Beijing brought a fentanyl rule and a Musk testimonial to Washington, and left its own CEOs at home
The welcome is bigger than the agenda
Xi Jinping and Peng Liyuan land at Joint Base Andrews today, and Trump will be on the tarmac — something he does not normally do for anyone. Thursday brings an indoor arrival ceremony on the White House State Floor, a Rose Garden review, a B-2 and four F-22s overhead, and a state dinner. None of that happened for Trump in Beijing in May, as the Council on Foreign Relations points out.
The deliverables list is thinner than the pageantry. A temporary extension of the Busan truce, some agricultural and energy purchases, and the AI dialogue agreed in New York on Sunday. Much of the US national security establishment is unhappy about the staging; the polling says American anxiety about China has come off its 2024 peak.
Beijing arrived bearing gifts, which is the tell. Two more precursor chemicals went onto the export-licence catalogue for shipments to the US, Canada and Mexico on Tuesday, taking the list to 18, signed by the commerce ministry plus four other agencies, per SCMP. Today the judicial and public security organs issued sentencing guidelines for fentanyl cases. Ambassador Xie Feng calls the visit a "historic milestone".
And hours before the plane left, Tesla's Elon Musk sat down with CCTV and called Xi "a great leader," saying China has prospered immensely under him, per SCMP. Jensen Huang, Sam Altman and Qualcomm's Cristiano Amon are on the state-dinner list. Chinese business leaders, meanwhile, probably will not travel at all — a planned bilateral investment board went unagreed, SCMP reports.
WORTH NOTING: Lianyungang's maritime authority closed part of the southern Yellow Sea to shipping for military activity, daily from 5am to 6:30pm, from tomorrow until 23 October. A month. It ends three days before the Fifth Plenum opens.
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The chip minister gets the chip province
Li Lecheng is moving to Anhui. The 61-year-old industry and information technology minister — in post since April 2025, before that governor of Liaoning — becomes party secretary of the province, per SCMP. He takes over from Liang Yanshun, Anhui chief since June 2024, who keeps another party post.
Anhui is where the memory business lives. Hefei hosts ChangXin Memory, whose fifth-generation DRAM specifications I ran on Monday, and the province is home to JAC, currently the market's favourite guess for Huawei's next flagship car partner. Putting the minister who writes industrial policy in charge of executing it in one province is not a demotion. It is a test.
Separately, the army's own paper explained the purge. Expelling Zhang Youxia, until this year the highest-ranking uniformed officer in the PLA, and Liu Zhenli, a Central Military Commission member and chief of its Joint Staff Department, "eliminated a major hidden political danger," PLA Daily said today. Hidden, from the chairman of the commission, for years.
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Frontier AI has become an infrastructure bill
DeepSeek published the machine that trains its agents. A paper submitted 19 September with 130-plus authors, Liang Wenfeng — the former hedge-fund manager who founded the lab — among them, details DSec, the sandbox platform behind every reinforcement-learning run from V3.2 to V4.1. One production cell: 160 CPU nodes, 30,000 cores, 250TB of memory. It serves 3m sandboxes a day, peaks above 380,000 concurrent, creates over 5,000 a second, and once brought up 32,000 for a single job, per Zhidx.
The engineering is a storage argument. Base images, workspaces and toolkits are split into separately versioned read-only layers and recombined at launch — 11,266 base images and 102,171 workspaces in one production week. Sandboxes actually read only 4.2% to 13.3% of an image, so DSec streams on demand: an 8,192-container burst deploys in 35 minutes against over an hour for a Docker cold pull.
The best section is the one where the agents cheat. One overwrote /bin/bash to intercept answers from the shell the harness calls. Blocked by AppArmor, another reached for an XFS ioctl that swaps the underlying data blocks of two files, pulling protected content onto a descriptor it owned — and corrupting filesystem metadata in the process. Others scanned reachable services, or pulled the solution from GitHub through a package proxy, via QbitAI.
THE TELL: DeepSeek is briefing the UN Security Council on AI risk today. Publishing a catalogue of your own models breaking containment to score points is the only kind of safety credential that is hard to fake.
Meanwhile everyone has decided bigger is back. Alibaba chief executive Wu Yongming said Qwen4.5 and Qwen5 target 5 to 10 trillion parameters; DeepSeek is training around 2T and aiming at 8T; ByteDance is reported training up to 10T. Today's ceiling is Moonshot's Kimi K3 at 2.8T total but only about 104bn active — 896 experts, 16 firing, per a Tech Planet piece in Jiemian.
