FULL INTERVIEW: Bill Bishop Thinks China’s Military is Still Deeply Corrupt

This is our full interview with Bill Bishop, recorded live on TBPN. We discuss China’s accelerating PLA purges, what Xi Jinping is really trying to accomplish inside the military, the DJI ban, whether US regulation will stick, Taiwan arms sales and Trump’s upcoming China visit, China’s approach to AI and chips, and why Nvidia’s China sales remain such a messy geopolitical flashpoint. TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to podcast platforms immediately after. Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has recently featured Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00John Coogan?

  Without further ado, we have Bill Bishop, who runs Sinusism. Welcome to the show, Bill. Good to see you again. Welcome back.

• 0:07Bill Bishop?

  Hey, thanks for having me back. It's great to see you.

• 0:09John Coogan?

  Happy New Year. How's your New Year going?

• 0:11Bill Bishop?

  Uh, it's going pretty well, although it feels like we're in the, near the North Pole here in DC. We've been iced in for two weeks. It's pretty nuts.

• 0:19John Coogan?

  Well, describe iced in. Are you actually, you can't go outside?

• 0:23Bill Bishop?

  Uh, no, I

• 0:24John Coogan?

  Okay.

• 0:24Bill Bishop?

  Got everything dug out, but literally at one point, the, uh, the guys digging out my driveway were taking selfies with the blocks of ice they could pick up.

• 0:31John Coogan?

  It was so big.

• 0:33Bill Bishop?

  It was so big.

• 0:33Jordi Hays?

  It was frozen solid.

• 0:34John Coogan?

  Wow.

• 0:35Bill Bishop?

  And it still is.

• 0:36Jordi Hays?

  That's insane.

• 0:37John Coogan?

  Do you watch the Super Bowl?

• 0:38Bill Bishop?

  Of course, and congrats on your ad. That was awesome.

• 0:41John Coogan?

  Thank you, yes.

• 0:41Bill Bishop?

  The earned media was, I don't know what your ROI, like the, the multiples on your 50K, whatever you spent, but that was, what a brilliant hack. Congratulations to you guys.

• 0:49John Coogan?

  Yeah, thank you, thank you. Anything else?

• 0:51Bill Bishop?

  The game kinda sucked, but you know, other than that.

• 0:54John Coogan?

  Yeah, it was, uh, it was not, uh, not the most exciting. Just a lot of field goals in the first half.

• 0:58Jordi Hays?

  Yeah, we, we unfortunately left like three minutes into the fourth quarter because it just, we knew it was gonna be insane chaos getting out. And then it just got really, it got, it got, uh,

• 1:09Bill Bishop?

  A little, a little exciting.

• 1:10John Coogan?

  Yeah.

• 1:11Bill Bishop?

  So I have a question, but was that an interception or a fumble?

• 1:15John Coogan?

  Oh, I don't know. You're asking the wrong people.

• 1:17Jordi Hays?

  You're asking the wrong people. When, when did that happen in the game?

• 1:21Bill Bishop?

  Uh, that was their last touchdown, right?

• 1:22Jordi Hays?

  Oh, okay. So we had, we had, yeah, we had, we had, we had left.

• 1:25Bill Bishop?

  Okay.

• 1:26Jordi Hays?

  We had left. We had to, we had to get to the airport.

• 1:28John Coogan?

  Uh,

• 1:29Jordi Hays?

  And to be honest, it was, it was tough to follow because we went with, with a bunch, with, with the Ramp team and a bunch of our friends. And so there was just

• 1:36John Coogan?

  There were a lot of interesting conversations to have with folks. And so there's a lot of opportunity just to like get lost in conversation and then turn around and no, they scored.

• 1:43Jordi Hays?

  Yeah.

• 1:44John Coogan?

  Anyway.

• 1:45Jordi Hays?

  Any, any of the ads stand out to you?

• 1:48Bill Bishop?

