Pod Insights Azeem Azhar's Exponential View What 72hrs in China taught me about the future (AI, EVs, more) About this episode In this episode, I reflect on a whirlwind three-day visit to China - my first in over 20 years. And what I saw was remarkable. The infrastructure puts most of the West to shame. The AI isn't just hype - it's working at serious scale. And the electric vehicles? They're about to steamroll the global auto industry. Here's what really struck me during my whirlwind trip to Beijing and beyond.
Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Azeem Azhar? You know, when you land in Beijing Airport, you are greeted with an incredibly clean, well-functioning, well-ordered airport. It's far above the quality of any of the US airports I've been to over the last few years. I would put it roughly at the level of Heathrow Terminal Five, so certainly better than Terminal Three or Terminal Two. Better certainly than Frankfurt Airport, perhaps not as good as some of the great Asian and Middle Eastern airports that have emerged since then. But that's absolutely a sense that you get as you as you land. It didn't feel particularly policiy either. I mean, you do get a sense of CCTV cameras as you do, for example, when you're in
0:41 Azeem Azhar? landing in a London airport and you obviously feel the police and security presence in many of these airports, particularly in in the US. I was a bit surprised. I really expected much more of that. And there were, you know, lots of batteries of camera of cameras you might find in in public space in larger numbers than you would see in in London. So you arrive at this airport, it's clean, it's really, really well-functioning. One thing to notice that you notice really straight away is that there's essentially no obesity in China. And in, you know, three days and seeing hundreds of thousands of people, you you get a sense that this is not a an epidemic problem that they are dealing with.
1:21 Azeem Azhar? The scale is absolutely huge. I actually went to a conference as a sort of academic expert. And the conference center I was at ran to some 1.4 million square meters. To give you a sense of what that scale is, that's 100 times the size of Union Square in San Francisco. If you imagine Soho and Tribeca in New York, it's double that size. And this is a convention center that was put up in just a few years, about seven or eight years ago. It's really, really remarkable. So I want to put my comments into three categories. The first category is what I noticed about infrastructure and engineering.
2:05 Azeem Azhar? The second is what I saw in and around AI and I Talked to a number of AI founders and researchers while I was there. And also, um, the third set of observations really about electric vehicles and what's happening with the uh the auto industry, again, having ridden in a number of cars, but also talking to a number of people involved in those areas. So I'll make my way through there. And as always, I'm happy to take questions about this or any other topic as we as we make our way through. So let's get started with uh with point A, which was infrastructure and engineering. I I would say you just really notice that there is
2:48 Azeem Azhar? a lot of infrastructure running around as you you come off through the airport and you're on the highways. And it's such a dissonance compared to landing, say, at JFK and being on the Long Island Expressway, where things look crumbling, they look like they're falling apart, there's some very, very slow repairs going on. This is not the case in Beijing at all. There is just a sense that things are being built, they're being built to last and being built to be maintained. Uh, and you know, that infrastructure story found its way across the high speed rail. Uh, I took a high speed rail from uh Beijing South Station
3:27 Azeem Azhar? through to Tianjin, running at just over three hundred kilometers an hour, which is about a hundred and eighty miles an hour. It was incredibly cheap. It was about seventeen pounds, about twenty dollars for that thirty minute journey. Uh, Beijing South Station is is chaos. It's like so many people, so many people that you, you know, will get lost in there. But again, to give you some sense, it's not much different to Grand Central, to be honest, or to London's London's Waterloo. The trains themselves are super, super efficient, running on time, very, very quick uh and really, really reasonably priced. So that's just, you know, part part of the that infrastructure story. But as you run through on the on the train journey,
4:10 Azeem Azhar? what you are seeing is all that concrete and steel that has been poured and laid down over the last thirty years to support these bigger and bigger. Cities Beijing is of course about twenty million people Tianjin where I went was a much smaller city but still twelve million so really nearly double the size of London. Uh and you're seeing pristine uh well ordered roads and expressways and in fact as I drove back from Tianjin to Beijing that the roads again were really, really impeccable. Busy, the occasional jam of traffic, but running really, really smoothly. You know, thinking about other countries I I visited, it certainly felt bigger in scale.
4:53 Azeem Azhar? It felt more invested than anything I've seen in the U S and things that I've seen in many parts of of Europe, even some of the great construction projects like the. Uh Orison Sound Crossing between uh Sweden and Denmark compared to some of the things that have gone on in in India. There isn't quite the same backdrop of of chaotic India uh when you are on in in these uh in these highways and on the train lines. So I was really struck about with the the degree to which the infrastructure has been taken really, really seriously. Of course, this is not a new story because we've read about it in the papers and many of you have no doubt. Uh visited China dozens of times in the last decade or so. Some of you have probably lived there as well.
