China's AI industry has changed a lot since DeepSeek released its cheap frontier model last year, and briefly sent US tech stocks falling. After being locked out of the most advanced chips, Chinese companies are now allowed to buy some Nvidia H200s. In fact, many of the big Chinese tech companies — like Baidu — are making a push to become full-stack players, with their own chips, models, and cloud infrastructure. Today's guest is Grace Shao, an independent AI researcher and the author of the AI Proem Substack. She's a bit of an insider when it comes to China's AI industry, and when we were in Hong Kong we spoke with her about the latest in open-source models, the competition among Chinese frontier labs, DeepSeek's place in an increasingly crowded Chinese AI market, China's manufacturing edge, where bottlenecks exist right now (spoiler: it isn't data centers), if Chinese grandmas are actually using OpenClaw, and finally, of course, AI psychosis.

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