Speaker 1: Today, and over the last couple of days, I've been reading about China and some of the companies in China, one in particular, coming up with a faster method of AI and much less expensive method. And that's good, because you don't have to spend as much money. I view that as a positive, as an asset. So I really think if it's fact and if it's true, and nobody really knows if it is, but I view that as a positive, because you'll be doing that too, so you won't be spending as much, and you'll get the same result, hopefully. The release of deep-seek AI from a Chinese company should be a wake-up call for our industries that we need to be laser-focused on competing to win, because we have the greatest scientists in the world. Even Chinese leadership told me that. They said you have the most brilliant scientists in the world.

Speaker 2: Today, China has made an important statement that has already led to a market crash and may cause the bankruptcy of Elon Musk, OpenAI, and NVIDIA. Chinese deep-seek causes panic in the artificial intelligence market. Wall Street is opening up with a crash because deep-seek raises doubts about the efficiency of spending on artificial intelligence, chips, and infrastructure. Deep-seek is a Chinese response to OpenAI and chat-GPT. The program has just appeared in the American App Store, but it already takes the first place in the top of applications, ahead of chat-GPT, Treads, Google, BlueSky, and others. In addition, the shares are now repurchased. This is stated by the Shiller coefficient, now it is about 38 points. Historically, the highest value of this indicator was 44 points during the dotcom bubble. And now we see the third most repurchased moment in the last 150 years. Do you remember this graph? This is the ratio of Bitcoin to NVIDIA. And when we last looked at this graph, we assumed two scenarios. Either that Bitcoin is still undervalued, or that NVIDIA shares are highly repurchased. Considering that Bitcoin has already passed 80% of its cycle, most likely the second option is more suitable. This means that NVIDIA shares were indeed repurchased. It seems that what we are now observing on the market is a combination of those factors that we saw during the dotcom bubble and the 2008 financial crisis. That is, at the same time, we see two factors at once. The first is the excessive emission of money, with which the market is inflated. And the second is that everyone lives for borrowed money. Even Michael Saylor buys Bitcoin for borrowed money as a guarantee of shares or bonds. CEO's of large tech companies such as Elon Musk win from the current market situation, creating hype around their companies, which supports the high price of their shares and allows them to attract financing as a guarantee of these shares. Musk, in particular, uses the popularity of his companies such as Tesla and SpaceX in order to borrow money, providing the shares of these companies as a guarantee. However, if his companies face problems, for example, due to a decrease in demand or competition, this can cause a sharp drop in the value of the shares, which will lead to significant financial losses. One of the threats for such companies is competition from Chinese players such as DeepSeek. After all, these companies can already offer cheaper technologies in areas such as AI or electric cars, which will allow them to take away the share of the market and reduce the profits of competitors. Chinese solutions, thanks to lower prices for development and content, can significantly reduce the margin of such companies as Nvidia, which produces chips for AI, Tesla, which produces electric cars, and OpenAI, the developer of AI. This is why the markets went down today after the Chinese announcement from DeepSeek. DeepSeek continues to shake the market, because traders are afraid that the United States may lose leadership in the field of technology. The Chinese laboratory EE DeepSeek significantly reduces prices compared to OpenAI. I will show you an interesting diagram. DeepSeek set prices for its language models, and they were 20-40 times lower than OpenAI. This is just crazy, 20-40 times. And here's what's interesting. In an interview with the founder of DeepSeek, he is asked how they are going to compete with American companies such as OpenAI, how they write code, what happens to their hardware, and so on. And it all led to the fact that the main obstacle for artificial intelligence was still a lacking number of chips, which increased costs and, accordingly, increased prices for products. If you haven't been following the stock market, then lately we've had a real boom around NVIDIA chips. Many have found themselves in pursuit of these chips, because they believed that AI was the future, and you could make good money on it. Many also assumed that if they bought a lot of chips, everyone would use their AI and products related to AI. And this would lead to big profits. Elon Musk, for example, tried to enter this market and even filed several lawsuits against OpenAI, trying to get his share in this market. However, the question arises, what if it turns out that such expensive chips as NVIDIA are not needed for artificial intelligence? What if companies overpaid for these chips and will not receive the promised return on investment? The problem is exacerbated by the fact that the Chinese company DeepSeek can already offer similar, and maybe even better, AI technologies at much more affordable prices. This causes concern on Wall Street, because it can reduce the profitability of the margins of Western companies that work in this area, including NVIDIA, OpenAI and Elon Musk's company. That is why I showed you this diagram. DeepSeek set prices for its models 20-40 times cheaper than OpenAI. And this is actually the most important news, because the Chinese actually said that their market is overestimated by 20-40 times. You should understand that