China AI Cheaper than U.S. Big Tech AI Exposing AI Bubble – Americans Rise Up Against Big Tech with Flock Camera Opposition

by Brian Shilhavy
Health Impact News

The U.S. moved closer to the AI bubble bursting this week, when a relatively little-known AI company out of China released their new version of AI (Large Language Model) that rivaled, or in some cases beat, benchmarks by U.S. Big Tech companies such as OpenAI, Anthropic, and Google.

Not only is this AI model out of China less expensive since it is “open source”, they promised to start giving it away for free on July 27, 2026.

The U.S. stock market, and the tech heavy NASDAQ, all closed down on Friday as a result.

Here is some of the news coverage since Friday.

From Fortune:

Markets may have just experienced their second DeepSeek shock, this time thanks to a Chinese AI lab named after a Pink Floyd album

Excerpts:

On Thursday, Moonshot AI, a Beijing-based AI startup, unveiled the latest version of its Kimi large language model, which promises performance close to Anthropic’s Fable 5—perhaps the most powerful publicly available model today—at a fraction of the cost.

Kimi K3, the largest open-weight model ever released, performed “competitively” with Fable 5, and “substantially outperformed” Anthropic’s Opus 4.8, and OpenAI’s GPT 5.6 Sol, according to Moonshot.

The company’s officially-released benchmarks consistently rank K3 among the top three AI models; one independent benchmark from Arena.AI even put K3 as the best model currently available, ahead of Anthropic.

Many observers, including Anthropic CEO Dario Amodei, didn’t expect a Chinese AI lab to release a model that could approach the U.S.’s best offerings for another six months.

Tesla CEO Elon Musk, for example, suggested it might happen by the first quarter of next year. K3’s launch rapidly shrank that timeline and underscores just how quickly Chinese AI developers are closing the performance gap with their U.S. rivals.

From Yahoo Finance:

China’s Kimi K3 Hits US Stock Markets. Is the American AI Boom Over?

Excerpts:

China’s Moonshot released Kimi K3 on Thursday, a model it says matches Anthropic’s Claude Fable and OpenAI’s GPT-5.6. US chip stocks sank as investors asked if America’s AI lead is safe.

Kimi K3 packs 2.8 trillion parameters, making it the largest open model ever released. Moonshot, an Alibaba-backed startup, will let anyone download it free from July 27.

Chip Stocks Just Had Their Worst Week in 15 Months

The Philadelphia Semiconductor Index, which tracks America’s biggest chipmakers, fell 12.5% this week, marking its worst week in over 15 months. Nvidia, AMD, and Broadcom all fell hard.

Meanwhile, the AI bubble question is back in focus.

Markets have seen this movie before. When China’s DeepSeek stunned Wall Street in January 2025, Nvidia lost $589 billion in one day. CNBC called it the biggest single-day loss in market history.

Why Kimi K3 Has Everyone’s Attention

Kimi K3 earned the hype. This week, it topped Arena’s coding leaderboard with 1,679 points, pushing Claude Fable 5 into second place.

It is also cheap. Moonshot charges $3 per million input tokens, while Fable 5 costs $10. The model reads a million tokens at once, enough to hold an entire codebase in one prompt

Here’s a good short video (AI generated) that explains what just happened with China’s Kimi K3:

Here is some other news on the coming AI crash that was published last week.

AI Bubble Fears Are Starting to Spill Over

Investors are freaking out.

Excerpts:

Yet another domino appears to be falling as part of the Ruth Goldberg machine that will eventually pop the AI investment bubble.

Earlier this month, economic forecasters were sounding the alarm that overspending on AI was at a level far more severe than Black Tuesday, the day that jump-started the worst economic catastrophe in the history of the industrial economy. Now, investors seem to be coming to that same conclusion all on their own.

This week, Taiwanese semiconductor giant Taiwan Semiconductor Manufacturing (TSMC) posted its second-quarter earnings results, revealing a staggering revenue of over $40 billion — a record-breaking sum for the company.

While that should come as welcome news to investors, the results had the exact opposite effect, sending shares of TSMC stocks tumbling by four percent. That in turn led the tech-heavy Nasdaq 100 index to fall by 1.4 percent Thursday, compounding losses from Wednesday, Bloomberg reported.

