Comment by maxglute
12 hours ago
This really not that hard.
Deepseek started as Liang's side project funded with his hedgefund couch change compute. That set the economics for everyone else in PRC. If deepseek releases for free because Liang doesn't give a shit about making $$$ on his hobby, every other PRC player has to follow. And serendipitously, due to US export controls, PRC tech companies can't dig themselves into ruinous seppuku debt buying compute even if they wanted to - what they can buy, i.e. everything around DC infra including power, they get for fraction of the cost expediently.
TLDR Liang said fuck profits... which means every other PRC competitor had to fuck profits, which ends up fucking profits of western labs so deep in debt due to rampant financialization and can not afford to say fuck profits.
Sometimes a billionaire is fine just burning $$$ on a hobby while remaining a billionaire instead of trillionaire, and it just so happens the side effect might mean preventing others from being trillionaires as well. Bonus others is geopolitical adversary who is hedging economy on trillion $$$ returns.
I'm still not understanding why one hobby projecing being open source means others should also be open source. So you're saying that PRC is making a bet against US companies and the US markets to crash them in order to stifle the US economy? That is an interesting take, I would think the US market is far more resilient than just the tech stocks. Speaking with my communist friends though, it does seem like this is the ultimate goal: Topple the US hegemony and US foreign control by crashing it's economy while China makes a bet on free/cheaper AI models, with the ultimate goal of agitating the people enough to cause a revolution to turn the US into a communist state (really delulu stuff if you ask me)
Seems kind of pointless? Wouldn't anyone in the US/western world simply use the chinese models in their own inference? That would not strengthen the Chinese position because the models got downloaded for free off HuggingFace, and then cloud inference bills would just put money into US companies.
Which of my words implied any of this?
One person's hobby started the industry in PRC and set the trend and inspired talent in nascent field with no established business model. PRC competitors didn't want to FOMO and just knew they had to compete with opensource and everyone fast followed. They bought what limited compute they could, hired what talent they could and just told them get to work. There's a reason even Chinese Uber / DiDi was releasing open source models. There wasn't some grand coordinated posture to compromise US markets, it's incidental to PRC industry being PRC industry. Very few in PRC thought they could close gap this fast with compute deficit. US chose to continuously dump venture $$$ and company warchests quarter after quarter on their own to increase exposure. There's no grand conspiracy to turn US into communist state (wut), there is not "bet", just typical PRC domestic involution business shenanigans clashing with US financialized VC shenanigans. In alternate world if PRC models not competitive, open source wouldn't even matter to US valuations. In alternate world if PRC models competitive and US AI isn't leveraged to shit to multiple % of gpd, i.e. systemic contagion risk, it also wouldn't matter.
It doesn't matter if US/west makes $ off PRC models, PRC doesn't have enough indigenous compute let alone spare to meaningfully compete globally. In so much it matters economically (again happy happenstance for PRC) is denying US AI making $$$$$ while spending $$$$ vs US AI making $ while spending $$$$. Extra happy happenstance that $$$$ US spending on is basically all the VC money and FAANG warchest stockpiled by US tech over decades... i.e. US spent so much that it meaningfully constrains private money to spend more in future. Meanwhile PRC AI spending $ to make $ (or less), but still have $$$ in reserve for other shit. It also doesn't help that half of business model depends on building infra on tight schedule that US is... not great at.
Ignoring all the slop out there, we are seeing AI being sent to reverse engineer, accelerate projects, etc.
According to Greek economist and former finance minister Yanis Varoufakis, an open source AI strategy is one way a capitalist economy can avoid the rent trap (platforms being created, monopolizing resources, and extracting ever higher rents from everyone else).
https://www.yanisvaroufakis.eu/2026/08/31/ai-is-reviving-chi...
[dead]