#China

AIByteDance Seed researchers found that language models compressing their KV cache in fixed-size chunks retrieve the same information unevenly depending on token position. In a 128K-token needle-in-a-haystack test, base DeepSeek-V4 checkpoints differed by up to 40.2 percentage points by phase, and post-training narrowed but did not eliminate the gaps. The authors urge evaluating such models across positional phases, since high average accuracy can hide systematic failures.

AITencent Hunyuan, with Fudan and Tsinghua researchers, released ExplorationBench, a benchmark that tests whether AI systems can discover rules through experiments in verifiable alien worlds. Across 10 frontier systems, feedback from experiments raised the best AlienCode score to 89.0% after four rounds, while closed-book runs without feedback stayed at 0.5–11.0%.

AIDonghua University researchers spun transistors, resistors and capacitors into a continuous fiber that functions as a circuit, using microfluidic encoded spinning, according to a Nature Electronics paper. The fibers integrated multicolor electroluminescence, analog and digital logic, and non-contact spatial sensing, and in demonstrations guided a robotic gripper and let a finger control a robotic arm and drone without touch.

AIEpoch AI estimates the AI chips shipped through 2027 could support about 30 to 170 million concurrent frontier-model agents, or nearly 2 billion with cheaper models. Its researchers find the cost of a fixed level of AI performance has fallen about 47% per quarter over the past three years. The newsletter also reports China's semiconductor supply-chain exposure is 2.7 times that of the US.

AIChina is more exposed than the US to semiconductor supply disruptions, with semiconductor producers earning $15.2 per $1,000 of Chinese final demand in 2022 versus $5.7 for US spending. In a combined Taiwan disruption and China–West decoupling scenario, Chinese advanced processor prices rise 17-fold and real gross national expenditure falls 3%, compared with about a 20% price rise and 0.6% fall for the US. The authors report the gap persists across robustness checks, though the exact size carries significant uncertainty.

AIChinese AI companies earn about 10% of the combined AI-related revenue of OpenAI and Anthropic, according to Epoch AI as of September 2026. Their main income streams are consumer apps, API access, enterprise and government deployments, licensing fees, and AI-complemented businesses such as cloud and advertising. Releasing model weights lets third-party hosts compete on price, which weakens API margins for model-focused firms like Z.ai and DeepSeek.

Why it matters: The piece maps how Chinese AI firms earn revenue and why open-weight releases weaken API pricing, giving context for comparing them with US frontier labs.

AIFinancial work has to stand up to scrutiny. We evaluate Step 5 Preview on its ability to identify and verify reliable information, reconcile differences across reports, make assumptions explicit, and produce internally consistent forecasts and reproducible valuations. FinStepBench tests these capabilities across LiveSearch, CorporateValuation, and DeepResearch. We also evaluate Step 5 Preview on FrontierFinance across six investment use cases.

AIDeepSeek V4 Pro 0813 recorded zero refusals across 840 adversarial security tasks in CyberGym testing, solving them at about half the cost per success of the top-scoring model tested, Kimi K3. In the 697-task common cohort, V4 Pro reached a 53.7% reward rate at $2.50 per solved task, versus 47.6% and $9.64 for GPT-5.5 and 5.9% and $33.28 for Claude Opus 4.8.

AIThe post argues that China's commercial-scale EUV machines should be forecast for the late 2030s and immersion DUV for the mid-2030s, using ASML's development timeline as a reference. It also weighs factors that could push these estimates earlier or later, including state funding, espionage, talent flows, and the use of AI in R&D. The authors note that forecasts placing either milestone in the 2020s would need strong justification.

AIThe Beijing Academy of Artificial Intelligence (BAAI) published its Emu3 multimodal large model research in Nature, which the post describes as the first large-model achievement led by a Chinese research institution in that journal. Emu3 learns from text, image, and video at scale using next-token prediction alone, reaching generation and perception performance comparable to task-specific methods. The authors frame this as a step toward scalable, unified multimodal intelligence systems.

AIThe team proposed a simple yet efficient machine translation solution named VOLT, which is now open source to developers. Check it out: