6 ms·

> Companies can still make money from commodities Especially Chinese companies. Just think about all the other industries where Chinese companies dominate by e

by zwu-var 2mo ago

> Companies can still make money from commodities Especially Chinese companies. Just think about all the other industries where Chinese companies dominate by extremely low cost.

wilg 2mo ago
Isn't that typically because they have lower labor costs? Not sure that applies as much to AI.
- weird-eye-issue 2mo ago
  There are other factors too, for example I can't imagine that there are many protests in China against building data centers.
  - hnynf 2mo ago
    In China, no one opposes construction because data centers do not compete with the public for electricity.hhh~~
  - linzhangrun 2mo ago
    The idea of people protesting these things in China is simply a fantasy. People always just accept and carry out what government want.
    - weird-eye-issue 2mo ago
      Yep that was my point
  - byzantinegene 2mo ago
    it's not like the protests are working anyway
  - podocarp 2mo ago
    You can avoid that if you just plonk them in the desert, where there's also probably infinite solar E.g. https://www.bloomberg.com/graphics/2025-china-data-centers-nvidia-chips/ https://www.bloomberg.com/graphics/2025-china-data-centers-n...
    - tim-projects 2mo ago
      America has plenty of desert. Wierd that it's not used.
      - throw2ih020 2mo ago
        Oh, they're trying, and the locals are not happy, due to both the rise in electricity usage (mostly NOT solar) and environmental damage. Look up the datacenter planned in Box Elder County, Utah.
    - ButlerianJihad 2mo ago
      Great, so you plonk data centers into the desert. Now you need to cool them, and bestow them with excellent network connectivity. Those are things that isolated, arid locations cannot do very well. So, plonking data centers into the desert (or on orbit) isn't really a silver bullet, is it?
      - AlotOfReading 2mo ago
        China has an explicit national policy to build high bandwidth network connections across the arid Western half of the country called the digital silk road. And on the scale of China's other projects in the west (e.g. mining, large scale agriculture, chemical plants), the water usage of a data center or ten is a rounding error. I don't know if they're actually building AI DCs out there, but it doesn't seem completely unreasonable like you're suggesting.
        ButlerianJihad 2mo ago
        > doesn't seem completely unreasonable Of course it doesn't seem completely unreasonable to build out power distribution, cooling, and high-bandwidth network interconnects throughout a region, but once you've done that, you are no longer facing the empty, barren desert scenario. So if China builds out infrastructure that can be maintained in perpetuity, then more power to them, and the NIMBYs won't have a leg to stand on. Conversely, in these United States, I've seen literal tons of data centers being plonked into urban centers: literally at intersections where lots of people drive by in daily commutes, there are data centers now where there weren't before, and they are also found on the outskirts of civilization, because they require more security than accessibility. So data center siting can take multiple factors into account here, depending on their purpose. And can we please stop hammering on the "AI Data Center" meme, because in my experience, a DC is a DC, whether they choose to make it AI or not AI, they're probably all AI from now on, but it just adds fuel to the Luddite fires to say so...
  - ZeroGravitas 2mo ago
    The standard narrative on air pollution in China is that they had to act to clean it up as it was causing unrest amongst the population. I don't see why the same couldn't happen if they let datacentres drive up energy costs or have other widespread impacts.
    - weird-eye-issue 2mo ago
      Are you implying air pollution in China is not bad anymore? I wish that was the case because I would visit a lot more but you need to educate yourself a little bit just go look here: https://aqicn.org/map/china/ https://aqicn.org/map/china/ I'm sure it's better than it was before and it's not India bad but it's almost always considered unhealthy in most parts throughout the whole year