5:37 Azeem Azhar? But I would say that you just I I certainly noticed that sense of of scale and quality of the of the infrastructure. It was also distinctly Asian, so there are parts of it that reminded me slightly of bits of Singapore. Infrastructure is great. You've got to then do things on top of that infrastructure and and I had a chance to talk to some of the A I scientists and some of the some A I founders. I in China and I want to really reflect on on that plus certain things that I've read and have gone on over the last few days. I think there's a very distinct. A path that the Chinese AI world is taking that's different to the to the US AI world.
6:17 Azeem Azhar? So in in one sense, what I see happening in the US is a really strong emphasis on building these very powerful, abstract, highly general, large language models with a real commitment and a belief that the generalizability is there. It's the generalizability that will provide better quality applications that users will like much, much more. Now, of course, there are vertical things happening in the US, but they don't have the same degree of of visibility and the same degree of perhaps of traction as a big general L L M's. What we're seeing in China from the big labs, who I didn't get to meet, I didn't get to
6:58 Azeem Azhar? meet a DeepSeek or Baidu and and so on, what we're seeing from those labs, of course, are competitive large language models, you know, the the Quin series and of course, DeepSeek and the world waiting with bated breath for DeepSeek R two. I should say, those of us who are elbows deep in AI are waiting with bated breath to DeepSeek R two. But you know, one of the things that we we learned this week was that DeepSeek R two may well be a little bit delayed because they are feeling the semiconductor controls. They're not able to access the degree of compute that they need in order to build out this model and make get this model to the quality that they need. So you certainly
7:41 Azeem Azhar? get that that sense of pressure present on on those those models just because of the compute, the compute shortage. And I think that that crunch on compute or other capacity is really being felt there. But China is also, the ecosystem is cracking along with more vertical apps, taking advantage of the ability to get lots of users and from lots of users, lots of data. A great example is Apollo, which is the self-driving car consortium. I actually spent some nice time with the chairman of Apollo. It's running in. In Wuhan and we've written about it, you should go and check it out in the exponential view archives.
8:25 Azeem Azhar? Uh it it's essentially profitable on a unit cost basis. Uh running these cars roughly meant to cost about eleven thousand dollars uh it across that that city. So you've got this example where there is quite an advanced and mature vertical application. But I've also had a couple of great conversations in the education and health space. Now, the the reason these are interesting, and I think they're really interesting for uh American audiences, is that we are familiar with the the problem of cost disease in services i- in the US, where a whole load of things have got much, much cheaper, where you apply technology to them, whether it's cell phones or computers or TVs. And there are a bunch of things, healthcare and education, which are getting more and more expensive.
9:07 Azeem Azhar? And one of the arguments from Silicon Valley is that it's because technology has not had a chance to disrupt those areas, bring higher quality at lower cost. And that once it is able to do that, we will start to see really, really substantial, substantial changes in the way those services get delivered. Well, what's happened in in China is that there have been examples, some examples of that happening a- at scale. So I was able to speak to the chair of Yidu Tech, which is a healthcare company, Gong Ru Jing, and their scale is is quite something. They've analyzed five and a half billion authorized medical records, covering nearly a billion patients. As of last year, nearly twenty eight million people
9:50 Azeem Azhar? had completed at least one interaction with their with their healthcare platform. And it was it was really interesting to see that that scale. And that scale is enabled, of course, because there's a public health system in China, the public health insurance. I'm going to absolutely brutalize the pronunciation, I think, is uh Quiminbao. Uh through that, uh Yidu Tech serves more than thirty four million people in a dozen cities. So you get this point where actually you do see all of the benefits of of a large population, which you can serve and then start to get the data and the interactions from all of this. I spoke to, I mean, I spoke to many, was a really impressive guy called Derek Lee.
10:33 Azeem Azhar? And Derek is the founder of something called Squirrel AI, which is an education platform. Now, we've, we've got these ideas, right, that AI can adaptively deliver kids' education, keep them in that flow state where questions are hard but not too hard. Progress can be very quickly tested and the, the, the, the difficulty of the lessons can be adapted appropriately to maximize learning rates. Derek was a winner of the International Maths Olympiad. He's absolutely superb, superb, high-energy person. And, you know, as he started to talk to me, talk to me about this app, you know, as a product person, I was genuinely pretty impressed with the way he thinks it through.