  Uh, the robot vodka ad that you guys talked about a little while ago, which was pretty awful, but you know, China's got the, the Lunar New Year's coming up next week and, and Lunar New Year's Eve, the CCTV does this big guest Spring Festival Gala with, you know, hundreds of millions of people watch. It's gonna be full of robots. So I'm very curious to see how they spin the robot performances.

• 2:09John Coogan?

  Yeah.

• 2:10Jordi Hays?

  I mean, I think they're gonna

• 2:11Bill Bishop?

  Drinking vodka through the neck.

• 2:13John Coogan?

  Yeah, that was very, very weird.

• 2:15Jordi Hays?

  Yeah, associating your, your, uh, your alcohol, which kind of like tastes like engine lubricant with, with like heavy machinery is an interesting decision.

• 2:25Jordi Hays?

  I expect the the the robots to perform incredibly well, just based on some of the demos we've seen, where these things are flipping around, they're moving like, you know, actual like fighters or dancers, it's incredibly impressive and, you know, still worried that we're gonna let them sell, you know, 10 million of those in before we kind of wake up, but.

• 2:44John Coogan?

  Have you been following the DJI story?

• 2:47Bill Bishop?

  Which part of it?

• 2:48John Coogan?

  Just the band and like how fast it's rolled out, if there's any loopholes, because you always hear the headlines like, you know, Nvidia, the chips banned, like there are zero Nvidia chips are going to China, and then it's like, oh, well, there's diversion, there's cutouts, there's Nerf chips that wound up, you could train DeepSeek, you could do a lot, and then the trade deal gets renegotiated, and so I'm just wondering, like, there were a couple founders who were sort of taking victory laps in the drone, American drone community, and I'm rooting for them, I'd love an American DJI, GoPro famously failed at this, mostly because of the supply chain pricing, all of that, but it's always like, I see people take victory laps, and I'm wondering, it feels maybe a little bit like, will the

• 3:31John Coogan?

  new regulations stick, how all encompassing is the regulation?

• 3:36Bill Bishop?

  I think it's a bit premature, and I think you've seen already bits of it whittled away, where now you can buy previous models and parts for it, and so, the problem, I think, really, is that DJI makes the best drones, both in terms of performance as well as cost, and so, unless the American firms can actually make drones that, like law enforcement wants, or, you know, various companies want, you know, I mean, it is, it's an unfortunate situation, I certainly hope the American drone makers can catch up, but it, and maybe this regulation will help, but, you know, we have to be competitive, right?

• 4:12John Coogan?

  Yeah, yeah, I mean, it also just seemed like DJI, I mean, yeah, there were a ton of like, commercial applications, but it was just such a go-to Christmas present for, you know, a lot of people, like, you know, the casual outdoor person that goes on hikes, they want to take cinematic video, like, realistically, it's gonna be collecting dust in three months, but it's gonna be an epic present on Christmas, and so, I mean, that probably propelled a lot of sales and just helps get to scale, and that's important in these manufactured products, right?

• 4:39Bill Bishop?

  Uh-huh, and again, as we all, you know, you've talked about ad nauseam with lots of people, I mean, China has a supply chain for this stuff, and we still don't, and so, whether or not these regulations will pull that supply chain creation here, it remains to be seen, the challenge, of course, is, you have to balance... Cutting off access to products that customers actually not just want but need, like police departments, etc. But then, at the same time, just making it so that some companies can, to take advantage of loopholes, have some sales, but still kind of wash their components through third countries that actually still are probably Chinese components.

• 5:16John Coogan?

  Yeah, no, no, I mean, the supply chain, I remember digging into the small drone motor market, so the motors that go on those drones, the small motors, and there are truly no American companies. There's one company in, I think, Seattle that sold to private equity and they immediately offshored all of the manufacturing, and it's just like this holdco now. And I think that now they're starting to bring some stuff back, so there's like green shoots, but these things take years and years and years. Just look at like TSMC in Arizona, so it took years, maybe a decade, to get actual to scale from like their initial plans. Anyway, let's dive into the PLA purges. We read through the Wall Street Journal's coverage, and I have a bunch of questions,

• 6:00John Coogan?

  but how are you framing it? How are you thinking about what's happening in China today?

