Comment by gpt5
4 days ago
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.
> It is common in business strategy, far less so in nation-state governance.
It is not clear why this is bad for Alibaba or China, could you expand on that?
> it’s bad to run a country like a business
The "Chinese miracle" resulting from China's integration with the global economy has lifted ~800 million people out of poverty and raised standards of living quite rapidly overall. A lot has been written on the topic, but suffice to say that it's a fairly unorthodox argument to make that the Chinese have not been well-served by the arrangement.
> level of freedom
The context of this discussion is whether the US government should prevent US citizens from accessing yet another product that is freely available in the rest of the world, to benefit a tiny handful of rich people in California.
Let me be clearer: if you do not hold stock in OpenAI or Anthropic, you likely stand to benefit from more AIs being provided by more providers. Imagine if the government had banned MySQL and PostgreSQL, so we all had to buy databases from Oracle and Microsoft. That would be strictly worse for everybody except employees of Oracle and Microsoft. This is exactly the same thing.
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> 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
I think it's because every single time the farmers in south america or the philippines try to organise and get out of poverty you guys either bomb them or arm some terrorist to kill them.
But sure tell yourself otherwise if that makes you feel better.
> 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
Whether this is true or not is still open to debate, but the fact that it’s presented as some kind of absolute truth that needs no substantiation is simply ridiculous.
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"you, me, and so many people in the United States still have a far better quality of life and level of freedom" LOL - are you sure about this?
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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.