- cherioo 2mo ago
  Why not? Look at the silicon valley AI researcher salary. There’s no way Chinese researchers make close to the same amount.
  - tw1984 2mo ago
    Chinese AI researchers living in China can easily afford to have a butler managing a few living in nannies and a full time driver/personal assistant. Good luck for getting that type of life in silicon valley.
- roenxi 2mo ago
  I'm not really sure that China's labour costs can be described as "low" these days, going by GDP per capita [0] they're above the global average. They're a little lower than the Europe median I think but the gap probably isn't strategically important. The Chinese edge tends to come from their environmental laws; they allow their industry to do things that the West would ban. [0] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
  - byzantinegene 2mo ago
    does demolishing homes to build data centers count?
  - brookst 2mo ago
    Is GDP per capita really a good proxy for labor costs?
    - dijit 2mo ago
      it can be, if you control with the Geni coefficient. However large parts of many countries is rural, and different amounts for different countries, and that tends cause control issues. But in general, a low Geni coefficient and a high GDP per capita means labour costs are high.
    - roenxi 2mo ago
      Yep. https://ourworldindata.org/grapher/median-daily-per-capita-expenditure-vs-gdp-per-capita https://ourworldindata.org/grapher/median-daily-per-capita-e... for example. Although note the log-log axis which undersells the gaps between countries.
  - podocarp 2mo ago
    I have no source for this but I feel like the environment thing is too frequently repeated (also without any evidence). They're pumping out solar like mad and places like the Xinjiang deserts actually have nowhere to put their excess electricity from what I've read previously. They also have a "cancel" culture pointed at the right place, in that whenever there is some exposé of some xyz it usually does get some reaction from the authorities. Even if in the end no real punishment is meted out due to corruption or politics or cover ups the very least is that the perps gave to change a hiding spot. Which is very much unlike the datacenter gas turbines running in people's backyards in the US right now. Furthermore if you take a look at the Politburo meetings and political documents etc it is clear that Xi is actively trying to solve the environmental problem. In the latest people's meeting it was also a talking point. It is a matter of "face" for them at this point. Contrast with "drill baby drill"? It is easy to talk about the "environmental" problems in China but I think it is very last decade. As a disclaimer I live in Asia and I frequently visit China but I'm not Chinese nor do I get any so called "social credits" which actually don't exist in China. The information gap between what the west thinks they know about China and what it actually is is sometimes kind of just a huge joke.
- SXX 2mo ago
  To be honest I do not thihk you are wrong. Not in a way AI talent is underpaid, but they unlikely need to offer $1,000,000 sign up bonuses to just create AI lab. Its still pays better than average SWE job, but not x5-x10 more like in US. Though in manufacturing China is dominating because of immense optimized supply chain, economy of scale and now workforce with know-how. I honestly cant compare with US since I'm not from US, but to produce something in EU you will have weeks or months lags on logistics of source materials and components. And some industries only exist in some countries, etc. In China in one single place you have anything you need to produce from a toaster to a car in hands reach or might be few days at most. And I guess China did the same with education. Education is a lot cheaper there so they just have more talent.
- dd8601fn 2mo ago
  The part that applies to AI is probably that they're (accused of) distilling SOTA models at a massive scale.
brainwad 2mo ago
A bunch of those industries are unprofitable, or profitable only due to unsustainable subsidies from their local governments.

