AS I write this, the share price of Nvidia, which makes the chips indispensable if you are trying to build an artificial intelligence, has just dropped by 16 per cent. This may not sound much, but that 16 per cent is nearly $600 billion — equivalent to the entire stock-market value of the largest American oil company, Exxon Mobil, or one third of the stock-market price of all the 100 largest companies traded on the London stock market. No company in history has ever seen so much wiped off its share price in a day, and it was the Chinese who did it.
Last week, a Chinese company made available DeepSeek, an AI chatbot that does almost everything an expensive American one can do, but at a fraction of the cost. What’s more, the programming behind it can be freely copied so that companies can run their own versions if they don’t want to ask questions of systems hosted in China. This is a heavy, possibly mortal, blow to the American dream of dominating the world through a stranglehold on high technology, and it threw my thoughts back to the very beginning of modern computing, when the British and American codebreakers competed and co-operated in the Second World War.
Contrary to the British legend, built around Alan Turing and the Enigma machine, most of the work of cracking wartime codes was actually done in Washington, because the Americans had essentially unlimited machinery and operators, and we never had enough of either.
When my mother was in charge of the efforts against a German diplomatic cypher, she could call on the use of one tabulating-machine operator at Bletchley. At the same time, in Washington, the Americans were using 100 against the same cypher. William Friedman, the American who coined the term “cryptography”, visited Britain in 1942 and was shocked by the materially primitive operation at Bletchley.
He reported home: “A very great deal of handwork and handwriting is done even at the top. Their papers look dirty & messy, their card indexes are terrible to look at — but they have the data on them & they know how to use them. They pass important info on dirty little slips of paper or chits & they don’t seem to get lost somehow. The rooms they work in are dirty & messy & cluttered up. Their toilets are few and terrible! But they get things done. And one should see the cups they drink tea from — well dishwashing facilities are nil & it’s a wonder to me there isn’t rampant trench mouth around.”
I’m sure that the Chinese operations now have immaculate toilets and all the most modern office equipment. But, like the British in 1942, the Chinese were forced to work smarter by the absence of American machinery; unlike the wartime situation, this was the result of deliberate American government policy. US government sanctions prevent Chinese companies’ getting their hands on the most advanced Nvidia chips, which were thought to be essential for really advanced AI. Now, it turns out that you can do the work with older chips, and far more cheaply.
And what is now left of the American Empire? One of the best and most illuminating reporters of the world outside the news is Chris Arnade, a former Wall Street banker who now wanders the world, mostly on foot, with his camera, and talks to people.
In 2022, he was in Liverpool, talking to a murderer: “I met Ian on my last day in Liverpool and in the last pub of the evening. The first pub I’d nicknamed ‘Falling down pub’ after the large shirtless guy who fell down, twice, while singing ‘You’ll never walk alone’. Each time his mates had to pull him up. I don’t have his picture because it was painful enough to watch him floundering on the floor like a sweaty bloated larva. But he wasn’t embarrassed. He’d lived a lot in his thirty years, you see. More than people twice his age, you see. Not that he travelled much, you see. Never left Liverpool actually. Wouldn’t want to.”
This is the kind of reporting that newspapers just can’t do any more, largely because it takes time as well as talent. Arnade publishes on Substack, where much can be read for free, and even a subscription costs £60 a year. My subscription to The Times costs four times as much, and makes me think far less. No wonder what used to be called the “mainstream” media are now known as the “legacy”.