Comment by capevace
5 days ago
But isn‘t the whole argument of „winner takes all“ already dead, if china is such a big threat that the US labs need import controls?
Distilling or not, they are clearly close enough to the frontier, that the supposed „free market“ country needs market controls. That may work for US markets. But not the rest of the world.
Idea: petrodollar policy becomes „tokendollar“, enforced by US military dominance. If you force me to pay altman at gunpoint, then maybe ill stop using kimi
They are simply out of ideas to keep the most expensive party in the history of mankind going.
That's it. Simple as that. When you grasp for straws in panic mode, you don't exactly spend time strategizing and weighing the pros and cons of each straw carefully.
It's going to force American companies to only use inferior and more expensive models.
It's protectionism which will only extend our dominance by at most a decade.
The rest of the world will progress without us.
Decade? We're 4 years in since ChatGPT released publicly and have gone from "Wow this thing is stupid" to running coding agents on auto mode, and the Chinese labs have been around for even less time. The US providers may lose dominance in 1 or 2 years.
> may lose dominance in 1 or 2 years
In some portions they already lost dominance. My claude will happily generate disgustingly vulnerable code then flag me for ToS violation when I ask it to make sure the code that it just made, in the same context window, in the same conversation is safe and doesn't have glaring holes. Also great to be charged $xx.xx+ amounts and then it refuses to answer without refunding it.
They won't. China doesn't have the training capacity and the quality data sets, the former because of access to fabs, the latter because of internal censorship that is getting worse by day.
Simple as that.
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I’m talking about our overall economic dominance.
We’re still the most powerful economy on earth, but I can’t imagine this continuing forever.
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> the supposed „free market“ country
Good scare quotes. The US hasn't been free market in the Adam Smith sense in ages, if ever.
well free markets meant something very different in adam smith's time; what they meant by free was 'free from rents' whereas today its usually mean in the milton freedman terms as 'free from any interference' which is how i interpret the parent poster...
https://en.wikipedia.org/wiki/Free_market#Classical_Economic...
D: "I want to be free" by Milton Schulman.
H: Milton Friedman.
D: Why are they all called Milton? Anyway, I've only got as far as Milton Keynes.
H: Maynard Keynes.
D: I'm sure there's a Milton Keynes.
H: Yes, there is, but it's... [appears quite miffed]
https://www.youtube.com/watch?v=KgUemV4brDU
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It's not free from interference either. It requires enforcing antitrust, for example, which the US seems to have forgotten. Literally what you quoted:
> the term free market refers to a market free from all forms of economic privilege, monopolies and artificial scarcities.
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> free from any interference
That’s even less true in the US these days, though
This Schroedinger's Freedom is getting tired now. They happily label themself as free-market democratic liberal progressive when you're justifying bombing a poor third-world country, but suddenly claim to be unfree undemocratic oligarchic whenever anyone asks them to act on that principle.
Adam Smith himself knew you had to constrain the market in ordner to protect capitalism from capitalists. His work didn't end with his first book.
Yes, it’s freedom both from state interference but also from monopolies, oligopolies and trusts using their position to suppress the competitiveness of other market participants. Which is generally impossible to prevent without the state interfering in the markets.
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How could you tell how close they are to the frontier if they weren't distilling? Clearly those labs think distilling is worth it despite the large effort they need to go through to bypass anti distillation techniques used by the frontier labs
Anthropic is “distilling chinese models”. Everyone uses outputs from every other frontier model in both pre training and post training, hilarious to give it this name and pretend like it’s an attack. Fable is just a distillation of stolen copyrighted works, etc.
You‘re reading it wrong.
I’m saying it doesn’t matter wether they did or not, because now they clearly have models which can compete.
The argument is - these models costs hundreds of billions to develop - to BOTH US and China. China is giving them for free despite not making financial sense because they want to weaken US's tech firms ability to compete - because China sees AI dominance as critical for their national security.
The US also sees AI dominance as critical for their national security, and relies on a market economy and non-state-owned labs. This means that these frontier labs are truly susceptible to "predatory pricing" (economic term for a competitor selling at a loss to eliminate you), which is illegal in the US and any other free market economy exactly because of its implications on market efficiency.
I hate it just as much as the next guy, but the fact the discussion here ignores the fact that these concerns and dynamics are real just lower the discussion level instead of actually discussing potential solutions.
With that said, what I'm worried about is that the government solution will be far more hostile than some semi-ban on open models. An example of an even worse scenario, they could take over frontier labs and restrict access to everyone in the public (which might still not solve espionage).
> China is giving them for free despite not making financial sense because they want to weaken US's tech firms ability to compete - because China sees AI dominance as critical for their national security.
Nobody is making this argument because this is a normal thing that companies do. It's so common it is named in business strategy: "commoditize your complements."
There's a 2002 Joel On Software post explaining this using tech examples that were already old in 2002[1].
In the present, Meta is doing exactly the same thing with Ollama as Alibaba (who is funding some of the Chinese labs). Alibaba needs advanced models internally, and does not want to have a dependence on US models that can be arbitrarily shut off by Washington. Alibaba also wants to drive usage of its cloud among companies who are now demanding competitive AI models (which Alibaba may be locked out of providing). However, selling AI is not its core business. Putting cheap AI in the world creates demand for cloud services, which is part of Alibaba's core business.