this does not apply only to artificial intelligence. What happened today is just part of a global phenomenon in many industries. For example, the latest data shows that Apple is already in third place among smartphones in the Chinese market. Why? Because Chinese brands such as Huawei, Xiaomi and others have begun to increase their share. Chinese smartphones are becoming cheaper and better in terms of price-quality ratio. Even in countries like the United States, they began to push out top brands. Why is this happening? It's very simple. When the economy is declining, consumers begin to look for more affordable options. If before everyone dreamed of the flagship from Apple, now more and more people understand that you can get the same quality for less money. This is a trend that we see not only in the smartphone market, I notice it even for myself. A similar situation with Bit and Tesla. Tesla was definitely a pioneer in the industry, but there is already serious competition on the horizon. For example, the Chinese company Bit. It makes electric cars much cheaper than Tesla, and in some cases they are even better. Yes, I know, Tesla fans will say that I froze stupidity, but then I will show them the prices for both Tesla and Bit. Then they will understand what I'm talking about. Look, for example, Tesla Model 3, the price is about $ 44,000. And now look at the Bit Seagull model, its price is only $ 10,000. This is about 4 times cheaper. Tesla Model X costs about $ 81,000, while a similar model from Bit, Yuan Plus, will cost only $ 18,000. The price difference is colossal. And if a consumer can get a product of comparable quality, and I would say sometimes even better quality, for less money, then under the conditions of the growth of the cost of living, inflation, rent, housing, and so on, what will he choose? The headline from January 18, 2025. The largest manufacturer of electric cars in China, Bit, produced more cars than Tesla in 2024. This is a signal of a global shift to cheaper electric cars. And we are talking only about Chinese electric cars and the fears that they generate in the hearts of Tesla investors. But they threaten, in quotation marks, not only American companies, but also Korean ones. This is like another example. Korean manufacturers are also very worried about Chinese cars. Why? Because the Chinese come with products that cost much cheaper. Now this is especially important. If you can offer almost the same product, but at a lower price, then most consumers will most likely choose it. This is not only about cars, artificial intelligence, and so on. This is a story that repeats itself on different markets. Once you could buy TVs of American or German brands. And on that market everything seemed stable. If you want a high-quality TV, buy a German one. But then the Japanese came with high-quality TVs at an affordable price and simply turned the game upside down. In the same way, the Chinese began to produce goods, be it cars, phones or TVs with low quality, but the price was much lower. People bought because the price was ridiculous. And yes, the first Chinese products often broke or were just copies. No wonder we had a joke about Made in China. But over time, the quality improved and now the Chinese can offer high-quality goods at a much lower price, which raises the question of the future of many large brands. If the Chinese product is almost the same, or even better, why overpay? If we talk about software, the important point is that cheap chips can be used to develop software. And this does not always mean that the user will feel the difference. Software can work just as effectively even if it uses less expensive components. The problem is that AI companies are now literally running out of money like blood just to lure you and other users. They offer their products for free, but there are huge costs for electricity, servers and developers. And all this does not bring them profit if their product does not make a profit. In addition, if your main product is software, there is another risk in your business. Considering that the code often slips into the hands of Chinese companies. But you understand how it happens. Now let's take a look at Tesla. Everyone knows that this is an innovative company. And many fans claim that Tesla is not just a car company. This is a company that produces software for cars. All these autopilots, software for cars, this is their key advantage. But here's the interesting part. Elon Musk runs his business in China. He has a factory there, and what is important, he never criticizes China. What if Chinese companies take these technologies and start using them in their cars, offering them at much lower prices? I will not be surprised if this happens. This is already happening with AI and language models. This is called Deep Seek. Imagine that Chinese cars will probably use the same software, but at a much more affordable price. How will this affect Tesla? Its share in the market? How will the market react when a competitor offers the same features, but for less money? Pay attention to this diagram, which was recently published. This is an analyst's forecast for what will happen to Tesla in 2025, compared to Musk's forecasts. All forecasts say that Musk will most likely not fulfill his set goals. This is not the first time when his forecasts do not coincide with reality. Earlier, many thought that Tesla would still be able to achieve their goals this year. But now the situation looks completely different, and this is why the markets are in panic. The problem is that Tesla has faced a huge competition, especially from Chinese cars, which enter the market at much lower prices. Elon Musk understands that their future on the market is becoming more and more complicated. Tesla does not have new revolutionary products to reach a new level. Chinese cars are cheaper and sometimes even better in characteristics. And