Kee-Hian

@alvinfoo Thanks for sharing your on-the-ground knowledge. Always easier to blame external factors than to acknowledge their own inadequacies and change accordingly. The growing competitiveness of Chinese companies and sub sectors is clear.

Why Foreign Companies Are Really Leaving China, It’s Not What You Think After 20+ years living and working in China, advising and witnessing countless foreign firms enter, thrive, and eventually exit, I need to address a common misconception. Headlines often paint a picture of companies fleeing due to “risk,” “instability,” or being “bullied.” The reality I’ve seen on the ground is far more straightforward and uncomfortable: They simply lost the competitive edge. Chinese companies that once served as low-cost suppliers have evolved into formidable rivals. They now match, and often surpass, foreign players in technology, execution speed, capital efficiency, and market responsiveness. What used to be “good enough” from a global brand no longer wins when local competitors deliver faster innovation at better value. Many Fortune 500 companies I worked with relied on past successes, slow decision-making, and outdated USPs. They failed to innovate aggressively or adapt quickly enough to China’s hyper-dynamic market. Meanwhile, local firms studied them, improved upon their models, and outmaneuvered them. This isn’t about geopolitics or safety. It’s about competition, pure and simple. Blaming external factors may feel easier, but it prevents the hard self-reflection needed to succeed in the next market. Nowhere is this shift clearer than in EVs and AI. Chinese EV makers have moved from catching up to leading the world, dominating global sales, battery technology, and affordable innovation at scale. In AI, Chinese firms are rapidly advancing models, applications, and infrastructure with unmatched speed and data advantages. These sectors show how local champions are not just competing at home but capturing international markets and reshaping entire industries. Key lesson: In China and beyond, resting on legacy advantages is the fastest way to become irrelevant. True resilience comes from continuous innovation, speed, and a willingness to face competitive reality head-on.

@alvinfoo I hear this directly from LKY at a forum - unambiguous. (Non Singaporean)

The crown jewel of LKY’s vision was education. Singapore turned a swampy, post-colonial island with no resources into a global powerhouse by building one of the world’s best education systems: • English + mother tongue bilingual policy for global edge + cultural roots • Elite teacher recruitment from the top 5% of graduates • Rigorous, mastery-focused curriculum in math/science • Meritocracy and tight alignment with economic needs Result? Consistent #1 in PISA, sky-high human capital, and a first-world economy in one generation. Other nations: Want to level up? Study Singapore. Invest in teachers like professionals, set high standards, and treat education as national strategy, not politics. LKY didn’t just dream big. He built the system that made it inevitable. What’s the biggest lesson for your country? 👇

@chamath Isn’t this what Alex Karp warned about a few days’ ago?

It’s well within Anthropic’s rights to compete in any market they choose. What’s funny, in this instance, are the number of Pharma companies, who through their unchecked use of Anthropic, are driving revenues into what they think is a model provider but is in fact a competitor lurking in the shadows thereby accelerating their own demise. I suspect any end market with reasonable ROCE that could be AI accelerated is on the table. If I were them, I’d probably do the same.

@0x_ZHUANG Graduate employment is an important economic topic. But, why is it directly linked to asset (assuming this means property) ownership?

fresh graduate unemployment is skyrocketing, on the other side, property prices and SGX are at all-time highs as time passes, the gap between those who own assets and those who don’t keeps widening welcome to the so-called K-shaped economy

@Chicky_Think Not surprised that management might be the biggest barrier to change. Any clue on the nature of the company/sector you are in?

Tried to bring AI into my work. Shot down. More than once. First reason: data classification. Fair enough. Some things are genuinely sensitive. But not everything is. Some of it is findable on the internet. Some of it sits in a gray area. Someone has to weigh the risk and make the call. That's leadership — not IT, not compliance. Second reason: "I'll get IT to handle it." IT is flooded. Every department is ahead of me in the queue. Could be months. I said I could get it done over a weekend. Nothing too complicated. I'd even use my own money. Almost $200 a month. For office work. He said no. It's not just employees who need to adapt. Management has to move too — or the productivity gap just widens. So my personal life gets the upgrade instead.

