The Chinese government's intense desire for technological self-sufficiency and global leadership paradoxically reduces investment risk. Beijing now "desperately" needs its deep science companies to succeed, making another unpredictable, Jack Ma-style crackdown on the industry less likely than in previous years.

For D1 Capital, the primary risk in China isn't economic but political. The government's ability to arbitrarily influence resource allocation, punish successful companies, and eliminate entire sectors without due process creates an unacceptable level of uncertainty for capital allocators, regardless of how cheap valuations become.

Unlike Silicon Valley founders who publicly aim to shape humanity's future, Chinese entrepreneurs face a 'political ceiling.' Expressing visions that conflict with the state's narrative carries severe risks, as demonstrated by past crackdowns. Ambitious public dissent is not a viable path for founders.

The argument that the U.S. must race to build superintelligence before China is flawed. The Chinese Communist Party's primary goal is control. An uncontrollable AI poses a direct existential threat to their power, making them more likely to heavily regulate or halt its development rather than recklessly pursue it.

A key contrast between the U.S. and China lies in the security of wealth. In China, even billionaires can be purged by the state. In the U.S., wealth is more easily converted into political influence and security, making it a safer haven for the ultra-rich, though this creates societal imbalances.

When a Chinese AI lab like DeepSeek achieves a powerful 'Mythos-level' model, the resulting power struggle will differ from the U.S. DeepSeek's founder has immense control over a private entity, setting up a direct conflict with an aggressive CCP, unlike the diluted, stakeholder-driven structure of Western counterparts like Anthropic.

In countries lacking an independent judiciary, business success can be arbitrarily nullified by political whims. As seen with Jack Ma in China, entrepreneurs can be 'disappeared' and major business initiatives like IPOs can be scrapped overnight for non-business reasons, such as making a statement a government dislikes.

Profitable Chinese giants like ByteDance trade at a fraction of their Western counterparts' multiples. This "China discount" stems not from business fundamentals but from the unpredictable risk of the Communist Party "smiting" successful companies and overarching geopolitical tensions, making them un-investable for many.

China's Communist Party (CCP) architected its system with capital controls and ultimate state authority to prevent subordination by Western corporate and financial powers. Unlike in other nations, there is no private entity or external force more powerful than the CCP.