Food for Thought: 2025 The Chinese Year of the (Ouroboros) Snake?

 January 29, 2025 - February 16, 2026: The Chinese Year of the Snake 

    Imagine the Unimaginables -

                                                           - Food for Thought!

Depending on who you ask, the Year of the Snake in 2025 can be full of quite a few positive possibilities and this could be especially welcoming after a very uncertain and exhausting 2024. It is said the snake brings wisdom, transformation, a kind of calm observance inspiring creativity. Seems like a lot of wishful thinking as the Year of the Snake starting January 29, 2025 has been quite a turbulent one.

One of my favorite exercises is to conjure up Food for Thought and Imagining the Unimaginable. In the world of finance and investing, this is trying to imagine what is not yet priced in the markets, expecting the unexpected. On Monday, January 27, stock markets got caught out by an announcement from a Chinese “start up” Artificial Intelligence (AI) company called DeepSeek who announced an open-sourced large language reasoning model that actually shows its reasoning steps when deriving an answer or conclusion.

On January 28th, the New York Times published a guest opinion piece from Harvard Professor Mihir A. Desai:  “Like the ouroboros, I believe Big Tech is eating itself alive with its component companies throwing more and more cash at investments in one another that are most likely to generate less and less of a return.” 

https://www.nytimes.com/2025/01/28/opinion/nvidia-deepseek-ai-valuation-ouroboros.html?unlocked_article_code=1.s04.Y1sW.DbnBUS1WD5zP&smid=em-share (paywall)

I listen to lots of podcasts while out walking my dog. I am also an observer and dabbler in the equity markets. On Monday, January 27, the DeepSeek revelation created havoc on the stock markets which have been heavily driven by the excitement surrounding AI (Artificial Intelligence) and its scientific, creative, economic and financial growth prospects. It was also pretty much the closing of the Chinese Year of the Dragon switching on Wednesday, January 29th to the Chinese Year of the Snake. Coincidence? Professor Desai's piece was particularly focused on the implications for Nvidia shares and whether or not with the evolving story justifies the stock continuing to trade at its relatively high valuation multiples.

The Ouroboros comes to mind with the idea stated above in the quote Professor Mihir A. Desai. At first I imagined the upstart head of the Ouroboros snake eating away at Silicon Valley’s AI Leaders’ body and tail giving new life to the innovative little guys (engineers with limited resources). Or, is it more the Big Tech companies pouring huge resources into advancing AI eating themselves as stated in the quote above? In either case, the complete process will lead to a new more advanced snake (AI Apps), which some say will be cheaper, perhaps eco-friendlier and more accessible to many at large. Some compare this eventuality to the capital intensive airline business which provides great services and product at an ever cheaper price. Great for the user, but not ideal for the business as such. This DeepSeek event could also be another "Sputnik" moment when America got a wake up call when the Russians were ahead in space in the late 1950s. Is this also a wake up call for the American AI giants to be able provide a superior specialized AI product or better yet one for the masses at decent returns on their Investments (ROI)?

Economic and earnings growth depends on greater productivity, sales and competitive advantage. AI is thought to be one of those innovative tools which will help companies achieve greater efficiencies and profitable growth. I like to think of that this all properly functions in a "Win Win" environment. All parties contributing to the growth win. Much of what we are experiencing these days is either a Zero Sum Game or "I Win You Lose" or "Winner Takes All" which is a result of major consolidation in an industry. What if going from "Win Win" to "Winner Takes All" gives rise to the Ouroboros or the consolidation process evolves into one of self destruction, even inspiring disruption? What happens to companies' earnings and their respective valuations? Food for Thought...

We are also witnessing currently a certain kind of devouring in Washington DC. The new administration is determined to devour the Federal Bureaucracy and replace it with a leaner, meaner and more efficient one under the command and/or guidance of DOGE's Elon Musk, the Silicon Valley Entrepreneur and richest man in the world. Upending and chaotic with many praising it as this is how disruption operates. It's a start, it's upending and a source of great uncertainty. No one is quite sure who is really in charge and it feels like gangster moves and some would even call it a Coup. Is this the work of the Ouroboros and are these forces in a self-destructive mode?

Like I said, this is simply Food for Thought…

What are some other possibe outcomes influenced by the Year of the Snake or Ouroboros Effect?