The issue seems to be TSMC’s revision to its capital expenditure. As the key manufacturer for chip design company Nvidia — arguably one of the most pivotal players in the AI boom — TSMC is a major bellwether for investor confidence around the buzzy tech.

The trouble is that, in addition to posting record revenue, the Taiwanese chip firm raised its 2026 spending forecast to a range of $60-64 billion, up from $52-56 billion. That shift will test how much more spending investors are willing to stomach on AI, a technology that has yet to justify the nearly $1.6 trillion spent developing it over the past decade.

Full article.

Futurism has also published an article about how the richest Tech billionaires are actually rooting for the AI bubble to collapse, so that the industry can be consolidated to just a few Big Tech companies.

This reminds me about how another technology breakthrough, the mass production of automobiles in the early 1900s, led to hundreds of companies producing automobiles in the “roaring 1920s”.

But a collapse in the economy reduced them to the “Big Three”, where every other business was wiped out by the financial crash just before WW II, which is now known as “The Great Depression” in U.S. history.

The number of active automobile manufacturers dropped from 253 in 1908 to only 44 in 1929, with about 80 percent of the industry’s output accounted for by Ford, General Motors, and Chrysler, formed from Maxwell in 1925 by Walter P. Chrysler.

Most of the remaining independents were wiped out in the Great Depression, with Nash, Hudson, Studebaker, and Packard hanging on only to collapse in the post-World War II period. (Source.)

Here is the article from Futurism:

Tech Billionaires Are Quietly Rooting for AI Bubble to Collapse

“Stop trying to make bubbles go away.”

Excerpts:

Some of the wealthiest business people in the world are chopping it up about something that defies orthodoxy: the AI bubble, they hope, will soon collapse.

Gone are the days of debating whether AI is an economic bubble.

Having already fallen $800 billion short of turning a profit on the AI boom, some of the tech industry’s biggest players have accepted that the financial arithmetic on AI just doesn’t add up. But here’s the catch: though the AI bubble objectively makes life harder for the rest of us, to the silicon valley elite, the economic consequences of its downfall could actually be a good thing.

New reporting by the Atlantic details the heterodox sentiment sweeping through the tech industry. The pro-Bubble stance has its roots in a 2024 book called “Boom: Bubbles and the End of Stagnation,” by tech investors Tobias Huber and Byrne Hobart.

These fellas argued that there are essentially two kinds of economic bubble: the good ones, like the Dot Com bubble, and the bad ones, like the 2008 subprime lending crisis.

Though both do significant economic damage when they burst, Huber and Hobart argue that bursting the good bubbles nonetheless helps accelerate technological progress in capitalist economies. With bubbles, Hobart told the Atlantic, a “set of investments that you could never underwrite otherwise suddenly makes sense.”

That attitude has helped tech executives and their investors rationalize away one of the most irrational concentrations of finance capital the US has seen in decades. “Stop trying to make bubbles go away,” as the venture capitalist James Thomason wrote last year. “Yes, bubbles create volatility. Yes, investors lose money. Yes, employees lose jobs when companies fail. But the alternative is underinvestment in transformative opportunities.”

Some of the biggest names in tech have signaled support. Last October, Amazon founder and CEO Jeff Bezos explained that bubbles “can even be good, because when the dust settles and you see who are the winners, societies benefits from those inventions.”

OpenAI CEO Sam Altman has likewise argued that AI will a “huge net win for the economy” no matter what, even if a “phenomenal amount of money” ends up in the blender.

Of course, if the whole thing does come tumbling down, it‘s not the tech billionaires who will suffer. Some will go bankrupt, sure, but that just means less competition for market dominance. Each sees themselves as too big to fail — so when the bubble does burst, you can expect plenty of drama.

Americans Start to Rise Up Against Big Tech by Opposing Flock Cameras

Big Tech is not invincible. As I have been saying for years, just stop using their products!

But I don’t think most Americans are ready to ditch their cell phones yet, which is really all it would take to cripple the entire system.

Here are two videos explaining public outrage against Flock Cameras. One explains what they are and their dangers, and the second one is by an attorney explaining the public reactions so far.

Comment on this article at HealthImpactNews.com.

This article was written by Human Superior Intelligence (HSI)

See Also:

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Published on July 19, 2026