? Like you said, like we had the manufacturing capabilities, the factories and whatnot, the hardware capabilities. They didn’t expect something like a software to come out of China that was almost on par with what they could produce in the West. I guess my question for you next is then to highlight that—what was your goal really? What was your real message that brought you public? Why did you publish an op-ed on the New York Times? Kyle Chan (03:55)Yeah, so part of it was to kind of point to the underlying drivers for what was happening because I also wanted to kind of correct this image of China, not only in terms of like China’s tech development, but also what really was responsible for some of that. So like the image I want to correct was basically this very old notion of China making, you know, low value added commodities like household goods, basic consumer electronics maybe—stuff that maybe is good for economic growth, but isn’t so impressive technologically and doesn’t really challenge, say, the US or Europe or other industry incumbents in these areas. I want to first point out that, yeah, this is different China now. And this process has been unfolding for a long time, actually. So I was trying to highlight some of the efforts that the government was trying to do to help accelerate not just industrialization, but innovation itself. This idea that it’s still so deeply controversial in the US—the idea that the government might have a positive role to play in supporting private sector development, supporting cutting edge technology—I think that that is still something that’s debated very hotly in the United States. And I wanted to point out how China has been able to use—not successfully every time, and there’s definitely issues along the way, but overall, quite effectively—it has been able to use industrial policy to really move the needle and support its industries and its private sector. And so this combination too of like, it’s not just one or the other. It wasn’t just sort of all top-down state driven and it wasn’t just all sort of bottom-up private markets. It was this interesting combination that has produced, I think, these sort of like world beating industries. And I think the lesson—a big part of the piece was about the US side of it and what lessons we might take away and how the US might need to step up its game. I don’t know if this competitive framing is the right one, but in general, a realization that, okay, there’s a lot happening. This assumption that China would always be the center of low-cost manufacturing and the United States would be the center of high-tech R&D, innovation, Silicon Valley—that the picture was much, much blurrier than that. So that was sort of like my overarching goal. Grace Shao (06:27)I definitely want to double click on the part where you talk about how the state and the private sector actually work together. And we can talk about that later. But I want to get a sense on what kind of feedback or pushback or even maybe criticism

    53 min
  8. AI Governance From Brussels to Beijing: George Chen on APAC’s Different Path