• 6:06Bill Bishop?

  So, the PLA purges have been ongoing for quite some time. They've accelerated over really the last 18 months or so. I mean, they are part of a multi-year process of Xi Jinping, both starting out, you know, taking control of the PLA, but then also forcing through a whole series of reforms around structure, force structure, operations, to try and get the PLA to what they call a world-class fighting force, with a specific goal for 2027, the centenary goals, which are the, it's the 100th anniversary of the founding of the People's Liberation Army, where they want to be, you know, some people say they want to be able to invade Taiwan, haven't explicitly said that, but it's to get a force to the point where it could actually undertake missions like that.

• 6:51Bill Bishop?

  And the latest round where the PLA has a Top structure, it's called the Central Military Commission and it's got a chairman who's Xi Jinping and then two vice chairman and four members, so seven members. There are now two members, Xi and a vice chairman, because he's purged the rest over the last year or so. And just for a couple of weeks ago, they purged the remaining, the one Central Military Commission vice chairman and one member. And it was quite shocking, both because there have been rumors popped up and then three or four days later, they were gone. But also, the vice chairman who was purged was someone who was considered to be close to Xi, who Xi had kept on past the assumed retirement age, because he was supposed to

• 7:36Bill Bishop?

  be sort of Xi's guy. And so, it's pretty shocking, on the one hand. On the other hand, it's kind of a continuation of what's been happening. We don't know why. There's lots of speculation. The Wall Street Journal article you referred to, I think, talked about possibly a briefing internally that said that this vice chairman, Jiang Xia, was leaking nuclear secrets to the US. Wish it were true. Haven't found anyone in DC who actually thinks it is.

• 8:02John Coogan?

  We got it.

• 8:03Bill Bishop?

  Would be impressive, right? If you had that level of a spy. But what I think it points to is, and then the question is how you interpret what's going on. There are lots of people who are trying to sort of put out versions of what happened. You know, there was rumors that there was a gunfight. Total BS, as far as I understand, but it's a black box, so you can't say zero.

• 8:23John Coogan?

  So, before we go into the implications and the interpretations, can you break down anatomy of a purge, history of purging? It feels like a uniquely Chinese, just, event. Like, we, you know, like, when we elect a new president, a bunch of positions turn over, a new head of the FDA comes in or whatever, and we don't think of that transition as purging, although, of course, some people get fired midterm, even if they've been appointed by the president. And so, what's actually going on? Are these like forced resignations? Are these purges? Or are these firings?

• 8:57Bill Bishop?

  No, no, they're, they are detained for investigation.

• 9:00John Coogan?

  Okay, so it's alleged criminality.

• 9:03Bill Bishop?

  Or alleged criminality or alleged violation of of party or or military rules in this case. And then they are and all we got, you know, all we all we got was a very terse statement from a very nervous looking Ministry of Defence spokesperson announcing that these two individuals, Zhang Yousha and Liu Junli, had been put under investigation. That was it.

• 9:23Jordi Hays?

  And so she has not come on the record. She has not come on the record about any of this.

• 9:29Bill Bishop?

  Uh, not publicly. There there have been authoritative statements in like the PLA Daily, which is the military's newspaper, but she has not yet said anything publicly. And there may be at some point, there'll be, he probably has talked about it internally. Well, at some point, maybe we'll get a publication of some of his speeches. But we have very, very little information that's public about what's actually going on, other than that these two have been taken away for investigation. And so far, they have not been replaced on this body.

• 9:59John Coogan?

  Mm hmm. And then one way you could potentially read into this is that you're consolidating power, which makes it easier to perform military operations. The other is that you lost all your top guys who were going to help you with military operations. What's your interpretation?

• 10:16Bill Bishop?