if you add Korean and Japanese competitors to this, Tesla, no matter how much we want it, may be in a disadvantageous position. This is why Musk has sharply entered the field of artificial intelligence. He hopes that this will help his companies to break into the new market. But as we know, it is not easy to do this. Recently, Trump said that the United States plans to invest $ 500 billion, and this will be both private financing and state support in the form of tax benefits, in artificial intelligence. But will it not be the tax money of ordinary citizens, which will be invested in artificial intelligence? We need to ask Trump about this. In any case, there is one nuance. Musk himself said that many of these companies do not have money, and they are just lying about their capabilities. This creates great risks, because Musk and his company may also find themselves in a situation when they simply will not have enough funds to continue their path in AI. This is what this headline says. Elon Musk doubts the Stargate project for $ 500 billion. Literal quote. They do not have such money. In addition, Musk is actively engaged in politics around the world. Many believe that by doing so, he spoils his reputation and the reputation of his brands. For example, some investors on Wall Street begin to sell everything related to Elon Musk's products, thinking that it would be better if he did not interfere in this policy. Musk has recently tried to influence politics in Germany, and this is not for nothing. The fact is that he is looking for ways to get financial support and state subsidies for his companies. Musk increasingly uses his connections and resources to find ways to support his business, including getting help from the government and not only American. And we are not only talking about artificial intelligence, but also about how Musk is trying to adapt to changes in the market. Recently, there was such an article, and I want you to pay attention to it. This is necessary to understand how Chinese technologies and other countries are connected, not only the United States and the American tech market. Look at this example from Germany. The economy of this country is experiencing a crisis, and, unfortunately, it seems that it does not have a plan B. Elections are coming up in Germany, and people are concerned about many problems, economic difficulties, emigrants, energy prices, climate change and war in Ukraine. Now I want to show you another diagram. This is very important. This is the export of cars. Do you see the red line? This is China, which exports a huge number of cars, not even paying attention to the fact that the European Union is raising tariffs on the import of Chinese electric cars. And in Germany, this graph, on the contrary, is slightly reduced. China can fill the market in different countries of the world with its cars. Germany has always been focused on the export of its goods, and German cars are the main element of this export. But here's what's going on. Chinese cars, such as Bit, come to the market and turn out to be much cheaper than German BMW or Volkswagen. If a consumer can buy a Chinese car for a quarter of the cost of a German counterpart, what will happen to the German market? This is already a serious blow to the German economy, because Germany is focused on the export of goods. The government has not invested so much in software, they are more focused on production. And now it's hard for them to turn this ship around, especially when the economy is going down. Can the German government, in the current conditions, suddenly start subsidizing all these companies that are engaged in software to catch up with this mania? I'm not even talking about Chinese companies going into the market and starting to make a profit by taking it from German companies. It is enough that the Chinese are already starting to lower prices and reduce profits from all companies that have invested in artificial intelligence. This is what the Chinese Deep Seek is doing, it is starting to blow up this blown bubble 20-40 times. That's why I call it a bubble of technology plus a bubble of a great financial crisis. And in addition to everything, Musk is beginning to interfere in politics around the world, including in the United States and Germany. This always happens in a situation when the economy is going down and companies are starting to fire their employees. People lose their jobs, face difficulties and start looking for culprits. This often leads to the growth of populist right-wing movements that blame foreigners and emigrants for the problems of the country. This cycle has been repeating for hundreds of years. But these movements do not tell the whole truth that the cause of economic difficulties is actually much wider. We are facing a global slowdown in the economy. Over the past few years, a huge amount of money has been printed all over the world, which is why there is high inflation and we still feel the consequences of the pandemic and the supply chains destroyed during the lockdown. Because of this, consumers no longer want to spend the same amount of money as before, which reduces consumer demand. They are looking for the same quality for less money. A Chinese car instead of a German one, a Chinese dipsy instead of an American Chad GPT. We also see an all-time decrease in birth rates because of this. In many countries, the birth rate coefficient does not even allow you to simply save the population at the current level. This means that we cannot count on endless growth. All this leads to the fact that the economy in the world, including in the United States, is entering a period of instability. In this situation, we cannot expect all-time growth. Companies that have previously been betting on are starting to face problems. This is why we are discussing these topics. In theory, Bitcoin could protect us from all these problems. From high