Comment by gaiagraphia

Their is plenty of innovation happening on both sides of the Pacific. Again, China publishes open source because they don't have another game they can play. They distill because they don't have the compute to compete. They are great lab, for sure, but the fundamentals are driving their behavior.

Oh yeah. Strategic disruption technique or not its a breath of fresh air.

This is why I don't understand why people complain about impractically cheap Chinese solar panels. The rest of the world should buy enormous quantities and bankrupt the mofos and hugely benefit along the way. Then later they can set up their own solar panel industries.

Most everything they teach in economics class is wrong. You would be better off ignoring everything they teach you.

Lots of people have succeeded. Neither Anthropic nor OpenAI has any technical advantage in the field of subscription engineering.

Is buying launch services really a subsidy, or did I misunderstand?

I am mostly economics illiterate but I understand a subsidy to be an economic concession given by the state to an entity which gives said entity a relative advantage compared to its peers.

In that sense (which could very well be bogus), letting a company violate individual IP of basically every human is less of an economic concession and more of unconsented to IP open season.

Even if one were to drop "economic" from "economic concession" and instead view a subsidy through the lens of a more general concession, one could say that the US Govt gave US AI companies a legal concession to sidestep the copyright protections of other US entities. But the US Govt should only get to undermine the copyright protection of other US entities - who gave American companies the right to violate the copyright of non-Americans?

That's some "download a car", $100000 per infringement pricing logic. No one is paying anyone 500 billion dollars. I'm sure rights owners wanted that, and more too, but it's nonsense to call it a subsidy that they didn't get it.

> China blocks foreign AI from operating there.

Given the current US government's tightening of export control restrictions and the introduction of a bipartisan bill to block use of Chinese AI in federal agencies, I'd say the two countries' positions are not far apart.

https://apnews.com/article/ai-china-united-states-competitio...

I think you will find that it's the USA government imposing such restrictions.

Seriously AI companies complaining about fair use is the biggest case of crocodile tears I can think of. Irony has been dead for a while, but they dug up the corpse and set it on fire anyway.

Don't forget insider threat vector, too.

You’re mistaking the original term hacker, a tinkerer of systems, for the black hat variety.

>Bootlegging is copyright theft.

Ok, but what about those shady sites that resell Windows education keys? They're certainly a "better experience" than buying legit keys, by virtue of being significantly cheaper. You aren't even really committing copyright infringement in the process, because Microsoft gives out windows isos for free, and the seller is really selling a random 25 character string, which can hardly be copyrighted.

>If there’s any bootlegging going on it’s Anthropic that’s doing the bootlegging but having mirrored the video etc sufficiently to beat copyright law.

US courts have consistently ruled it's fair use.

The current case law in the US is that the raw output of an LLM cannot be copyrighted without further meaningful arrangement or alteration by a human author.

I think renting out ID to let others in without telling the admin is generally unlawful in many places

I suppose you are violating the TOS by reselling a service, even if the output can't be claimed as belonging to anyone.

Bad at business? One of them has to make the thing.

This type of "resource curse" paints a perfect picture of why US based frontier providers are set up to fail. They want, and have, few restrictions and along with that unlimited warchest. The Chinese on the other hand aren't burning billions like millions. Anthropic, OAI, Google, Meta... They're all phenomenal examples of waste, corporate greed, inefficiency and are the reasons people hate tech bros at this point. Whining and crying from their super yacht, Parkinson's law is alive and well!

My biggest concern with pirating has always been malicious programs. But companies still need to show value in their products or people will pirate.

What added value can Anthropic give users not available to pirating users? That is what they should ask themselves.

Or building backdoor in to the physical servers sold around the world?

No, he means that the US will close most of its domestic market to competition just like China has for decades, and the US may start subsidizing and dumping its goods everywhere

they were being sarcastic

Usury and debt based economy creates a dynamic where being competitive in production is secondary to financialistion.

In short, instead of market being driven by demand and productivity, it is driven by financier curving out monopolies.

Peak Examples are Uber and AirBnB.

Shares and Goodwill. You loan money for good well or share of an enterprise which comes with benefits and risks.

Loaning money as per Islamic Law is a charitable act, not one of exploitation.

That's not true. Islamic finance forbids indefinitely growing interest. Sharia finance agreements involve fixed fees or equity shares. Late penalties can be collected but must be donated, not profit. In all cases, the borrower never owes to the lender for the lender to keep more an a fixed amount determined at the strat.

You seem to not get how pervasive and evil the Chinese State is at making everything thing shit for citizen world wide. This is one of the reasons.

Most white-collar/knowledge-service-industry work is a weird type of work.

It's fundamentally about enabling things and largely middleman-type stuff. I have a hard time imaging what "At some point the top end may be too valuable to even sell access to." would even look like? What are you doing with that AI power, and who is paying for the output and why?

Elon probably isn't gonna spend that much on a model that can generate him ever-better fake porn but does nothing that he can use to sell stuff to other people. Especially in a world where open models are "good enough" for many things like "tell me how to fix the plants in my garden that are dying" and the like. What remains in the narrow knowledge-work space of: can't be done by an individual or small group themselves, but is valuable enough that it would make sense for people to hoard access to these extreme frontier models? Try to recreate Hollywood-as-a-monopoly by becoming the single content producer for everyone's individualized feed and so owning all the advertising budget in the world? Seems hard, we've already seen how easy it is for cheap-and-crappy-but-addictive-or-funny content to disrupt traditional media.