  So it's a good question, and I think it kind of is both. There's clearly the number of generals and senior officers who've been taken out over the last two plus years is quite shocking. It's in the dozens. And so it it's hard to imagine in the short term, it doesn't have some impact on the military's ability to fight. But at the same time, there are a lot of officers and a lot of, you know, younger up and coming officers in the PLA. You know, the PLA has historically been an incredibly corrupt organization, and Xi Jinping has been, you know, he started, he really kicked off this anti-corruption campaign in the PLA in 2014 in in sort of full force.

• 11:01Bill Bishop?

  And so what may be happening is that he has realized that he just has to effectively decapitate one or two generations of the PLA to get down to a group of younger officers who were promoted not by buying their positions, as was very common through.

• 11:19Bill Bishop?

  Up until even I think into the she era.

• 11:21Jordi Hays?

  How did those get, how did those get priced? Obviously under the table very corrupt.

• 11:25Bill Bishop?

  So you guys, your, your audience may find this interesting. It's kind of like an angel investment, at least in some cases, where actually people would collectively buy a stake in a rising officer. Because, I'm not joking, right?

• 11:37Jordi Hays?

  No way.

• 11:38Bill Bishop?

  And then, and then.

• 11:39Jordi Hays?

  So they'd go, they'd go, basically they'd go out and say, like, the officer would be like, hey, I've got some potential within the organization. I think I can get this job. Let me pool together some capital. And then they pool together that capital. And then they owe you favors. They pay off the person or someone to get the role. And then there would be a revenue stream back to the original pool of capital.

• 12:00Bill Bishop?

  Yeah, the idea is you're, you're buying an option on a future revenue of, of corrupt goodies, right? I mean, I'm not, it's actually, it's a real thing.

• 12:06Jordi Hays?

  Because, because if said person gets the job, they'll be able to generate a bunch of revenue, not just with their salary, but through like corrupt activities.

• 12:14Bill Bishop?

  Yeah. They have, they can create a whole bunch of opportunities for people who are close to them.

• 12:18Jordi Hays?

  Wow.

• 12:19Bill Bishop?

  And you saw this.

• 12:19Jordi Hays?

  So they, he basically gets a certain job. He's got access and control over some amount of budget and creates basically a little economy around, around, uh, within the stack. That is insane.

• 12:30Bill Bishop?

  And, and, and this was, um, and there are, there's been certainly, I don't think it's been in the media, but I'd certainly heard that among the, uh, funders of some of these, uh, officers in years past was our America CIA. Because it was a great way to.

• 12:42Jordi Hays?

  Whoa.

• 12:43Bill Bishop?

  Push people in and, and, and, you know, eventually they, they owe you, right? And so, I mean, it's actually, it's actually.

• 12:48Jordi Hays?

  Friends and family round from the CIA.

• 12:50John Coogan?

  Yep.

• 12:51Bill Bishop?

  And, and this is something, without going into detail, the party has talked about, about, you know, getting rid of this process of buying and selling promotions. And you saw from some of the previous cases of generals who were, who were, um, detained early on in the she era. I mean, the stories of like, you know, the, the cars full of gold and the, you know, these suitcases of, of millions of dollars and euros worth of cash hidden in one of their villas. I mean, it's, it's, the level of corruption was insane because there's so much money being thrown into military, you know, the military buildup.

• 13:21John Coogan?

  Mm-hmm. Interesting.

• 13:23Jordi Hays?

  Crazy.

• 13:23John Coogan?

  What's the state of?

• 13:25Jordi Hays?

  And so, and so part of that, if you have decades of corruption that have been like, uh, that has been intimately intertwined with the military buildup, maybe doesn't give you that much confidence in a lot of the actual fighting force and the equipment, right? Because it maybe, it wasn't going necessarily to the, to the best vendor. It was going to the vendor that was pushing enough money out the back door.

• 13:47Bill Bishop?