Not only does this make financial sense for Alibaba, it is fairly basic.
Google gives away consumer software like Chrome and Android (not their core business) to drive search, which is their core business.
et cetera. The frontier labs are exposed in exactly the same has been way every pure play tech company before them. The US labs chose quality as their moat; remains to be seen whether that was a good choice, or if they can add another moat in time.
1 - https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/
> Putting cheap AI in the world creates demand for cloud services
No, Alibaba doesn't have the right amount of hardware to serve these models.
The part that benefits Alibaba in these open models is to maintain its public reputation so as to maintain its stock price. The core that drives everything else inside Alibaba is its e-commerce.
> Nobody is making this argument because this is a normal thing that companies do. It's so common it is named in business strategy: "commoditize your complements."
It is common in business strategy, far less so in nation-state governance.
The reason you, me, and so many people in the United States still have a far better quality of life and level of freedom than most people in China is because it’s bad to run a country like a business, full stop. When you do so, you kill far more people.
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> The US also sees AI dominance as critical for their national security, and relies on a market economy and non-state-owned labs.
[...]
> but the fact the discussion here ignores the fact that these concerns and dynamics are real just lower the discussion level instead of actually discussing potential solutions.
We had this problem solved for DECADES. Build the best post-secondary education system in the world. Lure all of China's (and the rest of the world's) best and brightest. Educate them. Give them well deserved, high paying jobs doing what they love and invite them to build a life and stay here.
Now we appear to be busy dismantling that system.
Took me a while but for the west the value of education isn't primarily in jobs but in democracy. It puts the bar much higher than we've ever accomplished. People are supposed to run th county (believe it or not)
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I think the misconception here is that they "give them away".
Sure, you can download the weights and run it yourself, but to run a 1T+ parameters you need roughly 2TB of VRAM (for full precision). That costs around $500k to $1M, not including electricity and rent.
In reality, they provide their models priced via API or subscription just like any other company. The "free weights" are only useful for other research labs. It seems that China understands that research should be shared and open, which is one of the reason that AI has been able to develop that fast in the last 10 years.
> free weights" are only useful for other research labs
No, they are useful for any compute provider who can host these models and sell inference. Which effectively puts a cap on whatever the Chinese companies can charge. So longterm that means that their margins are limited to cost + some low margin.
If they are making money by selling tokens then anyone who has sufficient compute to host their models can make more than the Chinese labs since they don’t have any R&D costs.
I mean I think the primary reason is really the attention is all you need paper and meta's "leaking" of meta's llama.
China is plenty happy to steal IP and just say "this is just how business is done in China it's a cultural thing" but quickly run to defend their own IP in western courts when stolen by western businesses. It works one way.
And I have experienced this firsthand when having something manufactured there. Exact clones appearing on Alibaba just days after.
> costs hundreds of billions to develop - to BOTH US and China
OpenAI and Anthropic are extremely bloated compared to the Chinese labs. They have thousands of extremely well paid people working for them. Deepseek I think has a couple of hundred and I doubt they are paid a lot.
Of course compute for training is expensive but I doubt that’s necessarily the overwhelming majority of the operating costs for Anthropic/OpenAI
> on a market economy and non-state-owned labs
Sure the private companies developing these models are heavily interlinked with and even maybe partially owned by the government. But its a matter of degree. Since that’s the situation in the US similar in how these companies both shape government policy directly and in how the government is constantly intervening and shaping their behavior outside of any regulatory framework.
The US government is both heavily protectionist and interventionist these days.
> next guy
Good try GPT-5…
> "predatory pricing" (economic term for a competitor selling at a loss to eliminate you), which is illegal in the US
It is very funny that this was/is the playbook of a huge number of successful, VC-funded, "disruption" plays.
Cheap cabs that undercut the market, wait for taxi companies to die, raise your rates now that your "rideshare" app got everyone hooked on the subsidized rate, IPO!
The software landscape is full of free products that are used to upsell other services. In this case the upsell is inference at data centers. China has built a big advantage in Green energy and is working at the GPU issue both on the hardware and model level. Those are the two main cost inputs into AI and should allow China to compete. The exact model being used is not going to matter as much as the cost that companies must pay.
> This means that these frontier labs are truly susceptible to "predatory pricing" (economic term for a competitor selling at a loss to eliminate you)
OpenAI and Anthropic were losing money too until recently, when they started focusing more on increasing revenue (which is also part of why companies are now looking more at Chinese models to reduce costs).
That's nonsense, people pretend that a "frontier model" is the most important technology ever, but we know for sure it cannot be because several companies are doing copycats of one another. It is not China that is doing much effort to copy-cat, it's the US companies that are copying one another. The only real barrier in this technology is how many Nvidia chips you can buy and how much data you can get to train your LLM. All these models are basically moving in the same trajectory, it is essentially a very expensive copy-paste job they're doing.
US didn't have that much rational reasoning when it killed Japanese exports in cars, chips, and finally software. That in turn lead to China simply taking the seats Japan used to occupy, but as far as imposition of these protectionist means is considered, US does not need that much sophisticated justification internally.