Could China Crash The Entire AI Trade?
LIVESTREAM/PROPIETARY REPORT
The first section of today’s live stream broke down whether China could crash the entire AI trade and where the real fault line sits.
Main takeaways from the free section:
The real question is not who wins AI but whether the price of intelligence falls faster than the most crowded trade in history can adjust, since roughly half the S&P 500 is now an AI trade funded on borrowed money.
China is running the Amazon playbook on intelligence, with models one generation behind on quality but priced 10 to 100 times cheaper, subsidized by the state so they never need the API margins the US labs depend on to fund the next model.
Gating cuts the wrong way. When the US suspended its strongest model on June 12, a Chinese lab open sourced a near frontier rival the next day, and you cannot export control weights that are already everywhere.
The two sides hold opposite constraints. The US has the chips but a tight power grid, while China has an eight times electricity advantage but only about 4% of NVIDIA’s compute, so intelligence is becoming an energy business.
The market reprices on beliefs about the cost curve, not on Chinese revenue. DeepSeek in January 2025 was the dress rehearsal that erased $589 billion from one stock in a day, and the same loop can run again with far more premium priced in.
You can find the free recording on the China AI Playbook here in the YouTube video:
The member section connects this framework to the live regime and positioning, with the recording linked at the bottom of this report.
Macro Decks From today’s stream:
Monday’s Livestream: The AI Compute Playbook:
The livestream for Monday (no stream tomorrow, markets are closed) will break down the underlying risks building in the AI trade and how the compute market actually works. We will lay out a full playbook of the resources and signals you want to watch to develop an edge.
Paid subscribers can join the livestream with this link (the first half will be free and streamed to Twitter and YouTube, where the second half will only be available on Substack for paid subscribers):
Proprietary Report On China and The AI Trade
In the member section, we took the China and AI framework into the live regime and connected it to positioning across rates, equities, the Mag seven, and the carry trade.
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