If you want a direct example of the US subsidising a major AI lab, we can use Microsoft's investment in OpenAI. Microsoft has the largest ownership stake - 27%.
Microsoft did not pay with money - it paid (mostly) with Azure cloud computing credits. MSOFT is then able to write this off as a loss against tax.
It is generally far more tax-efficient in the US to write a loss in this way than it is to write a loss for a cash investment.
In this case, I believe the difference was ultimately highly significant. When including MSOFT eventually writing-off the deprecating Azure hardware it had used to buy the OpenAI equity, the result was MSOFT's tax reduction being either close-to or exceeding the actual cash value of MSOFT's investment in OpenAI - IIRC.
These examples represent taxes that the US chooses not to collect - the US could choose to make investments like these less tax-efficient. Instead, by making them extremely tax-efficient, the US subsidises the transaction hugely.
Even ignoring monetary subsidies, there are the non-monetary ones: not being sued into oblivious by the government for their countless hacks of other companies and countries, the slaps on the wrist for massive piracy, the waving of environmental (and other) regulations in order to allow their data centres to be built an operated.
That's what I'm asking - which monetary subsidies?
> not being sued into oblivious by the government for their countless hacks of other companies and countries
That isn't normally how enforcement works, and it hasn't been very long since they disclosed those breaches. If the victims want to pursue legal action, they can, and they still may!
> the slaps on the wrist for massive piracy
So judges and juries are involved in the subsidization conspiracy, too?
> the waving of environmental (and other) regulations in order to allow their data centres to be built an operated
Sure, though if you think this isn't happening in China too, I have a bridge to sell you.
The original comments is "DeepSeek, and other Chinese models, are heavily subsidised by the Chinese government"
> That's what I'm asking - which monetary subsidies?
I am listing for you the non-monetary subsidies, which are just as real and equally important.
> not being sued into oblivious by the government for their countless hacks of other companies and countries
If it was one of the Chinese labs doing this hacking, the government would be stepping in. If it was European labs they'd be stepping in. If it was you or I the government would be stepping in. That is a massive subsidy (they don't have to worry about the same legal fees and exposure) and being allowed to continue doing business is in fact priceless.
> So judges and juries are involved in the subsidization conspiracy, too?
There is no conspiracy. They are objectively operating by a different set of rules than you or I could operate in this market.
> Sure, though if you think this isn't happening in China too, I have a bridge to sell you.
I never said it wasn't, I'm saying that it's happening here and it's a very real subsidy.
I heard someone calling the key metric in Anthropic financial reports EBBT: Earnings Before Bad Things[1] :-)
[1] Where "Bad Things" would be the typical interest, taxes, depreciation, amortisation plus the Anthropic specific employee compensation, LLM training (you know, for the LLM lab), revenue sharing agreements (which is a form of paying for infrastructure), etc.
A recent YouTube video by Patrick Boyle said the same thing. They are only profitable if you ignore all the costs that make them unprofitable such as paying employees and developing A models.
Indirect subsidies are an accepted economic concept and well studied. The posts you replied to are obviously talking about indirect subsidies and dismissing them because they didn't say "indirect" everywhere is just sophism.
The government, specifically Trump's government and the current money circle in AI inflating American company stocks. In addition to all that American models do not share their papers like Deepseek and Qwen do. So you can literally say Chinese models are doing it for charity at this point.
The US regime, which includes the ruling class: the US VCs and megacorps are just as much of an extension of the US regime. They're incredibly intertwined.
If you want a direct example of the US subsidising a major AI lab, we can use Microsoft's investment in OpenAI. Microsoft has the largest ownership stake - 27%.
Microsoft did not pay with money - it paid (mostly) with Azure cloud computing credits. MSOFT is then able to write this off as a loss against tax.
It is generally far more tax-efficient in the US to write a loss in this way than it is to write a loss for a cash investment.
In this case, I believe the difference was ultimately highly significant. When including MSOFT eventually writing-off the deprecating Azure hardware it had used to buy the OpenAI equity, the result was MSOFT's tax reduction being either close-to or exceeding the actual cash value of MSOFT's investment in OpenAI - IIRC.