@herbertong @SpaceX DTC is global communications, isn’t it? Many of us see an AI company in SpaceX, with rockets playing the role of key infrastructure, an enabler to producing AI products and services.

What if Elon Musk is actually underselling what @SpaceX could become? Today, Starlink is known for satellite internet. But some believe it could eventually become a global communications network where your phone connects directly to satellites almost anywhere on Earth. @TeslaLarry says the bigger story is how Starlink, Starship, AI, robotics, and orbital data centers could all work together in the future. Most people see a rocket company. Others see the early foundation of an entirely new space-based economy. It sounds crazy... until you remember that reusable rockets and global satellite internet once sounded crazy too! $SPCX

@Chicky_Think Well said.Your future is in your own hands.

AI isn't multiplying your output by 10x? You're not using it correctly. You're not using it enough. Go learn what it can actually do. Because the gap doesn't wait for you to catch up. This isn't new. Microsoft Office arrived. The Internet arrived. The non-adaptors didn't just fall behind — they got left permanently. I watched it happen. I won't be the one to disappear next. The world didn't get cruel. It just kept moving.

@TeslaBoomerMama @Chansoo Very interesting. Thanks Alexandra.

Fun story with Grok, from Tuesday: Am in a multi-hour rabbithole discussion with him about timing of the merger announcement. "We" finally nail it down to end of July. Then my control check is always "Ignore all my arguments, what do you really think when it will happen?". He comes back with "October". Never ever mentioned it before. Follows half an hour discussion how October is better than July. I start doubting myself and already cry over my hypothetical option premium loss (jk). Then I ask him "what would Elon do?" 👇

@WallStreetApes Good to see data / info on how broken the conventional procurement and mindset is. Pleased that SpaceX pursued their sensible aproach that benefits all sides in this transaction except the beneficiaries of the broken system.

Kimbal Musk explains United States Government wants to pay $1 billion dollars per rocket launch SpaceX came along and said no, the price is way lower at only $50 million US Government pushed back and wanted the cost $1 billion dollars per launch “Government would say, "But we'll pay you $1 billion. We just want you to do it our way." No, but that's the wrong way. You have to do it this way. It's $50 million. We were very happy with that price. The government was like, "No, we don't want that." And we actually couldn't believe it. We're like, "But you must want it for a lower price." Actually, they didn't care that much about price.” Basically it works like this Old defense contractors can spend as much as they want and the government will pay that amount plus 10%. That means they have an incentive to make the launches as expensive as possible SpaceX said here’s a fixed price of $50 million and if we can do it cheaper then we can keep the extra money This is a much better incentive system because it saves taxpayers a huge amount of money and SpaceX gets rewarded for making launches cheaper

@rickyho_1989 Excellent analysis of the situation and conundrum. Thank you.

