Australian dollar reacts to China’s AI breakthrough, DeepThink

To finance now, here’s Alan Kohler. The Australian dollar responds to China’s AI breakthrough, DeepThink.

Transcript

00:00Well, the Australian share market hasn't got much of a tech sector, so despite the

00:05ructions over China gate-crashing America's AI party, the ASX was all about banks and

00:10resources as usual.

00:12Banks up, energy stocks down because of Donald Trump telling OPEC to bring down the price

00:17of oil, which immediately brought down the price of oil.

00:21Other commodities also fell because everyone's discombobulated about whether Mr Trump will

00:24do tariffs or not.

00:26The US share market fell and the NASDAQ fell a lot because of NVIDIA's trillion-dollar

00:31swan dive while the Shanghai market was closed for Chinese New Year.

00:35Now, here's the US S&P 500 and the Shanghai Index since the start of last year.

00:41And obviously the American market is well ahead because of all the excitement about

00:45AI, although there was a big rise in the Shanghai market in September.

00:50So I asked DeepSeek why that happened, and it didn't know.

00:54It just offered a few possible theories.

00:56Then I asked ChatGPT the same question, and it did know.

01:00It was Chinese government stimulus measures.

01:03Maybe you get what you pay for.

01:05But it's not surprising that China is catching up on AI and technology in general.

01:09China produces more STEM graduates, that is science, technology, engineering and mathematics,

01:14per year than the rest of the world combined.

01:18Having China come and do to AI what it's done to the car industry would be causing sleepless

01:22nights in Silicon Valley because the stakes are so high.

01:26$250 billion a year is now being spent on AI.

01:32That's 58 times Australia's total spending on all research and development.

01:38The Aussie dollar eased slightly against the US dollar and was steady against everything

01:41else.

01:42And that's finance.