11:15 Azeem Azhar? So the way they think through delivering curricula through an AI teacher where there's no human teacher involved is to think through how do you deliver a degree of metacognitive cognitive capability that might vary from subject to subject. So the art of metacognition, if you're doing maths, is quite different if you're doing perhaps a social science. What that required then was a very, very granular breakout of a series of skills and sub-skills that then become pathways, that are adaptive pathways that students get through. They've served 24 million students. They also give this service away for free to millions of students in the poorest areas of, of China.
11:58 Azeem Azhar? One of the observations Derek's made, Derek made was that there are lots of places where you'll be taught maths in rural China, far in the, in the east, maybe in, you know, in the Tibetan plateau or something, where you won't be taught by anyone who's been trained in, in maths tuition. And now you can be with Squirrel AI. Some of the numbers that he shared with me of, of performance improvement were absolutely crazy and, and off the charts. So I'd recommend you, you search Squirrel AI and, and take a look at the way in which they're able to bump up test scores. But there was one thing that, that really struck me. So Derek comes from a family of teachers, his father and his grandmother. And he said that in, in China, there's a Competition to find what are called super teachers.
12:43 Azeem Azhar? And the super teachers are teachers who in their subject are the best out of three thousand teachers. And typically, a town may have, you know, it's one super teacher in a in a subject, presumably the cities have more. But it's an incredibly, incredibly competitive space to to get into your skills, your capabilities, your teaching record, your pedagogy. Has to be astounding to be a super teacher. So Derek tells me that they take some cohorts of students and some get taught by super teachers. And some get taught by squirrel AI where there is no human teacher involved. And you can see where this is going. But I don't have to tell you the result of this.
13:26 Azeem Azhar? I mean, the result was that the students who went through the squirrel AI system had far better learning outcomes than those who were taught by the very, very best teachers in their field. So that was Derek Derek Lee. I think the thing that that struck me about about squirrel AI, again, once again with my product hat on, was the amount of work he had to do to build these specific learning pathways, subject by subject, level by level, while keeping in mind this idea of a meta cognitive cognitive framework that you would need to learn. And that speaks to the importance of that kind of data in these types of vertical apps.
14:07 Azeem Azhar? And it's a lesson I suspect that could be brought over when we think about how do we want to deliver AI based education in in other countries, in the UK, in Europe or in the US. Anyway, I I was really, really taken in by his his story. So again, I encourage you to to go and check out squirrel AI or maybe I'll try and do something with him at some point in the future. So the third thing I wanted to talk about were electric vehicles and Chinese car companies. So as everybody who reads Exponential View has known for several years, we really thought that the investment in EVs skipping internal combustion engine innovation, focusing on the EV platform is going to put Chinese car companies far.
14:50 Azeem Azhar? Ahead, they were going to be able to use rights law and the learning curve to exhibit tremendous cost leadership. And boy, have they done that. So this vicious domestic market at scale where they have been fighting like angry tigers for years has really, really disciplined them. Now, I live in North London, it really is Tesla Central and, you know, for years on the commute of the commute when I'm dropping my girls into school. You would see the sort of alternate of a BMW i three, which is that gorgeous electric vehicle they they no longer make. And then a Tesla, then an i three, then a Tesla. In recent months, you've started to see some BYDs on the road.
15:30 Azeem Azhar? Not a large number of them, frankly, about as many as you see of Polestars, but there is a BYD showroom down in um in central London in uh uh in Mayfair, but off Barkley Square. So you're starting to see BYDs here, you're starting to see BYDs um on the Uber ranks. But to be fair, you see many more Kia Iconics and you see quite a lot of VW ID fours and even ID sevens um on the road here. And and a previous guest on Friday with Zim, when it isn't just me, was uh the Greg Jackson, the founder and CEO of Octopus Energy. And he has just done, I think, the most interesting car deal that I have come across.
16:12 Azeem Azhar? Which is a deal that involves the BYD Dolphin, which is their urban city run around BYD, this Chinese EV manufacturer. And what you can do with the BYD Dolphin deal through Octopus uh and and Greg is you'll pay your leasing fee. And provided you plug it in enough, you'll get paid or get free charging. Because it's going to form part of a virtual power plant, uh and in order to smooth out grid demand. They will borrow bits of your charged electricity overnight or during the day in order to basically smooth out demand and make the grid work more efficiently. The result is you'll get paid by not having to charge your car. And effectively, it could work out that you get that car for free.
