Markets

China AI catches up and deflates U.S. AI scarcity

Basket pairs direct Yes bets on Chinese top-3/#1 AI model outcomes with long Alibaba and shorts in U.S. AI hardware/compute scarcity names. It captures near-term China model leadership and the expected compression of U.S. AI capex premiums; it leaves out unlisted/private Chinese labs and most domestic chip-chain upside.

The basket

• Will a Chinese company have one of the top 3 AI models by December 31? · Yes on Polymarket · 25% of the basket
• Will a Chinese company have the best AI model by December 31? · Yes on Polymarket · 20% of the basket
• xyz:BABA · Long on Hyperliquid · 20% of the basket
• xyz:NVDA · Short on Hyperliquid · 15% of the basket
• xyz:SMH · Short on Hyperliquid · 10% of the basket
• xyz:CRWV · Short on Hyperliquid · 10% of the basket

What would prove it wrong

• Chinese models fail to reach top-3 quality and Polymarket odds/leaderboards deteriorate into year-end.
• U.S. frontier labs widen the capability gap while NVIDIA, SMH, and CoreWeave rise on durable compute-demand evidence.
• Alibaba fails to respond positively to China AI breakthroughs or China policy/geopolitical risk overwhelms AI upside.