Just try to imagine systems or philosophies or concepts competing for the upper hand, which will win? Currently there is tremendous commotion in politics, domestically and internationally. It seems the incumbent rulers, be it coalitions of minority parties or single autocratic rulers may be also in a self-destructive mode, eating themselves away as they meet greater challenges when holding on to their powers. There are growing complaints over the inability of the established parties to take action (enact and enforce legislation) making them obsolete (getting devoured). The devouring process has been pretty evident esp. in the USA, i.e. a pluralistic democracy and there is a growing call for action to re-create the original balance of power and accountability. (See the podcast link below with Ezra Klein).***

A working democracy requires that we all take and demand action! And it is not just political action that is required but also societies must act. So many solutions are dependent on the long terms in order to reap the benefits. Longterm doesn't normally fit political will or thinking and the implementation of these ideas has become obsolete. Perhaps the generational change as Baby Boomers retire will change the kinds of actions finally taken. In any case let's go for the Win-Win!

I also asked ChatGPT (how about that?) to clarify examples of how the Ouroboros can influence economies, industries and businesses. Here is the answer I got:

The Ouroboros—an ancient symbol of a snake or dragon eating its own tail—represents cycles, self-renewal, destruction, and rebirth. When applied to economies, industries, or businesses, it can symbolize patterns of growth, collapse, reinvention, and sustainability. Here are some examples:

1. Circular Economies (Sustainability and Renewal)

In a circular economy, resources are reused, recycled, and reintegrated into the production process, creating a continuous loop of value—just like the Ouroboros.

• Example: The fashion industry adopting circular practices by using recycled fabrics and reselling second-hand clothing, creating a self-sustaining model.
• Tech Industry: Companies like Apple are embracing closed-loop supply chains, recycling old devices to extract raw materials for new products.

Ouroboros Meaning: Infinite resource regeneration and reduced waste, with industries "feeding on" their previous outputs.

2. Creative Destruction in Business (Rebirth through Failure)

Creative destruction is an economic concept where innovation replaces outdated systems. Businesses may collapse, but new ones emerge stronger in their place.

• Example: The transformation of the music industry from physical media (CDs) to digital downloads to streaming services. Each iteration disrupts and replaces the previous model.
• Retail: Brick-and-mortar stores declining due to e-commerce growth (Amazon, Shopify), but reinventing themselves through experiential shopping or hybrid models.

Ouroboros Meaning: Destruction leads to renewal, driving continuous innovation.

3. Boom-Bust Cycles in Economies

Economic cycles of expansion, crisis, and recovery reflect the Ouroboros: economies often consume themselves (e.g., excessive speculation, debt crises) before reforming and growing again.

• Example: The real estate market experiences periods of boom and bust. After a crash, the market eventually recovers and starts growing again.
• Tech Bubbles: The dot-com bubble (1999–2000) and the cryptocurrency market illustrate cycles of rapid growth, collapse, and rebirth.

Ouroboros Meaning: The cyclical nature of growth and renewal after collapse.

4. Business Lifecycles (Renewal and Transformation)

Companies often experience life cycles of growth, maturity, decline, and transformation. Businesses that adapt reinvent themselves and begin a new cycle.

• Example: IBM transformed from a hardware company to a software and services company to remain relevant.
• Netflix: Originally a DVD rental service, it evolved into a streaming giant and then a content creator.

Ouroboros Meaning: Reinvention and continuous adaptation for survival and growth.

5. Self-Consumption or Overexploitation (Destructive Ouroboros)

In some cases, industries "consume" themselves through unsustainable practices, ultimately leading to collapse.

• Example: The fossil fuel industry, if it doesn’t transition to renewable energy, risks depleting resources and rendering itself obsolete.
• Overfishing in Seafood Industry: Overexploitation of marine resources leads to resource depletion, forcing a hard reset in ecosystems and industry models.

Ouroboros Meaning: Unsustainable consumption eventually leads to collapse and necessary rebirth or restructuring.

I'm sure you can think of many more examples, but most importantly, how will the Ouroboros influence positive and "Win Win" outcomes in these challenging times!

Anyway a bit of Food for Thought! Happy Chinese Year of the Snake!