  I mean, that is certainly the risk and potentially the concern. I mean, you look at, in addition to all these generals, they've basically taken out a significant chunk of the leadership of the military industrial complex. All sorts of defense contractor, defense, you know, weapons makers, heads of research institutes that were involved in weapons development. At the same time, the weapons look like they work. I mean, the thing about China and corruption is, you know, China has this great high-speed rail system, right? Well, the guy who really oversaw it is in jail because he was corrupt. So, but, but the thing is, is the corruption is just sort of like it's another tax. It still works.

• 14:20John Coogan?

  It still works.

• 14:21Bill Bishop?

  Right? Unlike maybe other countries, you still get it done. It still works pretty well. But some folks, you know, but then you make a little money on the side.

• 14:28John Coogan?

  Wow. That's funny.

• 14:29Jordi Hays?

  He's like, I actually gotta make the trains run so I can keep the gravy train going.

• 14:34John Coogan?

  Yeah, exactly. The gravy train is important. A lot of, lots of lessons there. What's the state of communications or relationships between Donald Trump and Xi Jinping? Are they talking regularly? Are they meeting in person? Are we at like a local top or local bottom? Are things the worst they've ever been? Somewhere in between?

• 14:57Bill Bishop?

  No, no, we, we seem like we're in a steady state. They had a call last week, which, you know, again, I think is an indication that so far at least, things are on track for, for President Trump's visit to China in early April. There was one sort of wrinkle, though, in the readout from the Chinese side of the, of the call he had with, with Donald Trump last week. He was, had some pretty stark language around Taiwan and specifically around US arms sales to Taiwan, because the US sold 11, you know, announced an $11 billion arms sales package to Taiwan back in December, which was, at the time, it's a very large number. The US has sort of been doing billion or so kind of packages and rolling them out.

• 15:38Bill Bishop?

  The Chinese get pissed off, but, you know, they move on. 11 billion was pretty significant. I had heard that the reason the Xi Jinping had mentioned sort of being prudent around arms sales to Taiwan last week was specifically because the US was working on a big arms package. The Chinese had found out about it. The Chinese ambassador here in DC had basically gone to the White House and thrown a fit. Over the weekend, you know, we, we saw, I think on Friday, the Financial Times reported, yes, there's a $20 billion package in the works. And it's something the Chinese don't want to have happen, and they have threatened to postpone or cancel Trump's visit and I think I think they might actually meet it. And so I would imagine that the Trump administration won't push forward that sale until after the meeting.

• 16:21Bill Bishop?

  What's interesting, though, again, is it's not clear Trump knew about it. This is people in the administration who maybe are more interested, who are sort of more pro-Taiwan, not happy with this kind of, whether you, I don't want to call it détente, it's a little too early for that, but this sort of steady state in the relationship over the last couple of months, and they want to make sure that Taiwan is still getting attention.

• 16:42John Coogan?

  Yeah, um, yeah, it's fascinating. How does China frame the Taiwan question internally? In the West, we sort of all accept the premise that if we're doing an aid package, it's for defense and that the only possible scenario is that China would invade at some future date. But does China use rhetoric that's like, well, we don't want Taiwan to have weapons because we're worried about them invading us? Is that even something that they toy with? Or are they saying like, we don't want them to have weapons because we're planning to do this at some point?

• 17:17Bill Bishop?

  Well, no, I don't think they're worried about Taiwan invading. I think it's more, you know, Taiwan is the first of their red lines, especially in the US-China relationship. And so they, but ultimately, they, you know, they don't want, I mean, the US saying, we're going to sell you a bunch of weapons, even if right now, for example, Taiwan, because of the political, what's going on in Taiwan politics, you know, the Taiwan legislature won't approve the budget to buy the last package of weapons because it's, the opposition party controls, with a coalition party controls the legislature. So this $20 million package.

• 17:54Jordi Hays?

  And should we assume that CCP operatives have effectively infiltrated the opposition party? Or is that too much of a tinfoil hat? Because I imagine that if you were, it would be worth the time to try to get your team elected.

• 18:11Bill Bishop?