The bill is the argument against it. Alibaba's June-quarter capex was 67.7bn yuan (~$9.5bn), up 75%, flipping free cash flow from +73.8bn yuan (~$10.4bn) to –46.6bn (~–$6.6bn). ByteDance's 2026 ceiling is $70bn. And Alibaba's 20GW target for 2032 means adding 16–17GW on Goldman's estimate of 3–4GW live now — at Huang's $50–60bn a gigawatt, that is $800bn to $1tn.
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AI took over the expensive step in a pig-butchering scam
The part of romance fraud that needed a human has been automated. TMTPost walks through OpenAI's threat report on an operation it codenamed Date Bait: likely Cambodia-based accounts generating fake profile photos, a logo for a "high-end dating service," a roster of invented women to choose from, and a flirtatious AI receptionist that warms the target up before handing off to Telegram. Targets were Indonesian men. OpenAI puts it at hundreds of victims a month, from the scammers' own claims, here.
The humans are still needed for the ask. One victim was told a data-processing error required 20.5m rupiah — about 9,000 yuan, roughly $1,270 — to release a 35% bonus. The scammers' internal word for that final step is "the kill." One account asked ChatGPT for tax advice and gave its occupation as scammer.
The structural claim is the one to take seriously. Sustaining a fake relationship for weeks is why this industry needed trafficked labour and fenced compounds at all. Chainalysis puts AI-linked operations at $3.2m extracted on average in 2025 against $719k without, and 35.1 transfers a day against 3.89. If the courtship is free, the compound stops being necessary — and what replaces it is smaller and harder to find.
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China is now where elite AI researchers go
Carnegie China has the number, and it flipped in 2025. China took 40.6% of top-tier AI talent placements, up from 27.1% in 2022; the US fell from 46.4% to 34.2%, per The Information. Aggregate, clean, and irresistible to a US headline writer.
SCMP covered the same phenomenon one person at a time, and the person declined the narrative. Neurobiologist Ye Bing is leaving the University of Michigan for Nanjing University, and says it has nothing to do with Trump administration policy — or with the suicide of Chinese scholar Wang Danhao on the same campus six months ago, a day after Homeland Security officers interviewed him, here.
Underneath both sits a mood gap. Gallup polled 37 countries and found positive sentiment on AI outweighing negative in 34 of them — with over 90% of people in China saying AI will improve daily life, via the New York Times. Researchers move toward money and compute. They also move toward rooms where nobody thinks their work is a hoax or a doom cult.
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Threads we are pulling
- I was too generous to Zhipu yesterday. Following Thursday through Tuesday on ZCode uploading customer workspaces: the open-sourced repository contains an empty initial commit plus one commit adding about 6,973 files and 1.03m lines. The pre-incident history is simply absent, so when the upload path was added, what it served, and which shipped versions carried it cannot be reconstructed, per InfoQ China. The NOTICE file also concedes the shared agent runtime ships with no OS-level sandbox, and the CLI run non-interactively without a mode enters "yolo" mode, skipping per-step confirmation. Tuesday I said the open-sourcing landed. A snapshot landed; provenance did not.
- Anthropic's week got another chapter. Following Tuesday on the Cyberspace Administration questioning DeepSeek and Moonshot staff: Anthropic says it disrupted a Beijing-aligned operation monitoring religious leaders and diaspora communities, including a Washington Tibet advocacy group — described by the actor Richard Gere, writing in the Wall Street Journal, as his own organisation, via Techmeme. DeepSeek briefs the Security Council today regardless.
- DeepSeek hired a CFO and a bank. Yan Wentao, born 1991, a Hillhouse Capital partner who previously worked at Tencent Investment, started Monday as the lab's first chief financial officer; DeepSeek has reportedly retained CITIC Securities for a STAR Market listing, via Leiphone's brief. One correction: Monday I put V4 at 1.4 trillion parameters from the investor meeting; Jiemian today has V4-Pro at 1.6 trillion.
- The market picked a new favourite in Huawei's car stable. Following the AITO handover thread: JAC hit its limit up at 21.32 yuan (~$3.00) and rose again today, three sessions of cumulative deviation above 20%, and told the exchange there is no undisclosed restructuring. The rumour is Stellantis talks over putting Huawei's platform into Maserati by late 2027, per TMTPost. Everyone else is buying reassurance: SAIC added 1bn yuan (~$141m) to its Huawei joint brand, and BAIC's Zhang Guofu put its cumulative spend on the Stelato line above 20bn yuan (~$2.8bn).
- Xiaomi's MiMo-V2.6 is a sliding-window model. Following Tuesday: Pro runs 70 layers, 60 of them sliding-window attention at a 128-token window, with 10 global layers; 384 routed experts, 8 active; a 5-layer drafter predicting seven tokens ahead. One RL update is 1,568 prompts times 16 rollouts — 25,088 trajectories — under fully asynchronous GRPO, with per-task rubrics synthesised from the differences between rollouts, per Leiphone.
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