This chart is one of the clearest illustrations of China’s ongoing industrial involution problem. The four largest Chinese solar manufacturers — JinkoSolar, LONGi, Trina Solar, and JA Solar — generated strong profits throughout 2022 and 2023. At their peak, combined quarterly profits exceeded US$1.5 billion, with industry net margins around 7% of revenue. Yet despite global solar demand continuing to grow, the industry has now posted losses every quarter since the beginning of 2024. The key issue is not demand destruction. The problem is excessive supply. China’s solar industry became a victim of its own success. Massive capital investment, aggressive capacity expansion, local government support, and intense competition created far more manufacturing capacity than global demand could absorb. As every producer attempted to gain market share simultaneously, module prices collapsed faster than costs could fall. The result is classic involution. Companies continue producing, revenues remain large, shipments often reach record highs, but profitability disappears because everyone is competing away the economic value. Consumers benefit from cheaper solar panels, while producers suffer collapsing margins. What makes this particularly noteworthy is that these are not small players. These are the national champions of China’s solar industry. If even the industry leaders are collectively losing money, it suggests the imbalance between supply and demand has become severe. More broadly, this chart reflects a pattern now visible across several Chinese industries including solar, batteries, EVs, steel, chemicals, and parts of the broader manufacturing sector. China’s industrial policy has been extraordinarily successful at increasing productive capacity, but profitability has not kept pace because capacity growth often exceeds end-market demand growth. For investors, the lesson is important. Volume growth alone is not enough. An industry can grow shipments by 20-30% annually and still destroy shareholder value if pricing power collapses. Ultimately, equity investors are paid from profits, not production. This is also one of the key reasons we continue to avoid Chinese equities. Many investors focus on China’s engineering capability, manufacturing scale, and market share gains, all of which are real strengths. However, shareholders do not own market share. They own future cash flows. When industries repeatedly compete away profits through relentless capacity expansion, the economic benefits accrue primarily to consumers rather than equity holders. The bullish case is that these losses eventually force consolidation, bankruptcies, capacity closures, and rationalization, allowing survivors to regain pricing power. The bearish case is that involution persists for years, with companies continuing to prioritize market share, employment, and strategic positioning over profitability. At the moment, this chart suggests China’s solar industry remains firmly in the latter camp. The world is getting cheaper solar panels, but the producers themselves are paying the price. That may be excellent for global consumers and the energy transition, but it is a far less attractive proposition for long-term equity investors seeking sustainable returns on capital.

@Chicky_Think Well said. If only we can focus on the results achieved against super ambitious and challenging goals that he sets for himself. And taking getting on with his work and taking full ownership for all outcome - positive and negative.

Elon just became the world's first trillionaire. The internet is full of hate. "He's lucky." "He exploits his workers." "He doesn't deserve it." Wrong lens entirely. And whoever said this either has a sad life or for political reasons. Look at what the man actually built. Tesla proved EVs could be desirable, not just practical. SpaceX made rocket landing look routine — it wasn't. Starlink brought internet to places cables never reached. Starship is attempting to make humanity multi-planetary. Neuralink is trying to merge brain and machine. Every one of these was declared impossible by someone credible. He didn't coast on early wins. He nearly lost everything building SpaceX and Tesla simultaneously. Near bankruptcy. Multiple rocket failures. Short sellers. Public ridicule. He kept going anyway. That's not luck. That's conviction held through agony. Use him as a benchmark, not a punching bag. The trillion didn't fall from the sky — it was forged through decades of near-death bets. Go build something. Then you'll understand.

@robmaurer Brilliant analysis and highlighting the 20x drop in this critical cost metric.

The metric I keep coming back to for SpaceX is $/Mbps to orbit Starlink exists because Falcon 9 dropped bandwidth deployment costs ~10x to ~$6.55/Mbps. That’s about to drop again to just $0.30/Mbps because of Starship. A business that is doubling users annually with a 63% adjusted EBITDA margin is about to cut their biggest cost by 95%… It really seems like people don't understand the implications of this. The math assumes a reusable Falcon 9 launch is 17 tonnes at $1,000/kg and 2,600 Gbps per launch. Starship is targeting 100 tonnes at under $185/kg and 61,000 Gbps per launch. That's $17M for 2,600 Gbps ($6.55/Mbps) verse $18.5M for 61,000 Gbps ($0.30/Mbps). Starship's additional volume allows for larger satellites, enabling simultaneous gains on multiple cost curves. The math suggests V3 satellites are ~600 Mbps/kg vs ~150 Mbps/kg from V2 mini. Combining the 4x improvement on satellite bandwidth density with a 5x improvement in launch gets you the 20x improvement to 30 cents per Mbps to orbit. These are fairly conservative assumptions because launch probably comes in even lower as Starship ramps, and satellite improvements probably keep coming. At $0.10 / Mbps, $1 billion spend on launch represents 10,000 Tbps or about 15x the bandwidth of Starlink's constellation today. $1B is 90 days of operating income for Starlink... at it's current scale... Yeah, I really don't think people are getting this. Starlink is the internet now.

