r/baba
Everything ends in price war in China
User shares an article about DeepSeek's 75% price cut, highlighting the inevitable price wars in China's AI and tech sectors.
- China's tech and AI sectors are trapped in destructive price wars.
- Aggressive price cuts by competitors like DeepSeek will pressure profit margins for major cloud providers.
https://www.scmp.com/tech/tech-trends/article/3354668/deepseek-v4-pro-tops-global-bang-buck-ranking-after-75-price-cut?
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more accessible ai adoption means more cloud customers.
Could be the top of the AI cloud, spreading from all of Asia, of course; to the rest of the world also put a man on Mars and Xi will put the fear in 1.4 billing people & in the rest of the world that he’s gonna do crackdowns. By some miracle, he might step down before all this happens.
Blame Xi, blame CCP, blame Jos Tsai, blame Jack ma, but never blame ownself.
If no conviction, easier to just sell and rotate. Many companies out there are selling down right now.
US Softwares are selling down for the past few month, in China, companies like Tencent, BYD , xiaomi also selling down.
Rather than come online and blame the whole world, just go back to relook at your thesis. If you don’t like the fundamental, then exit ASAP rather than whine.
If you do not listen to the other side of the argument and constantly challenge your thesis, how can u be sure u are not in a trap of confirmation bias maybe just wrong?
One should always do their due diligence and update their thesis based on new info.
If don’t like what is happening macro or micro, then just sell. We are not married to the stock.
Many people here just come and whine, and have been doing so for the past many years. Rather than blaming everyone else, why not just blame oneself for not doing enough research. Not like the political risk and execution risk is a recent phenomenon.
That’s my point. I’m not directly targeting at your post.
Have you thought of Baba As selling picks and shovels?
They are selling chips, compute and Tokens to the crowd!
Isnt it ironic that shareholders here lose money in the long run, not because of xixipee dictatorship. The true cost to us has been the relentless price wars and cut throat competition - levels that are unseen in the capitalistic west and the kind that would have made Adam Smith cream in his pants.
We've seen it in E commerce, losing market share to PDD and Tiktok. Seen it in food delivery. Seen it in the EV market. And now seeing in AI. The only hope to the china AI market is that through price cuts, while painful locally, the makes gains for all players through eating the global market share.
It wasn't like this but Xi's crackdown resulted in all this. And his dumb ass decisions to handle covid pandemic that has resulted in unending deflationary pressures and extreme youth unemployment rate.
But how are the price wars linked to deflation and youth unemployment? The intention from some of these were warlike and to gain market share, not really because of spending concerns. In fact the price wars are causing deflation to worsen resulting in xixipee to step in
Xi started 💩
LLMs are all commoditized at this point. Low switching costs to the consumer and an unwillingness to pay for the product. Only way alibaba works is if its is able to monetize in other areas of its ecosystem that are truly value add. I.e cloud, payments, e commerce.
Cloud is commoditized. Payments is commoditized. E-commerce is commoditized. All in China.
I guess the margins will tell us whether or not this is true. I think it’s quite unclear but by no means is it a given that alibaba will be a winner.
Alibaba is a winner because of cloud and T-Head
Having your own chips is 80% Gross margins save and not going to somewhere else