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Caught My Eye…
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In his first week back in office, President Trump issued a series of executive orders aimed at rapidly implementing his agenda. His most significant actions focused on immigration and border security, declaring a national emergency at the U.S.-Mexico border to authorize military deployment and resume wall construction, while suspending the refugee program and designating certain international cartels as terrorist organizations. On climate policy, Trump withdrew the U.S. from the Paris Agreement and expanded areas for oil extraction, reversing Biden-era environmental protections. For federal workforce management, he mandated full-time in-person work, implemented hiring freezes, and streamlined the process for terminating employees. The orders also included major shifts in domestic policy, with directives to address the cost-of-living crisis and restore freedom of speech, while dismantling diversity initiatives in federal agencies. In foreign policy, Trump suspended foreign aid programs for 90 days and announced plans for new tariffs effective February 2025. These executive actions, which included the revocation of approximately 80 Biden administration policies, signal Trump’s determination to implement his “America First” agenda.
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In December 2024, DeepSeek released its V3 model with 671 billion parameters, trained for just $5.58 million—a fraction of what other major AI labs typically spend. This model, created by AI researchers in China, matched industry leaders like GPT-4 and Claude 3.5 Sonnet in benchmarks while being fully open source. Following this, a few days ago, DeepSeek released DeepSeek-R1, a reasoning model that achieved strong results on mathematical and logical tasks, and the DeepSeek app is now the most-downloaded free app in the U.S. on Apple’s App Store. DeepSeek demonstrates that high-performing AI models can be built with fewer resources than previously thought necessary and that China has developed advanced AI capabilities despite U.S. export controls on GPUs. As more high-quality language models become available for free, market forces will drive down prices across the industry. Moreover, a Chinese AI company releasing such a capable open-source model should be a wake-up call for America. Leadership in AI will not only determine economic primacy in this era but will also be increasingly important for military effectiveness via enhanced decision-making and autonomous systems.
(I posted some more thoughts on X yesterday. The team and I are currently putting together a follow-up AI Deep Dive that will explain the story from the transformer model in 2017 to this current moment, which will be published in a few days.)
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Chinese social media apps have engineered a uniquely addictive formula by seamlessly blending social networking, entertainment, and e-commerce. While Western platforms like Instagram and YouTube remain focused on advertising revenue, Chinese apps like TikTok, Xiaohongshu, and Lemon8 have integrated shopping directly into their social experience, creating what industry experts call “shoppertainment.” This model has proven remarkably successful – Douyin (TikTok’s Chinese counterpart) reported $2 billion in platform sales in 2023, while Xiaohongshu achieved its first net profit of $500 million. The success stems from extremely powerful algorithms that not only surface viral trends but also compel impulse purchases, making China the global leader in social commerce with nearly half of users reporting recent in-app purchases in 2024. When TikTok briefly shut down in January 2025, American users flocked to these Chinese alternatives, drawn to their hyper-targeted recommendations.
Other Reading…
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The Extra Reward for Owning Stocks Over Bonds Has Disappeared (WSJ)
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Japanese Investors Dump Eurozone Bonds at Fastest Pace in a Decade (Financial Times)
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The Short Case for Nvidia Stock (YouTube Transcript Optimizer)
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Google DeepMind CEO on the AI Tricks Up the Company’s Sleeve and ‘Light Chips’ (Semafor)
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Meta’s Free-Speech Shift Made It Clear to Advertisers: ‘Brand Safety’ Is Out of Vogue (WSJ)
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Siri Is Super Dumb and Getting Dumber (Daring Fireball)
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Leading AI Models are Now Very Good Historians (Res Obscura)
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Paul Krugman on Leaving the New York Times (Columbia Journalism Review)
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China’s Manufacturing Activity Contracts for First Time Since September (Financial Times)
On X…