Comment by program_whiz
20 hours ago
this suffers from the same prisoner's dilemma we already see at play. Any player can defect and in theory capture a "trillion dollar market". Once they IPO, then their service is to maximize (short term) shareholder value. Saying "we reject all the billions in recurring subscription revenue because we are hoping all AI providers will do the same, therefore creating a moat" isn't going to go over well.
The SOTA model dilemma is that you have to pay more and more to train models that focus on less and less of the AI task market, because 95% of tasks can be done by cheap small models.
I think GP's thesis is that selling only to the US government would preserve their moat by preventing distillation.
Also frees up more compute for recursive improvement, and gives them leverage over USG (makes regulatory & legal & other issues disappear) due to the frontier being significantly more effective for military use. There's a lot of chatter around distilled models being "close" to the frontier, but realistically they are optimized only to look good on benchmarks - and are still 6 months behind Anth / OAI models at that.
If the US government is a monopsony buyer, why would it choose to pay high prices?
Because (a) it prints money so why not and (b) the model actually has some capability it doesn't want anyone else to be able to access.