(There's also pure scientific research, but historically that's not very directly connected to "massive profit" and has a habit of leaking out and getting productized most effectively by other people or just being really easy to copy once someone shows how it's done.)

Robotics could be a different story, as physical labor can be more inherently productive, but "reasoning" advantages are unlikely to be a big long-term differentiator there. At some point the brick laying robot is satisfactorily building the structure, and you're good.

A huge amount of the value of "the economy" and the power of a currency is driven by circulation of money, and one thing that all the "bullshit jobs" white-collar/service-industry work does is keep the money moving and ensure that a lot of people have some good-or-services of value to exchange. If you take away the ability to offer services worth exchange from huge chunks of the economy in these super-frontier-models-replace-everything scenarios... you're gonna have a bad time?

> The reason is that the leaders likely will be able to accelerate faster

Model improvement is already hitting diminishing returns, and people aren't willing to pay substantially more for a slightly better model. There's no "accelerating away" when the new models don't open up a huge new market. If anything, the companies burning huge amounts of money on marginal improvements will be undercut by companies happy to sell current models at a significantly lower cost.

Glm 5.2 very much argues against that. Opus 4.8 level quality for cheap. That’s sufficient for most tasks, so if/when you do need SOTA models you can spend more for specific tasks but otherwise rely on the cheap but still plenty good models for everything else

The issue is who is going to pay for access?

The model has to be sold for cheaper than the value it adds.

Or your customers will bleed out financially.

EDIT: rethought entire premise.

If you can use mountainous capital to sell at a loss in order to distort the market, yes, that's not a "Free Market", as in, the vaguely understood competitive marketplace armchair economists idealize.

True freedom in the market means the freedom to capitulate your wealth to snake oil salesman and schemers who operate on generational timeframes until economic power consolidates and renders your society into de-facto tyranny. Before any sort of regulations existed, we were all trading shiny rocks with ultimate freedom, and that somehow has produced a bunch of economic situations in the modern day that a ton of people don't like.

What's more interesting to me is freedom from the need to have investigative journalists doing deep dives into potentially fraudulent, thieving, or scheming companies behind every purchase, and to know that what I'm granting market success to is exactly what my money or time is going towards - I'm not buying something at a loss that funds some other deliberately obfuscated project that's made opaque from my perspective of the market transaction.

The proverbial "market wisdom" doesn't emerge out of markets with extreme information asymmetry.

Externally subsidized predatory pricing is the opposite of a free market — precisely because it sells things at below market rates.

Free markets are where players compete on quality, efficiency, and supply. Prices are a result of cost and supply and provide real information on these factors. Competition for customers selects the most effective and efficient producer.

Sustained efforts of selling at a loss to gain market share is the exact opposite. The entire purpose is to corrupt the free market by sending false price signals which SUPPRESS free market competition and push market share to whoever can burn the most capital (whilst providing an actual service/product), not whoever is most efficient or highest quality or lowest actual price provider.

Uber and AirBnB are better examples of your "selling at a loss to gain market share", where they burned capital to undercut prices for close to a decade on falsely low pricing to destroy incumbents.

Spending on R&D while developing expensive technology is different and arguably very much a part of a free market, and is not what I was talking about.

Spending capital to steal your competitors' technology, and then spending more of it to make it available at below-market rates, is absolutely not a free-market activity.

Just because it is not stopped by someone enforcing a free market, does not make it a free market.

So it's a proxy.

Do you think you can re-stream cable TV or Netflix to your own paying customers at a cheaper price?

No, I mean that dodgy Chinese firms are cheating their customers:

> Because users’ inputs and model outputs are mediated through a proxy, users cannot verify which model their request was actually routed to. A user selects Opus 4.7, but the proxy can silently route to Sonnet, Haiku, or, in the worst case, GLM or Qwen, and fraudulently relabel the output. In a recent paper from Germany’s CISPA Helmholtz Center for Information Security (which cited my article last year on grey market!), researchers audited 17 API proxies and found widespread model swapping–API proxy access to “Gemini-2.5” achieved only 37.00% on a medical benchmark, a staggering drop from the 83.82% performance of the official API. On the user end, the tell only comes on complex tasks, when the output feels off (often referred to as 降智, or “dumbed-down”), but there is no clean way to prove it. Numerous public records highlight concerns that certain API proxies have noticeably compromised model performance. These proxies are suspected of “diluting” (掺水) services by substituting premium frontier models with inferior tiers.

> Besides model swapping, overconsumption of tokens also makes the price per token cheaper, though at the expense of driving up the total cost. Some of it is structural, as proxies that rotate accounts frequently destroy cache continuity as a side effect, forcing users to burn full-price tokens on context that would otherwise be nearly free. Some of it may be deliberate as the proxy providers try to milk more usage. The line between the two is difficult to draw from the outside.

https://www.chinatalk.media/p/how-to-buy-cheap-claude-tokens...

I mean, which lawyer caste do you respect? Is that one is cool with stealing credit cards to buy Claude subscriptions?

> 3. At an Italian airport: Constantly stealing bags, opening them to pick out MacBooks and credit cards, a credit card manufacturer-who sells stolen "black" credit card info to transfer stations— is racking his brains to save you money.