    12/16/2025

    AI Governance From Brussels to Beijing: George Chen on APAC’s Different Path

    Most AI policy conversations still orbit around Washington and Brussels, but Asia-Pacific is already writing a very different rulebook. In this episode, I talk with George Chen, Digital Partner at The Asia Group and former Meta policy executive, about how AI is actually being governed, built, and deployed across APAC, China, and the global south. George traces his own path from journalism to big tech to advisory work, and uses that vantage point to explain why APAC is not “one market”—and why the EU analogy breaks down almost immediately. Countries like Japan, Korea, Singapore, and China are leaning into AI as a tool for economic recovery and industrial upgrading, often taking a much more pro-innovation, pro-growth stance than the EU’s more precautionary approach. At the same time, Southeast Asia is becoming the physical backbone of the AI build-out: Singapore as HQ and regulatory hub, with Malaysia, Indonesia, Thailand, and the Philippines hosting the data centers, power, and connectivity—along with all the local tensions that come with that. We also get into what “responsible AI” actually looks like inside a company. Beyond the buzzwords, George breaks it down to three pillars—security, safety, and privacy—and talks through how mature players like Microsoft or Meta build these into product design from day one, versus the reality for startups trying to ship fast with one lawyer and a single policy person supporting multiple markets. He also makes the case that fragmented regulation and the lack of international standards are becoming a real tax on innovation, especially outside the US and EU. Another big thread is the emerging US–China competition over AI governance itself. It’s no longer just about who has the best models or chips; it’s also about who exports their rules, norms, and defaults to the rest of the world. The US is pushing an “America-first” innovation and safety model to allies, while China is pitching AI as a kind of public good to the global south—combined with a more cost-efficient, top-down deployment model and very strict cyber and real-name rules at home. George argues this divergence is already shaping how content, deepfakes, and AI-generated media are treated in different jurisdictions. We talk about the local edge of Chinese models—why in places like Beijing, models such as DeepSeek can be more useful than ChatGPT or Gemini for everyday queries because they’re trained on more localized, timely data. From there, we zoom out into the new AI talent map: countries like Indonesia, Vietnam, Kazakhstan, and Uzbekistan trying to position themselves as low-cost AI talent hubs and “back offices” for global AI companies as coding gives way to prompting and applied ML. We close on a more philosophical note: should AI be built as a subordinate assistant or a true partner? George shares his uncertainty here, and we talk about what happens when we give AI more agency, emotional intelligence, and continuous workloads. At some point, the conversation shifts from safety checklists to ethics, culture, and even “digital colonialism”: whose values, whose norms, and whose worldview are encoded into the systems that end up mediating how we see the world. In today’s world, there’s no shortage of information. Knowledge is abundant, perspectives are everywhere. But true insight doesn’t come from access alone—it comes from differentiated understanding. It’s the ability to piece together scattered signals, cut through the noise and clutter, and form a clear, original perspective on a situation, a trend, a business, or a person. That’s what makes understanding powerful. Every episode, I bring in a guest with a unique point of view on a critical matter, phenomenon, or business trend—someone who can help us see things differently. For more information on the podcast series, see here. AI-generated transcript. Grace Shao (00:00) Hey George, thank you so much for joining us today. I’ve been really excited and waiting for this chat. You know, you are a very busy man. You’re constantly traveling. I can barely reach you in Hong Kong. So really appreciate your time today. Sit down with me and share your insights with my followers and some of our listeners. To start with, you’ve worn many, many hats. A journalist, tech executive, policy advisor, and now a partner at the Asia Group where you advise a lot of force, you’re probably helping companies on, I believe, geopolitical positioning, right? George Chen (00:29) Thank you. First of all, thanks for the invite. It’s quite an honor to join a growing cohort of guests for your program. Really happy to have a discussion about tech and policy issues because I think you’re right. My first 10 years in media, similar to your background, and most recent decade, I work very much on the intersection between technology and policy. My biggest takeaway from my last job at Meta, one of the platform operators in the world, is sometimes we very much focus on technology development, like the breakthrough, while the resources for policy support are actually quite limited, especially in the Asia-Pacific region compared with the US. think for all the... Big tech in the US, given the politics domestically, they have to do a lot on political and policy part. But for Asia Pacific, the policy work, compared with other investments, like in data center, technology, hiring of engineers, it’s still very, very, very understaffed, under-resourced, and sometimes under-appreciated. This is why we need to... address some concerns about policy issues as we advance the technological part. Because I always tell my students, tell my friends, tell my partners that the key challenge, even you have CharGBT 5.0 or 6.0, the key challenge is how to get the government to understand new technologies and also get the users to have more trust in those new technologies. Otherwise, nobody use it, nobody trust those things. And that makes them. Grace Shao (02:15) I think that’s super helpful. A lot of times when we think about policy or safety issues, we think about it as like a siloed part of the ecosystem. But really like exactly to your point, like, you know, we need the developers to understand the concerns of the users. We need the users to understand the safety risks of the products. We need the regulators to understand what it means to implement these like technology throughout our economy, right? So there’s it’s like, it’s actually all interrelated. I think today to start off with, let’s like go into big tech, just give in your background with Metta, working with a lot of these big tech companies. You’re based in Hong Kong for the listeners, but actually work predominantly for American big tech companies. What is like the, I guess, the fundamental feel right now as we see the evolution be from a social media company for AI to AI of focused company as this is now the forefront of their strategy. George Chen (03:11) Right, so for the Asia-Pacific region, it’s big. I always try to explain to my clients and friends, when people talk about Asia-Pacific, the first gross perception, perhaps from Western perspective, is, okay, treat Asia-Pacific like the EU, right? But EU is a single market. They have very much shared the language, English, also one currency and they have the European Parliament to pass legislation for EU member countries. Asia-Pacific is far diverse, far different, and much bigger. So it’s hard to just copy whatever works in EU and then let’s also do it in APAC. Using AI regulations as a clear and classic example, you know, you is the first You know government, you know to have the world’s first AI act, right? But the so-called the Brussels effect didn’t really happen this time in Asia Pacific countries You didn’t see like all the countries, you know, like Singapore or you know Japan to quickly follow up on You know to have a similar like a risk-based approach or penalty focused approach to AI, right? Instead, you know if you look at Japan. They are very much welcoming. Japan declared to be, they want to be the most friendly open country for AI developments. The first data exception for AI testing was actually in Japan. And then Singapore followed, and Hong Kong’s also not considering, right? So APAC took a very different regulatory approach to AI versus EU. I think this is something all the American tech companies have to realize. It’s not like America leads technology and then EU matters because of the special relationship between US and EU. So as I mentioned at the beginning, the resources for public policy work are very limited in AIPAC, but EU still enjoy a lot of resources, this English-speaking market that has lot of political connections. And then Asia-Pacific, when it comes to policy enforcement, like policy support it feels more like a third country, overall speaking Asia-Pacific as a whole. So there’s still a lot of educational process, the learning curve for big tech, largely from the US to understand what are the challenges, what are the opportunities in the Asia-Pacific market. However, I also need to highlight for many big platforms, Asia-Pacific is actually not just the largest market by internet users for American tech companies, for almost for all of them, right? You know, in terms of user base. It is also a very important revenue source, know, the source of revenue for those American companies. So now you see the imbalance, right? You you make a lot of money from Asia-Pacific, but the support you give to Asia-Pacific is quite limited, know, compared to in the US ⁓ and EU. So the learning curve is there. American tech companies want to have a more sustainable development and want to have a more constructive relationship, sort of a more constructive partnership with Asian governments. I think there’s still a lot of work to do. Grace Shao (06:31) I think that’s really helpful to help

    52 min

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Every episode, I bring in a guest with a unique point of view on a critical matter, phenomenon, or business trend—someone who can help us see things differently. aiproem.substack.com

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