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Who's afraid of Chinese models?
211–220 of 965 posts
Re: Who's afraid of Chinese models?
#212What's wrong if the roles of USA and China are reversed in technology? Why does the rest of the world care? It's not as if USA has done a great good for the world, and China has evil intentions towards the world. Infact it is the opposite in the case of AI so far.
Re: Who's afraid of Chinese models?
#213The people who are most afraid of Chinese models are the VCs who poured into Anthropic and OpenAI at astronomically high valuations. Anthropic is valued at $1.2T and OpenAI is targeting $850B. These astronomical valuations were built on the premise that these labs would generate massive profits from premium API pricing, but the Chinese labs are completely undercutting this strategy by releasing excellent open models…
> The people who are most afraid of Chinese models are the VCs who poured into Anthropic and OpenAI at astronomically high valuations. Correct. These chinese labs has proven that having just the model is not a moat, and the safety concerns were all just attempts at regulatory capture. This is why labs like OpenAI and Anthropic are panicking and are racing to the exit before their valuations start being questioned.
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Re: Who's afraid of Chinese models?
#214According to openAI's own @deanwball: Even OpenAI isn't buying this distillation talk: https://xcancel.com/deanwball/status/2078133895766114412#m
> open models are inherently decelerationist I’m struggling to understand this perspective. Is he using the words accelerationist/decelerationist in a sense other than the obvious one? EDIT: I searched his twitter history and discovered that his argument is basically “if you drive down costs, then OpenAI will have less money to invest in development, slowing down the overall rate of AI progress.” IMO this take betray…
Nah, the point is that if models are commoditized and there's no hope of making significant profits, no one is going to be willing to make the massive investments necessary to continue pushing the scale frontier. How large a training run do you expect investors to fund out of the goodness of their hearts?
Re: Who's afraid of Chinese models?
#215The people who are most afraid of Chinese models are the VCs who poured into Anthropic and OpenAI at astronomically high valuations. Anthropic is valued at $1.2T and OpenAI is targeting $850B. These astronomical valuations were built on the premise that these labs would generate massive profits from premium API pricing, but the Chinese labs are completely undercutting this strategy by releasing excellent open models…
The (quite excellent) article discusses several of your points. If you haven't read it, I recommend it. - Commodity market profitability is determined by marginal cost of production. LLMs have marginal cost; traditional software does not. - Models are not free. Downloading them is free. Running them is not. This has manufacturing economics, not software economics; the idea that they are "free" is an economic category…
The thing I do not understand here because it seems obvious: AI will be a commodity market and you simply cannot have a large PE multiple. So the valuations imagine a global commodity monopoly or duopoly coupled with the increased intelligence still disallowing other suppliers from becoming competitive? Without any network effects to help?
Re: Who's afraid of Chinese models?
#216> It’s striking the extent to which Claude Code and Codex are proving to be quite sticky; whichever harness you start working with is likely to be the one you stick with, and that figures to be even more the case with non-technical users. My experience has been quite the opposite. I was using Claude Code almost exclusively this winter/spring and swapped to Codex earlier this summer. It took no time whatsoever to swit…
For personal use I agree. For companies, these decisions are very sticky. Companies go through a lot of red tape to get anything purchased and approved, then they discourage change because it's a lot of work. So the product that gets a foothold in a company sticks for a long time. Then a couple years later a sales person convinces an exec that they can save some money by switching, so the switching game begins. Not n…
I imagine the play here is going be connectors. Can you get slack to avoid integrating with anyone other American ai providers, same with Google suite, etc etc.
Re: Who's afraid of Chinese models?
#217I think in general rest of the world needs to take notice (not saying afraid), starting with the US. It cannot be taken for granted that China's frontier labs will be a few months behind. They might be at par or exceed. The lessons from steel, solar and EV needs to be learned by all lawmakers. You have to respect and learn from how China Government puts the system in place for complete industry takeover and they have…
Ok…
Re: Who's afraid of Chinese models?
#218I think in general rest of the world needs to take notice (not saying afraid), starting with the US. It cannot be taken for granted that China's frontier labs will be a few months behind. They might be at par or exceed. The lessons from steel, solar and EV needs to be learned by all lawmakers. You have to respect and learn from how China Government puts the system in place for complete industry takeover and they have…
What is this panic and protectionism supposed to be good for? This is open source software, there is no "AI industry", there's virtually nobody employed in this. "Domestic AI" makes about as much sense as a domestic Linux kernel. If the Chinese want to subsidize the world's water and energy use to supply the world with chatbots good luck to them. There's no need for guardrails or fast track data centers, they can plaster their entire country with data centers to churn out slop, I'm glad we don't
Re: Who's afraid of Chinese models?
#219The people who are most afraid of Chinese models are the VCs who poured into Anthropic and OpenAI at astronomically high valuations. Anthropic is valued at $1.2T and OpenAI is targeting $850B. These astronomical valuations were built on the premise that these labs would generate massive profits from premium API pricing, but the Chinese labs are completely undercutting this strategy by releasing excellent open models…
The (quite excellent) article discusses several of your points. If you haven't read it, I recommend it. - Commodity market profitability is determined by marginal cost of production. LLMs have marginal cost; traditional software does not. - Models are not free. Downloading them is free. Running them is not. This has manufacturing economics, not software economics; the idea that they are "free" is an economic category…
US running costs are higher than in China, because the US lags behind in energy, has higher real estate costs, and wage costs are higher.
Eventually we will hit a "good enough for cheap enough" and frontier models will hit diminishing returns (if they haven't already for a lot of types of work)
Don't think the rest of the world will sit on their hands while the US soaks up chips either, demand gets filled and if the US won't fill global demand for chips that's an opportunity to undercut again.
The other thing the rest of the world doesn't have to fund is the ridiculous valuations on these companies.
Unless you think the US can stay ahead just with model efficiencies, and that no one else will eventually match them, you are looking at the writing on the wall.
All that to say, the rest of the world is more than willing to eat your lunch, they have a dozen good reasons to, and they're already showing good results.
Just on the economics side, we've been here before too, US companies typically export their commoditization and live on brand royalties. Think all the cheap manufactured goods, the US doesn't make any of it. That's because the US can't compete on margins for numerous reasons, it's too expensive, I don't think AI is any different here except that the brands are currently valued in the trillions and I suspect that greed will be their undoing.
Re: Who's afraid of Chinese models?
#220Earlier quoted context omitted.
I'm arguing we can't trust retail prices because the marginal pricing isn't meaningfully connected to it anyway. But if we have to look at what we think margins might look like, DeepSeek continues to host v4 Flash at the existing price despite competitors beating it in price ( https://openrouter.ai/deepseek/deepseek-v4-flash ), so there's at least one example of a Chinese lab charging a predetermined price despite co…
>DeepSeek continues to host v4 Flash at the existing price despite competitors beating it in price ( https://openrouter.ai/deepseek/deepseek-v4-flash ), their competitors are discounted at around 33%, so it's safe to say that's the margin, maybe less if their competitors have worse caching or quantization. Meanwhile claude code/codex resellers selling tokens for 90% off API price, presumably by reselling usage from f…
discounted competitor could cheat. they can offer subpar model response and sell it as deepseek-v4. it is uneconomical to prove inference providers are cheating, so they get away with it. cheating inference provider does not care if their customers stay.