Comment by numpad0
1 day ago
China grants up to 200% tax deduction on intangible assets acquired through R&D. Means your spending on AI training fees becomes a tax return amount or like appears as a magical donation deductible on the books. I don't know if DeepSeek is benefiting from exactly such a system, but that's generally how aggressively China seeks its advantages in high tech R&D.
Nobody else is or has been that aggressive. France on a Monday morning would be like $10b for Mistral in 3 years, and that'll be it. China is like $10b every year for 5 top companies for 5 years. Not necessarily to say such an all-in-doubling-down-always moves would be necessary or correct, but there is that kind of substantial funding disparity between China and the rest of the world.
> China grants up to 200% tax deduction on intangible assets acquired through R&D. Means your spending on AI training fees becomes a tax return amount or like appears as a magical donation deductible on the books.
This is misleading. Deduction reduces taxable income and does not provide tax return. E.g. if your taxable income is $1000 and you spent $100 on R&D and qualify for those 200%, $800 will be taxed.
Although you can often take losses from a previous year to offset current income. So if you do a huge amount of capital investment you can offset against profits for years.
Thanks for adding that, still very interesting idea. Perhaps this >100% tax deduction could eventually be applied to human labor to help incentivize employment and subsidize it with automation profits.