  Good seed investment.

• 18:13Jordi Hays?

  Yeah, good seed. Put it in venture terms.

• 18:15Bill Bishop?

  There are no questions, a lot of influence efforts. The Taiwan government under the current president, Li Ching-tai, has definitely stepped up and talked more about this kind of, these kinds of infiltrations and influence. I don't think there should be any surprise that that is going on. But ultimately, for these arms packages, it's also a signal of, I think the US is trying to make it a signal of we still support Taiwan. So that, because what Beijing wants ultimately is for the Taiwanese people to think that there's nothing, you know, there's no help coming, they have no other choice, but, you know, effectively resistance is futile.

• 18:52Jordi Hays?

  Roll over.

• 18:53Bill Bishop?

  Right? Roll over. And the faster you roll over, the better you'll be treated, is I think the kind of the constant messaging they're trying to put out there. And so, support from the US in the terms of either rhetorical or big arms packages, messes up that messaging. The comments from the Japanese prime minister and back in November mess up that messaging. And then they also complicate the PRC's planning in the event that there is some sort of scenario where they have to use some sort of force. It's going to be a lot harder if the Taiwanese have better weapons, better training, and have support from, you know, the US and potentially Japan has to get involved.

• 19:27Jordi Hays?

  What economic indicators are you tracking in China broadly? Things like unemployment rate, foreclosures, general, you know, development, infrastructure development, housing development, all that stuff?

• 19:43Bill Bishop?

  So, I mean, all those are worth tracking, you know, you have to sort of filter through the data. I think the consensus of a lot of the folks who really track this closely is that generally, like, the economy's not doing great, but it's also not falling off a cliff, right? It's, you know, it's not the binary, like, boom, boom or bust. The things to really watch over the next, I mean, we'll learn a lot more by the middle of March because the first week of March starts what's called the two sessions, and the one that matters is this national. People's Congress, their legislature. And so we'll get a work report from the premier that will then lay out targets for this coming year in terms of things like GDP growth and etc. But then also, this is the year where they roll out the 15th five-year plan.

• 20:26Bill Bishop?

  And that also includes not only high-level goals, but also some targets in certain sectors. And so those ultimately, I think, are more useful to look for the next few months than some of the sort of high-frequency data. Just because the high-frequency data is noisy and ultimately, the Chinese, you know, again, the stock market's up 50% or so from the lows. It's at a new high, I think, today. The tech sector is booming. There's, I don't want to say bubble, but there's a big AI boom in terms of the AI-related shares.

• 20:56Jordi Hays?

  Yeah, their AI companies are going public much sooner than ours, right?

• 21:00Bill Bishop?

  Yes, with much lower revenue, raising much less money, much lower valuations. And a lot of it is because they, you know, they actually need the capital. I mean, it's, I think they, but the amount of capital they need in raising is a fra, it's like, it's like, you know, a rounding error for what, like, OpenAI is raising. Not quite, but sort of, right?

• 21:18John Coogan?

  No, yeah, I mean, you see some.

• 21:19Jordi Hays?

  What is the general, how does the general populace feel about AI? I think most of America is, especially after the Super Bowl, nobody was seeing the Super Bowl AI ads being like, yeah, this is amazing.

• 21:33John Coogan?

  There's a lot of bad.

• 21:34Bill Bishop?

  Because they kind of suck.

• 21:35Jordi Hays?

  Well, yeah, okay, so the ads, yeah, the ads weren't that great. A lot of them weren't that great. But there's just also a general fear around job displacement, lack of, you know, people are not excited even to put a data center in their state, right? We have all this legislation going down the pipeline. But how do people in China actually feel? Unemployment rate for youth is already so high, it's hard to imagine it going much higher. So maybe they're, maybe people already feel like it's over, but.

• 22:02Bill Bishop?

  So I mean, data centers, energy, obviously, you have other guests who talked about it's not an issue for China, right? It's somewhere they could build as many data centers as they want, as long as they can get the chips. That's the bigger issue. I think when you look at what the government is doing, you know, they have a, they have like this AI plus plan they rolled out a couple of months ago, where it's really to embed AI throughout the economy and throughout society. And so they're not really focused on as much as sort of getting to AGI and these massive models. They're really more focused on diffusing, you know, how do you use AI on all sorts of tasks in your apps, in WeChat, in, for medical, for like seeing doctors, for medical advice. I mean, there's a big boom right now

• 22:43Bill Bishop?

  in companies chasing sort of medical AI, including Alibaba. And so it seems like even though it may not be, you know, the models may not be like the ChatGPT or Gemini levels, at the same time, they're being, taking a much more pragmatic and practical approach to just diffusing it through society. And then in terms of what it does to employment, there's been lots of discussions about the impact. I think, you know, it's a country where they can incentivize positively or more negatively companies to not necessarily lay off as many people as they would if they were operating just purely on an economic basis, when it comes to sort of AI disruption. Doesn't mean unemployment is not a significant

• 23:25Bill Bishop?

  problem for the youth, and I don't know, I don't know that they have a good solution for that, but it isn't holding back what they're trying to do around AI at this point.

• 23:33Jordi Hays?

  That makes sense. Last week, Jensen was on CNBC, I think it was Thursday or Friday, talking about, you know, how the overwhelming demand, obviously, we had earnings last week, everyone's raising their capex guides. You have legacy AI chips that are sitting at very high utilization, surprisingly high utilization and pricing compared to what a lot of the AI bears have been thinking about over the last six months, saying like, hey, all of these chips are going to be worthless, and it turns out so far.

• 24:03Bill Bishop?

  Like Michael Curry and others?

• 24:04Jordi Hays?

  Yeah, yeah, those types. And so I think there was some conversation around, okay, and if Jensen wants to go like, hey, all these people are super chip constrained.

• 24:17Jordi Hays?

  I think the question comes up, why, okay, so then why are we, why are we selling, why are we selling chips to China then, right? If, if, if our, if our leading labs are not able to get the

• 24:29John Coogan?

  Call Amazon, they'll buy them.

• 24:30Jordi Hays?

  Yeah.

• 24:30Bill Bishop?

  It's a great, it's a great question, and it's something that is, you know, certainly you've seen some movement on Capitol Hill, asking that question, asking the impact on like, like HBM prices, right? Memory prices. And ultimately, the answer is, well, Jensen Huang can go direct to Donald Trump and convince him to approve these sales. What's interesting, right, I think it was the Financial Times reported last week that even though, like, the Department of Commerce has signed off on the licenses to sell to China, the H200s, that the Department of State, the State Department, which has this Bureau of, I think it's Arms Control and Nonproliferation, they have yet to sign off on it. So the sales actually haven't happened.

• 25:10Jordi Hays?

  Interesting. And, and what is the general sentiment now from the CCP and various groups? Because when, the first time, we, we maybe agreed generally to a chip sale, and then Howard Lutnick came out and said, like, we're gonna get them addicted to the American AI stack, and then they were like, actually, we don't want, actually, they were like, no, we don't want them, but clearly, all the companies want them, they're compute, they're more, way more compute constrained than we are. They're ready to rock. And so where is that actually? Do you think that if it actually gets fully approved, that they will all flow without any type of red tape on the China side?

• 25:46Bill Bishop?

  No, there's been reporting, I mean, various reports, the Chinese are being careful about who, how, who they allow to actually order, and they're talking about the H200s, they didn't want the H20s, they need the H200s, because China has enough, like, they can actually make, looks like decent inference chips, they just can't make the chips they need for training, right? And so, that's the H200 fills that gap. And so I think the Chinese perspective is, look, we're not there yet, we can fill this gap we have to sort of keep competitive in the AI game, Nvidia, the US government has approved these sales, Nvidia will sell this to us, we're just gonna make sure that If you buy these, you also have to also make sure you're buying Chinese chips to keep supporting our own indigenous ecosystem, right?