Here are links to the Articles and Podcasts that inspired this train of thought:

1) The NY Times: https://www.nytimes.com/2025/01/28/opinion/nvidia-deepseek-ai-valuation-ouroboros.html?unlocked_article_code=1.s04.Y1sW.DbnBUS1WD5zP&smid=em-share (paywall)

  “I Study Financial Markets. The Nvidia Rout Is Only the Start.   Jan. 28, 2025 by By Mihir A. Desai

 Dr. Desai is a professor at Harvard Business School and Harvard Law School.

 “Nvidia’s sharp turn of fortunes illustrates much deeper problems that investors are ignoring as they send the valuations of Big Tech to the heavens.”

 2) On the Media Podcast: Host Brooke Gladstone speaks with   Ed Citron, host of the podcast, Better Offline* and author of the   newsletter “Where’s Your Ed At” on how the release of a new   Chinese AI chatbot model, DeepSeek-R1, threatens to burst the  American A.I. bubble, and how tech moguls have gotten away with overhyping A.I. for years.  Jan. 31, 2025: Starts at 21:00 minutes.   https://podcasts.apple.com/de/podcast/on-the-media/id73330715?i=1000687681530

Or

This is a bit of a rant or as explained below a dark story…

https://open.spotify.com/episode/3m3LuSfR5VIacgutVcpjQb?si=h8RJSKbXR3mOaZraGa4QCQ

*“How DeepSeek Showed That Silicon Valley Is Washed (Feb. 3, 2025)

https://podcasts.apple.com/de/podcast/better-offline/id1730587238?i=1000688414095 //

Or  https://open.spotify.com/episode/5MlffaCVyR4f5ejj0sXIpK?si=pm43EQbBTMaOK8DodYUhjg

“How DeepSeek Showed That Silicon Valley Is Washed (Feb. 3, 2025)--In this episode, Ed Zitron explains how the emergence of a much-more-efficient generative AI model has become an existential threat to the future of OpenAI and Anthropic - and tells a dark story about the death of innovation in Silicon Valley.”

3) HardFork Podcast (NYTimes & Platformer) January 31, 2025

“This week we go even deeper on DeepSeek. ChinaTalk's Jordan Schneider joins us to explain the Chinese A.I. industry and to break down the reaction inside of China to DeepSeek’s sudden success. Then … hello, Operator! We put OpenAI’s new agent software to the test. And finally, all aboard for another ride on the Hot Mess Express!”

 https://podcasts.apple.com/de/podcast/sway/id1528594034?l=en&i=1000687474973 

Or

https://open.spotify.com/episode/5ysW6DU05iwKYlO7M8KB9z?si=pVpYNULmR6KToKXTUGs6gA

4) The Daily (NYTimes): “China Challenges Silicon Valley for AI Dominance”-Feb. 1, 2025

Financial markets went into a panic last week over an obscure Chinese tech start-up called DeepSeek. The company now threatens to upend the world of artificial intelligence and the race for who will dominate it.  Kevin Roose, a tech columnist at The Times, discusses how DeepSeek caught us all off guard.

Guests: Kevin Roose, a technology columnist for The New York Times and co-host of the Times tech podcast, “Hard Fork.” (See above)

https://podcasts.apple.com/de/podcast/the-daily/id1200361736?l=en&i=1000688491558

5)*** The Ezra Klein Show Podcast (The New York Times)

"The Breaking of the Constitutional Order": There are two pieces to this episode. First, a tour of what Donald Trump has done — and what he has backed down from doing — over the last few days. There’s a lesson there. Perhaps Democrats are starting to learn it.
Then I wanted to hear the view of Trump’s first weeks back in office from someone on the right — someone who agrees with many of Trump’s policies, but also understands how the government works and who cares about our Constitution.
Yuval Levin is the director of social, cultural and constitutional studies at the American Enterprise Institute. His latest book is “American Covenant: How the Constitution Unified Our Nation — and Could Again.” What struck me about our conversation is that, on the one hand, Levin is less alarmed about much of what’s happening than I am. But on the other hand, he’s a lot less impressed by what Trump is actually getting done — and how these moves are likely to work out for him — than most Democrats I know. It’s a perspective very much worth hearing.
Mentioned:
“Don’t Believe Him” by Ezra Klein

 https://podcasts.apple.com/de/podcast/the-ezra-klein-show/id1548604447

 Or

https://open.spotify.com/episode/55XKXrUbYogQy7vlEW6c8X?si=XfISOExfRWSNvQMhSWv6Mw