> ## Content Index > Fetch the complete content index at: https://unprecedented.ghost.io/llms.txt > Use this file to discover other available public pages before exploring further. # China Crisis - URL: https://unprecedented.ghost.io/archive/china-crisis/ - Published: 2025-01-27T16:28:09.000Z - Updated: 2025-01-27T17:22:06.000Z - Description: To please Elon, Trump has softened his stance on China. Will that change if China humiliates the US in AI? - Author: Richard Hine - Tags: elon musk, china, AI, trump and china, mump regime Stocks plunged Monday amid growing concerns that China was achieving rapid advances in AI at a fraction of the cost of America's big tech companies and frontier labs. Markets were perhaps not reassured by the sight of Trump, who had insisted he would be [too busy](https://www.abc4.com/news/national/trump-says-hes-talking-with-potential-investors-about-the-future-of-tiktok/?ref=unprecedented.ghost.io#:~:text=Trump%20popped%20in%20to%20the,the%20potential%20future%20of%20TikTok.) this weekend to hit the links, starting a [massive diplomatic crisis with Colombia](https://www.the-express.com/sport/golf/161698/donald-trump-colombia-crisis-golf-course?ref=unprecedented.ghost.io) while golfing on Sunday. ![](https://storage.ghost.io/c/68/2e/682e9b3f-92a8-4b35-9f3b-3e61f1face3d/content/images/2025/01/Screenshot-2025-01-26-at-10.02.35-AM.png) Meanwhile, egg prices are surging and rains in L.A. created new mudslide dangers as [fires continued to rage](https://www.the-independent.com/news/world/americas/hughes-fire-map-los-angeles-acres-wildfires-b2685045.html?ref=unprecedented.ghost.io). ### "Rout" on Wall Street What CNBC called "an artificial intelligence stock rout" saw Wall Street darlings like chipmaker [Nvidia](https://finance.yahoo.com/news/nvidia-chip-stocks-plummet-amid-market-sell-off-as-deepseek-prompts-questions-over-ai-spending-135105450.html?ref=unprecedented.ghost.io) and [Constellation Energy](https://www.yahoo.com/news/m/83e41b36-d973-3ac4-95b0-ac7ee5e0a5e1/constellation-energy-vertiv-.html?ref=unprecedented.ghost.io) plunge in value, with Nividia alone losing almost half a trillion in value in the [first-hour of trading](https://www.investing.com/news/stock-market-news/nvidia-shares-drop-as-investors-assess-implications-of-deepseek-launch-3831096?ref=unprecedented.ghost.io), and Constellation down more than 16%. (Constellation is the company working with Microsoft to restart the Three Mile Island nuclear plant outside Harrisburg, Pennsylvania.) The AI boom of the past two years has seen the "[Magnificent 7](https://money.usnews.com/investing/articles/magnificent-7-stocks-explainer?ref=unprecedented.ghost.io)" group of stocks sustain the S&P 500's performance. But the emergence of low-cost Chinese startup DeepSeek—which rocketed past ChatGPT to the top spot on the App store—now "threatens the American exceptionalism premium on US stocks," says [CNBC](https://x.com/CNBC/status/1883885871226638681?ref=unprecedented.ghost.io). ![](https://storage.ghost.io/c/68/2e/682e9b3f-92a8-4b35-9f3b-3e61f1face3d/content/images/2025/01/Screenshot-2025-01-27-at-10.25.22-AM.png) Less than a week after Trump's inauguration, [US power stocks plunged](https://www.cnbc.com/2025/01/27/power-stocks-plunge-as-ai-energy-needs-questioned-due-to-new-china-model.html?ref=unprecedented.ghost.io) as DeepSeek's new model "led investors to question how much energy artificial intelligence applications will actually consume." As the UK's conservative *Daily Telegraph* put it, the success of DeepSeek is humiliating the US and "could undermine Trump." ![](https://storage.ghost.io/c/68/2e/682e9b3f-92a8-4b35-9f3b-3e61f1face3d/content/images/2025/01/Screenshot-2025-01-27-at-10.42.08-AM.png) As Matt Stoller writes in the [BIG](https://www.thebignewsletter.com/p/monopoly-round-up-china-embarrasses?ref=unprecedented.ghost.io) newsletter: > DeepSeek’s accomplishment is... terribly embarrassing, and also threatening for big tech and the American security apparatus. The presumption was that raw computing power is a competitive barrier in AI, these new models suggest it may not be as much as we thought. Meanwhile, short-sellers [are](https://x.com/TheShortBear/status/1882790431051960381?ref=unprecedented.ghost.io) salivating. Trump has already gambled much of his presidency on the advice and (possibly drug-induced) [sci-fi visions](https://unprecedented.ghost.io/archive/super-vision/) and [crypto scams](https://www.coindesk.com/markets/2025/01/27/bitcoin-may-be-double-topping-for-a-price-slide-to-usd75k?ref=unprecedented.ghost.io) of the likes of not-just-a-tech fascist [Elon Musk](https://www.thenerdreich.com/the-nerd-reich-elon-musk-salute-trump/?ref=unprecedented.ghost.io) and Musk's ["Mini-Me" David Sacks](https://unprecedented.ghost.io/archive/all-in-on-fascism/). The [Mump Regime](https://unprecedented.ghost.io/archive/the-mump-regime/) has already softened its stance on China to accommodate [Musk's business interests](https://www.axios.com/2025/01/20/musk-china-vice-president-han-zheng-trump-inauguration?ref=unprecedented.ghost.io). But Trump's inflationary tariffs might be back on the table if China continues to humiliate the US in AI, a sector Trump vowed to "[dominate.](https://www.whitehouse.gov/fact-sheets/2025/01/fact-sheet-president-donald-j-trump-takes-action-to-enhance-americas-ai-leadership/?ref=unprecedented.ghost.io)" --- *Thanks for reading! While* [*paid subscriptions*](https://unprecedented.ghost.io/) *(billed to TLD Media LLC) and* [*one-time tips*](https://www.buymeacoffee.com/thedailyedge?ref=unprecedented.ghost.io) *are always welcome, all content to this ad-free newsletter is free, so* [*subscribe for $0*](https://unprecedented.ghost.io/) *and you won’t miss anything. And feel free to share this content knowing there’s never a paywall!* [Upgrade for just $2/month](https://unprecedented.ghost.io/2-a-month-cancel-anytime) [Leave a one-time tip](https://buymeacoffee.com/thedailyedge?ref=unprecedented.ghost.io) *P.S. This really is the time to get off X once and for all. 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