by zwu-var 2mo ago

> Companies can still make money from commodities Especially Chinese companies. Just think about all the other industries where Chinese companies dominate by extremely low cost.

wilg 2mo ago

Isn't that typically because they have lower labor costs? Not sure that applies as much to AI.

weird-eye-issue 2mo ago
There are other factors too, for example I can't imagine that there are many protests in China against building data centers.
- hnynf 2mo ago
  In China, no one opposes construction because data centers do not compete with the public for electricity.hhh~~
- linzhangrun 2mo ago
  The idea of people protesting these things in China is simply a fantasy. People always just accept and carry out what government want.
  - weird-eye-issue 2mo ago
    Yep that was my point
- byzantinegene 2mo ago
  it's not like the protests are working anyway
- podocarp 2mo ago
  You can avoid that if you just plonk them in the desert, where there's also probably infinite solar E.g. https://www.bloomberg.com/graphics/2025-china-data-centers-nvidia-chips/ https://www.bloomberg.com/graphics/2025-china-data-centers-n...
  - tim-projects 2mo ago
    America has plenty of desert. Wierd that it's not used.
    - throw2ih020 2mo ago
      Oh, they're trying, and the locals are not happy, due to both the rise in electricity usage (mostly NOT solar) and environmental damage. Look up the datacenter planned in Box Elder County, Utah.
  - ButlerianJihad 2mo ago
    Great, so you plonk data centers into the desert. Now you need to cool them, and bestow them with excellent network connectivity. Those are things that isolated, arid locations cannot do very well. So, plonking data centers into the desert (or on orbit) isn't really a silver bullet, is it?
    - AlotOfReading 2mo ago
      China has an explicit national policy to build high bandwidth network connections across the arid Western half of the country called the digital silk road. And on the scale of China's other projects in the west (e.g. mining, large scale agriculture, chemical plants), the water usage of a data center or ten is a rounding error. I don't know if they're actually building AI DCs out there, but it doesn't seem completely unreasonable like you're suggesting.
      - ButlerianJihad 2mo ago
        > doesn't seem completely unreasonable Of course it doesn't seem completely unreasonable to build out power distribution, cooling, and high-bandwidth network interconnects throughout a region, but once you've done that, you are no longer facing the empty, barren desert scenario. So if China builds out infrastructure that can be maintained in perpetuity, then more power to them, and the NIMBYs won't have a leg to stand on. Conversely, in these United States, I've seen literal tons of data centers being plonked into urban centers: literally at intersections where lots of people drive by in daily commutes, there are data centers now where there weren't before, and they are also found on the outskirts of civilization, because they require more security than accessibility. So data center siting can take multiple factors into account here, depending on their purpose. And can we please stop hammering on the "AI Data Center" meme, because in my experience, a DC is a DC, whether they choose to make it AI or not AI, they're probably all AI from now on, but it just adds fuel to the Luddite fires to say so...
- ZeroGravitas 2mo ago
  The standard narrative on air pollution in China is that they had to act to clean it up as it was causing unrest amongst the population. I don't see why the same couldn't happen if they let datacentres drive up energy costs or have other widespread impacts.
  - weird-eye-issue 2mo ago
    Are you implying air pollution in China is not bad anymore? I wish that was the case because I would visit a lot more but you need to educate yourself a little bit just go look here: https://aqicn.org/map/china/ https://aqicn.org/map/china/ I'm sure it's better than it was before and it's not India bad but it's almost always considered unhealthy in most parts throughout the whole year
cherioo 2mo ago
Why not? Look at the silicon valley AI researcher salary. There’s no way Chinese researchers make close to the same amount.
- tw1984 2mo ago
  Chinese AI researchers living in China can easily afford to have a butler managing a few living in nannies and a full time driver/personal assistant. Good luck for getting that type of life in silicon valley.
roenxi 2mo ago
I'm not really sure that China's labour costs can be described as "low" these days, going by GDP per capita [0] they're above the global average. They're a little lower than the Europe median I think but the gap probably isn't strategically important. The Chinese edge tends to come from their environmental laws; they allow their industry to do things that the West would ban. [0] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
- byzantinegene 2mo ago
  does demolishing homes to build data centers count?
- brookst 2mo ago
  Is GDP per capita really a good proxy for labor costs?
  - dijit 2mo ago
    it can be, if you control with the Geni coefficient. However large parts of many countries is rural, and different amounts for different countries, and that tends cause control issues. But in general, a low Geni coefficient and a high GDP per capita means labour costs are high.
  - roenxi 2mo ago
    Yep. https://ourworldindata.org/grapher/median-daily-per-capita-expenditure-vs-gdp-per-capita https://ourworldindata.org/grapher/median-daily-per-capita-e... for example. Although note the log-log axis which undersells the gaps between countries.
- podocarp 2mo ago
  I have no source for this but I feel like the environment thing is too frequently repeated (also without any evidence). They're pumping out solar like mad and places like the Xinjiang deserts actually have nowhere to put their excess electricity from what I've read previously. They also have a "cancel" culture pointed at the right place, in that whenever there is some exposé of some xyz it usually does get some reaction from the authorities. Even if in the end no real punishment is meted out due to corruption or politics or cover ups the very least is that the perps gave to change a hiding spot. Which is very much unlike the datacenter gas turbines running in people's backyards in the US right now. Furthermore if you take a look at the Politburo meetings and political documents etc it is clear that Xi is actively trying to solve the environmental problem. In the latest people's meeting it was also a talking point. It is a matter of "face" for them at this point. Contrast with "drill baby drill"? It is easy to talk about the "environmental" problems in China but I think it is very last decade. As a disclaimer I live in Asia and I frequently visit China but I'm not Chinese nor do I get any so called "social credits" which actually don't exist in China. The information gap between what the west thinks they know about China and what it actually is is sometimes kind of just a huge joke.
SXX 2mo ago
To be honest I do not thihk you are wrong. Not in a way AI talent is underpaid, but they unlikely need to offer $1,000,000 sign up bonuses to just create AI lab. Its still pays better than average SWE job, but not x5-x10 more like in US. Though in manufacturing China is dominating because of immense optimized supply chain, economy of scale and now workforce with know-how. I honestly cant compare with US since I'm not from US, but to produce something in EU you will have weeks or months lags on logistics of source materials and components. And some industries only exist in some countries, etc. In China in one single place you have anything you need to produce from a toaster to a car in hands reach or might be few days at most. And I guess China did the same with education. Education is a lot cheaper there so they just have more talent.
dd8601fn 2mo ago
The part that applies to AI is probably that they're (accused of) distilling SOTA models at a massive scale.

brainwad 2mo ago

A bunch of those industries are unprofitable, or profitable only due to unsustainable subsidies from their local governments.