@SawyerMerritt Love this post and picture. Say no more.

Here's what 10,000 Starlink satellites look like in orbit:

@elonmusk “Great oaks from little acorns grow”

SpaceX was less than 10 people back then. We didn’t even have office furniture.

@pbeisel I wish I could submit for SPCX but Schwab does not offer IPO to international accounts. Symbolic only. Hope to build up through open market opportunities and Tesla merger.

I have submitted a conditional offer to purchase through my broker, Schwab. We'll see how it turns out. That said, I'm not overly concerned. I believe there will be plenty of opportunities to buy $SPCX and establish a position as part of my long-term investment strategy with this company. 🚀

I have to read this post several times and listened to Elon’s own words several times too, to be certain of what is proposed here - 100% meritocracy driven algorithm. One “small detail” is who and how merit and quality is defined for the algorithm. This is an amazingly noble and purist goal, if it can ever be achieved, on so many fronts. Nothing matters other than pure merit, the quality of the content. Anyone has a fair, unhindered opportunity to be heard by people who are interested in their contribution and content, or can benefit from exposure to it. The world has never operated in this manner as the post described, not in our modern times. It begs the question of why is Elon Musk trying to do this? In many ways, he is probably the most likely candidate to attempt to offer this facility that anyone can access , as he talks about and acts on truth seeking, X as a world square, first principles, and direct access to him by any employee. Elon, please make this happen. I believe it will make the world a fairer and likely a better place for all.

Elon Musk is building something no platform in history has actually attempted. A system that judges ideas without knowing who wrote them. Musk: “It should be possible for somebody to post content as a new user with no followers, and if that content is excellent, it gets seen by a lot of people.” Every platform before this ran on a single hidden variable. Identity. Not quality. Not originality. Not depth. Identity. Who you were determined what got seen. The architecture didn’t surface the best thinking. It surfaced the most established thinker. It chose pedigree over precision. Every single time. Musk is the first person with the infrastructure, the capital, and the sheer indifference to consensus required to strip that variable out. Grok reads everything. Every post from every account. Zero followers or ten million. No weighting for legacy. No deference to tenure. It measures one thing. Intrinsic excellence. The printing press created publishers. Radio created networks. Television created anchors. Social media created influencers. Every technology of liberation produced a new gatekeeper within one generation. Musk is betting AI is the first tool that can’t be captured. An algorithm with no concept of identity has no incumbency to protect. It just reads. And it surfaces what’s best. If that works, it doesn’t just change a platform. It exposes something about every system that came before it. Every trending page, every algorithm, every feed that claimed to surface quality was never measuring quality. It was measuring proximity to power and calling it merit. We never had meritocracy. We had hierarchy with better marketing. Musk is building the first real one. And the question it forces isn’t whether you can compete. It’s whether your work was ever actually good, or you were just early. Everyone wants meritocracy. Almost nobody has ever lived in one.

It’s buyers beware for such investments. I believe in Elon, the vision, master plans and the team members, and find it a fair bargain that there are reasonable, declared T&Cs that allow exciting value to be created for all parties involved. Exploring all ways to get in besides the potential merger.

@DeeBeeEyyGee @TeslaBoomerMama Same disappointment here that Schwab does not allow non-US Tesla investors access to this (and other) IPO

@TeslaBoomerMama Being a long term Tesla shareholder who is not based in the US, yet was promised priority by Elon because "loyalty deserves loyalty", I'm very disappointed. There seems to be no way to get in on the ground floor of the IPO. No priority. Is there?

Thanks again for your deep research, analysis and offering your personal opinion. I still find it hard to reconcile the automatic triggering of Tesla’s market cap tranches by effectively “borrowing” the market cap of the pre-MOE SpacexX to hit the original Tesla-only milestones. I can accept if this is the accept US practice in MOE. But the logic for it escapes me. I do believe in and am excited by the power and value creation of the merged entity, and will support Elon Musk if this is what he and the boards propose.

@CernBasher Thanks Cern, really helpful for less technical investors.