US US AI sector Loading... : Investor Sentiment and Bull/Bear Views

He argues the American AI tech stack and frontier models are the global teachers, with OpenAI and Anthropic at the frontier, while Chinese open source models are a couple generations behind. The G20 should adopt the American AI stack to democratize education and opportunity.

AI will be revolutionary, but many public and private AI companies are priced at extreme revenue multiples with no room for issues. AI companies are borrowing heavily, competing with the Treasury for capital and prospectively eroding the tax base. Meanwhile, Chinese AI is becoming much cheaper and good enough; serious Chinese competition is fatal to 1,000x, 100x, 10x, and probably even 5x sales valuations, compressing them sharply.

US AI companies dominate globally with 43 of the 50 largest AI firms, while Europe has only ASML and faces flat economies, high UK interest costs, and regulatory fragmentation. Europe is not in a position to catch up, making US AI the clear long and European AI a structural underperformer.

Sacks warns that a real national-security and competitiveness threat is brewing from state-level AI regulation: over a thousand bills are moving through state legislatures, and if that continues the US ends up with a patchwork of 50 different state regulatory regimes instead of one seamless national framework. Because China has declared AI a national priority and understands how strategic it is, hobbling American AI innovation with 50 conflicting regimes would hurt the US in the one race it cannot afford to lose. The action plan deliberately did not declare a preemption policy, but he expects the issue to be forced over the next year.