These examples represent taxes that the US chooses not to collect - the US could choose to make investments like these less tax-efficient. Instead, by making them extremely tax-efficient, the US subsidises the transaction hugely.
This is a joke right?
Even ignoring monetary subsidies, there are the non-monetary ones: not being sued into oblivious by the government for their countless hacks of other companies and countries, the slaps on the wrist for massive piracy, the waving of environmental (and other) regulations in order to allow their data centres to be built an operated.
> Even ignoring monetary subsidies
That's what I'm asking - which monetary subsidies?
> not being sued into oblivious by the government for their countless hacks of other companies and countries
That isn't normally how enforcement works, and it hasn't been very long since they disclosed those breaches. If the victims want to pursue legal action, they can, and they still may!
> the slaps on the wrist for massive piracy
So judges and juries are involved in the subsidization conspiracy, too?
> the waving of environmental (and other) regulations in order to allow their data centres to be built an operated
Sure, though if you think this isn't happening in China too, I have a bridge to sell you.
CHIPS act, OBBA, defense, AI upskill grants.
That's just the ones i know off the top of my head in the US. Those programs account for more than 60 billion in committed spend.
The original comments is "DeepSeek, and other Chinese models, are heavily subsidised by the Chinese government"
> That's what I'm asking - which monetary subsidies?
I am listing for you the non-monetary subsidies, which are just as real and equally important.
> not being sued into oblivious by the government for their countless hacks of other companies and countries
If it was one of the Chinese labs doing this hacking, the government would be stepping in. If it was European labs they'd be stepping in. If it was you or I the government would be stepping in. That is a massive subsidy (they don't have to worry about the same legal fees and exposure) and being allowed to continue doing business is in fact priceless.
> So judges and juries are involved in the subsidization conspiracy, too?
There is no conspiracy. They are objectively operating by a different set of rules than you or I could operate in this market.
> Sure, though if you think this isn't happening in China too, I have a bridge to sell you.
I never said it wasn't, I'm saying that it's happening here and it's a very real subsidy.
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Investors, but also the government in allowing these companies to siphon electricity away passing the increased cost to the consumers
>Investors, but also the government in allowing these companies to siphon electricity away passing the increased cost to the consumers
Not arbitrarily banning companies from buying a product from a supplier doesn't meet my definition of the term "subsidy".
Fair enough, but it sure meets the definition of 'helpful intervention'.
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By investors. OpenAI and Anthropic are not profitable (Anthropic is profitable if you allow them to invent what profitability means).
I heard someone calling the key metric in Anthropic financial reports EBBT: Earnings Before Bad Things[1] :-)
[1] Where "Bad Things" would be the typical interest, taxes, depreciation, amortisation plus the Anthropic specific employee compensation, LLM training (you know, for the LLM lab), revenue sharing agreements (which is a form of paying for infrastructure), etc.
A recent YouTube video by Patrick Boyle said the same thing. They are only profitable if you ignore all the costs that make them unprofitable such as paying employees and developing A models.
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Investment is not a subsidy. Words still have meanings. Nobody in this thread has successfully answered the question: subsidized by whom?
Non-punishment is also not a subsidy; again, words have meanings. Let's use the correct words.
Indirect subsidies are an accepted economic concept and well studied. The posts you replied to are obviously talking about indirect subsidies and dismissing them because they didn't say "indirect" everywhere is just sophism.
But some investments are subsidized (tax liabilities) among all the other things.
The government, specifically Trump's government and the current money circle in AI inflating American company stocks. In addition to all that American models do not share their papers like Deepseek and Qwen do. So you can literally say Chinese models are doing it for charity at this point.
Of course you can say that, but you literally cannot be serious if you do!
Can you say a US company donating to a non-profit and writing off taxes on the basis of it is donating to charity?
Would you say you could be serious in stating this?
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Oh I am serious!
The US regime, which includes the ruling class: the US VCs and megacorps are just as much of an extension of the US regime. They're incredibly intertwined.
Capitalistic exploitation against the working classes.