inflation, from loss of purchasing power, from price increase. If it did not correlate so much with the stock market. As soon as NVIDIA collapsed, Bitcoin also went down. Unfortunately. And about Musk, his name is now in the air. But Musk, in my opinion, is more like a person who lives on hype than a real innovator. He can perfectly manipulate public opinion, creating excitement around his companies and even individual cryptocurrencies. Like Dogecoin. Musk was able to build his business on popularity, and today he uses it to support the price of shares and borrow money, putting shares as collateral. But what will happen if his companies face real problems and competitors? And what will happen if Chinese companies such as DeepSeek begin to offer cheaper technologies? At the same time, in terms of quality, they are no different. This seriously undermines the entire model. Not only Musk, but also other people like Sam Altman. This week we will see the income reports, and we will see how companies will react to Chinese cheaper technologies. Apple, AT&T, Microsoft, Tesla. All of them will report this week. If the reports are worse than expected, this fall is not over yet. In addition, we have Trump, a rather unpredictable character, who says, I will impose tariffs on you if you do not do what I say. The other day he quarreled with Colombia because he tried to use military aircraft and military resources to send illegal migrants back to Colombia. Colombia refused to accept them, saying that if you want to deport these people, use civilian, not military flights. Obviously, if another country starts using its military aircraft in the airspace of your country, you probably will not be happy about it. This is literally a military invasion. Also, Trump called the Prime Minister of Denmark and literally demanded to give up Greenland. The conversation was tough and tense, and Trump behaved aggressively and not diplomatically. It was terrible, said one of the interlocutors. The other added, Trump was very firm. It was a cold shower for us. It used to be difficult to take it seriously, but I think it is serious and potentially very dangerous. Trump threatened with specific measures against Denmark, such as tariffs. This is exactly what we are talking about. I will impose 25% tariffs, and if you do not do what I want, I will impose 50% tariffs. Elon Musk recently published a photo of Trump, in which he looks like a gangster. And, by the way, some meme coin Fafo flew up because of it. I do not advise you to buy it. But what is Fafo? This is an abbreviation of this phrase. Thus, Trump says that if other countries or people act wrongly towards the United States and do not listen to him, they will face severe consequences. This is part of his rhetoric in international politics and trade relations. This is the market we have today. At any moment, a black swan can occur, which will collapse everything. And we know that if Bitcoin falls by 5%, then altcoins fall by 30%. And, by the way, about altcoins. Eric Trump, the son of Donald Trump, said that altcoins made in the United States will not really be taxed for profits. But all other non-American cryptocurrencies will receive a minimum of 30% tax. If this is the case, I suspect that non-American altcoins may suffer greatly, because American citizens will sell them. And, most likely, before they are taxed, so that this very tax is not paid. I understand that today many other channels are trying to focus on US and Trump's policies. Left, right, everyone is talking about it now. But I want you to understand that there is a wider world besides the United States. There are many other countries and they are all interconnected. We buy from each other, we sell to each other. So, Trump's goal is to introduce tariffs for foreign companies, so that they pay taxes instead of Americans. If a foreign company or country is trying to import goods to the United States, then they will have to pay a tax. In fact, a tariff. Now the question is, where will this money go from the tariffs? Trump wants to create a new agency called the Foreign Tax Service. It can be easily confused with the US Tax Service. By the way, Trump has already begun to fire employees of this tax service. It will be a kind of new body, and in its essence it is a tool that will send the money earned from these taxes to foreign companies in a sovereign US state fund. I think that they use this money to subsidize companies like Musk and other companies. Or maybe they will just put it in their pocket. Or they use it to buy Greenland and finance their other aggressive foreign policy actions. I hope that at least some of them will spend on Bitcoin Reserve. Although I would not bet all my fortune on this. Especially considering that the CEO of Ripple, Brad Garlinghouse, is trying his best not to allow this, promoting his own XRP token instead of Bitcoin. Whatever they do with this money, the main point is that when Trump says more tariffs, it will not bring us any benefits. It will not bring any benefit even to an ordinary American. In fact, this will only increase their spending on goods and, perhaps, will help Musk theoretically save Tesla. I say theoretically, because in the end I do not think that the money will be enough. Although, perhaps, this will make them start printing this money. Perhaps all companies will run to the US Federal Reserve and beg them to print money. For the economy, this is bad. For inflation, this is bad. For risky assets, this is good. When you increase prices for everything, people just stop spending money on these goods and switch to something cheaper. For example, they buy a Chinese DeepSeek, which is 20-40 times cheaper than a GPT chat or a BIT, which is 4 times cheaper than Tesla. And this already leads to a global shift. Let me know what you think about it in the comments under this video. 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