Comment by adventured

China isn't undercutting anything. Kimi has to be hosted somewhere and is extraordinarily expensive to operate at Fable-levels of capabilities. The moat is (and will always be) the cost to actually operate these models, and that cost will continue to soar, it will not reverse, and the hardware will never keep up such that at-home use somehow becomes economical.

It's like releasing a cutting edge search engine, proclaimed to be on par with Google. Oh yeah, I forgot to mention, you need to actually run it somewhere. One of the core moats for Google has been the cost to scale and compete globally with a search engine, which only a few entities on earth could even attempt. Somehow the HN crowd forgets this every single time. The same claims were endlessly made regarding Uber, as though the app was the hardest part of competing with Uber. Here's a hint: the model isn't the only super hard part of the total process at this point. Try running something akin to GPT 5.6 for a billion users, see how much that costs.

The winners will be the owners of the subscriptions and API usage. That's going to be OpenAI and Anthropic as of now, possibly Google will stay in the fight with their scale advantage focused on the consumer. It will never be the open weight models out of China. Who is going to invest the trillion dollars into infrastructure needed to run the latest version of Kimi 3-5 years out, for a billion users? There's only one entity that would ever consider it, and that's China domestic.

And the real money (for a sustainable business model allowing for constant massive reinvestment & infrastructure maintenance) is in pairing up advertising, which is another spot where the open weight models from China will never compete. It doesn't matter if the HN crowd hates this outcome, nothing will stop it from being the future core of mass consumer usage. And the business use will stay with subscription + API use as well: the best option for that today is OpenAI and Anthropic.