• 26:29Bill Bishop?

  And so, and then, of course, there are some, I think, potentially some security concerns because of the, whatever the security review the US is requiring, which is basically, I think, just to make sure that the chips get shipped to the US, charge the 25% licensing fee as a tariff, which makes it legal, and then ship them back to China. But, you know, from the Chinese perspective, what's a security review? What do they have to do these, you know, who knows what they might do to these chips? So there are certain places, I think, that, like state-owned enterprises, certain labs, where they probably won't want these chips. But the issue also is, right, there's also still a lot of Nvidia chips in China, right? So we should see in the next week or so, if you remember, you guys, it's been a year since the quote-unquote "deep-seak" moment, right? Yeah. And so now everyone's waiting for DeepSeek's next model, which is supposed to launch

• 27:14Bill Bishop?

  on or around Lunar Near, which is next Wednesday the 17th. So we should have some sort of a deep-seak model in the next eight or nine days. I think it was the Information reported, it's being trained on Blackwells, which they're not supposed to have, right? But somehow they have the Blackwell. They fell off the back of a truck. And they can, they can get as many Nvidia top-end chips as they want, hosted overseas in these cloud facilities. Yeah, right. So it is, it is not a clean set of controls by any means. Yeah, yeah.

• 27:47Jordi Hays?

  What, what do you think China's reaction is to the latest election in Japan? Obviously, Japanese equities responded positively to, to the result, but how are you tracking that whole situation?

• 28:02Bill Bishop?

  I mean, I think that the Chinese helped Takeuchi because their, their reaction to her comments in early November, which, again, she said, she reiterated the Japanese position on sort of a Taiwan contingency, so to speak. She said it in a, in a, in a setting where it hadn't been said before by a sitting prime minister. And, you know, but their reaction really, I think, helped make her case and other sort of more defense hawks in the Japanese government make their case that we need to do more because China's a threat. And so now she really has a mandate. The question will be, will the Chinese continue to really push on her? Or do they sort of find ways to, over the next, it won't be immediate, but over some period

• 28:47Bill Bishop?

  of time, find ways to at least calm things down and then start re-engaging with dialogues? I think, you know, the fact that they clearly started playing the rare earths card again with Japan, you know, also, again, in some ways, there's no going back for Japan, even if the Chinese were to find, they were to find an off-ramp and find a way to sort of get back to kind of the US-China sort of détente-ish like relationship around, I think the damages have been done in terms of Japan needs to, a stronger military and Japan needs to move faster to protect itself from the weaponizing of certain parts of the supply chain that China can do, which we all know from rare earths.

• 29:28John Coogan?

  Yeah, yeah, that makes tons of sense. Anything else, Trudy?

• 29:31Jordi Hays?

  This was super fun and fascinating. We love having you on, the audience loves you too. And I'm gonna follow up and ask what headset you use because we're making, because not every, not every guest of ours comes in with a sound video setup like this.

• 29:47Bill Bishop?

  So, it's a sure, it's a sure headset and Ben Thompson got it for me, you know, because he, because I do the Sharp China podcast with his team, with Andrew Sharp, and so Ben sent me all the gear.

• 29:56John Coogan?

  Very thoughtful.

• 29:57Bill Bishop?

  So I have this solid-state logic little box and then I plug in this headset. Actually, is it? Sorry, it's a Sensenhauer thing, sorry.

• 30:06John Coogan?

  Sennheiser?

• 30:07Bill Bishop?

  Sennheiser, yeah, yeah.

• 30:08John Coogan?

  There we go, Sennheiser.

• 30:09Jordi Hays?

  Alpha.

• 30:10John Coogan?

  Well, thank you so much for taking the time.

• 30:12Bill Bishop?

  Thank you.

• 30:13Jordi Hays?

  Great to see you.

• 30:14John Coogan?

  Good luck with the weather. We will talk to you soon.

• 30:16Bill Bishop?

  Thank you, thank you.