16:57 Azeem Azhar? Because what you're contributing, you're contributing in a kind of economic democracy in a funny way, you're contributing to the overall infrastructure. And as a consequence, that contribution comes with a car that will ultimately come for free. I actually think it's much more interesting than the robo taxi model that's been discussed with Tesla. I think it's only because I'm a bit squeamish about my car and like who gets to go in it. And I've just seen how people treat taxis, but I think the BYD Optimus deal is really, really interesting. So of course, you know, if you've been reading exponential view, you know that we really thought something very interesting was happening
17:36 Azeem Azhar? in the Chinese EV industry and that the only person who understood it in the US, of course, was Elon Musk. I mean, he deeply, deeply understood those learning curves back over more than 12 years ago. And he unleashed the secret Tesla business plan, which he rather brilliantly put out in public. He said, you know, my plan is to build an expensive car so we learn how to build a less expensive car, which we can sell to people who aren't as rich. And then from that, we'll be able to learn more and create scale and build an even cheaper car and sell it to more people. And that's what you're what you're seeing out in China. And it's really noticeable on the streets because Beijing was 36, 38 degrees centigrade. It was really easy to breathe. I mean, it was a bit muggy, right? Frankly, it's 37 degrees centigrade.
18:19 Azeem Azhar? But I was able to go for a run, a 5K sort of relatively early in the morning when it was only 34 centigrade. And foolishly, I stayed in the sun because I wanted to adjust my circadian rhythms. But the presence of all those electric vehicles is really noticeable in the air quality. For those of you who want to know how it doesn't feel like, I strongly suggest you head over to London to the south end of the Finchley Road by the Swiss Cottage Tube Station, by the air quality monitoring station at around 7:45 or 8:00 in the morning and spend about 10 minutes there. And that is the opposite of what it's like to run in Beijing at quarter to eight in the morning, as I found. And that's because of the electric vehicles. I managed to ride in in a number of of cars because I was using DD, which is the the Uber,
19:04 Azeem Azhar? the little brother, the Uber out there. And, you know, I took a couple of Western cars, so I took a couple of Mercedes. Actually, they were Maybachs, which is a sort of posher version of the Mercedes. And I had a bunch of of BYD vehicles and a couple of others. And the one that I took on my three hour journey, if you go to my Instagram handle, which is at Azeem, A Z E E M, you'll see a picture of it in one of my stories. It was mind blowing. It was an amazing car. I guess the closest thing to a US car would be Lincoln Aviator, maybe, if the Aviator is a seven seater, the slightly smaller one. And you know, that that is the kind of prestige, you know, drive people from hotels to airports car in the US.
19:47 Azeem Azhar? And that has not a patch on this car that I was in. And in fact, I couldn't even see the brand. It had Harman Kardon speakers. But it had a tan leather interior, it had a fridge, an amazing console for the driver. It was super comfortable, massage seats and and all the rest. And really, really remarkable. Drive quality sense of luxury, definitely above a Lincoln, definitely above a modern BMW seven series, probably not quite where the S class is. Or maybe not quite where the Range Rover is, but really, really close to that. And the prices of these cars are incredibly keen. I mean, it's going to be a tidal wave.
20:31 Azeem Azhar? It's going to be a tidal wave, tariffs or not. I mean, I think European carmakers have had a moment of respite because Elon Musk and Tesla have have rather fallen out of fashion in Europe right now with sales down twenty seven percent of Teslas, even though the market's up twenty eight percent. But BYD has been one of the beneficiaries alongside the other marks like VW. But the cost leadership these firms exhibit is really second to none. So expect to see many more Chinese cars on the road. I think there are some sensibilities that need to get right around interface and so on, but it's it's an incredible, incredible drive. So that's the the end of my my three observations. One key takeaway that I would.
21:15 Azeem Azhar? Give and recommend is that, you know, nothing beats actually going there and seeing it. I mean, a lot of what I've said today may be, may just reinforce what we've written about in the past. And I had been slow post-COVID fitting in a trip, and I'm glad that I was able to, even though, as I said, it's a really, really short one. And it obviously merits much more investigation. But I would say that a, a, a visit out there, as is true for trips to the Bay Area, which I think are absolutely critical if you've not been there in the past year or two, to just get a sense of the velocity of AI and the sense of how much AI is in the air there, just teach you a great deal. In that sense, it's
21:57 Azeem Azhar? always good to travel. And I'm glad that I did. Thank you so much for joining me today. We'll be back next week. And I'm now going to treat myself to a nice glass of sparkling water and a lie down to get over my jet lag. Thank you.
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