A company making a decision to allow use of chinese models is a company also choosing to send tons of various credentials to chinese model companies. These will just get scooped up, OpenAI and Anthropic can probably hack into anything at this point if they wanted to.
Who's afraid of Chinese models?
301–310 of 965 posts
Re: Who's afraid of Chinese models?
#302The 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…
I would say it's not just the VCs but the various other entities that will be left holding the bag of debt if the AI-fueled datacenter construction boom/bubble pops. For a list of large and well known projects and their scales:
Re: Who's afraid of Chinese models?
#303Earlier quoted context omitted.
Ben's article "distills" down to 2 reasons that US frontier labs shouldn't be "afraid": 1. US frontier lab unit economics are better 2. US frontier labs are moving up the stack making tools that are "stickiness" and will prevent users from switching. For 1...he doesn't provide any evidence for US lab unit economics being better...the major input to unit economics is electricity...which is cheaper in China. And buildi…
Cost of electricity isn’t a long term advantage in my opinion. Private companies will figure it out. What matters most is $/completed task. It does seem like OpenAI and Anthropic are winning here even with worse electricity rates. Perhaps it is made up by the efficiency of Nvidia and Broadcom chips, which China can’t get in mass. I do think that OpenAI and Anthropic are moving up in stickiness. My company has rallied…
> Private companies will figure it out.
Across sectors, China added 543 GW of energy in 2025. Next year, USA is expected to add between 70 and 80 GW of energy
Re: Who's afraid of Chinese models?
#304Earlier quoted context omitted.
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…
Ben's article "distills" down to 2 reasons that US frontier labs shouldn't be "afraid": 1. US frontier lab unit economics are better 2. US frontier labs are moving up the stack making tools that are "stickiness" and will prevent users from switching. For 1...he doesn't provide any evidence for US lab unit economics being better...the major input to unit economics is electricity...which is cheaper in China. And buildi…
In a corporate setting yes Opencode all the way. However in a non corporate setting I am getting $3000 of api usage a month for $100 at Anthropic and only use open code for the smallest cheapest tasks
Re: Who's afraid of Chinese models?
#305The 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…
Yea but at those rates VCs will never make their money back. Because Deepseek and friends keep releasing the inference optimisations to everyone instead of holding them back to pay their investors.
Re: Who's afraid of Chinese models?
#306Earlier quoted context omitted.
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…
Ben's article "distills" down to 2 reasons that US frontier labs shouldn't be "afraid": 1. US frontier lab unit economics are better 2. US frontier labs are moving up the stack making tools that are "stickiness" and will prevent users from switching. For 1...he doesn't provide any evidence for US lab unit economics being better...the major input to unit economics is electricity...which is cheaper in China. And buildi…
He’s glossing over the reason they are not: 90% profit margin of Nvidia. Power is only a small part, single digit, it will eventually matter but does not really today.
What is the cost of AI? The single largest ingredient is Nvidia profit margin.
Huawei accelerators are not as efficiency yet, but they don’t nearly extract as much margin.
Why would future revenue stay with the labs given this situation? This whole thing had an airline industry sized red flag on it that makes investing into frontier lab about as sexy as investing in United.
Maybe the token economy is some kind of reverberation of the airline reward miles economy, the emergency hatch to be able to survive under maximal supplier extraction (Nvidia is just the top of a monopoly stack here, even if they replace those chips, the HBM, ASML, Foundry layer can get their dues)
Re: Who's afraid of Chinese models?
#307Earlier quoted context omitted.
The US does not lag behind in energy. Industrial electricity prices in most places in the US are competitive with China, or even cheaper.
Links please.
IEA’s chart for “final electricity price for large industrial customers in energy-intensive industries” [1] shows the US cheaper than China, but this is using data from Texas as representative. I’m not sure how they back this representation up, or how different this is from GPP “business” prices. So “most places in the US cheaper than China” may be wrong, but certain states or regions are at least competitive.
Re: Who's afraid of Chinese models?
#308Earlier quoted context omitted.
Same thing happen for western models, try to ask about Gaza genocide and see for what side it will stand
What am I trying to understand about the western models on the term "Gaza genocide"? I asked Grok "Tell me about the gaza genocide" and it write a IMHO balanced answer comparing why genocide is and isn't the right term. [0] ChatGPT 5.6 Sol only explained why people call it a genocide and did not go in as in depth as Grok did for why people don't agree with the term. [1] The only unsaid response (to me) here is the mo…
This kind of response is predictable, since these models are tuned to align with one side of the issue. A recent example: Grok answered a similar question and was suspended shortly afterward [1]. Furthermore, a UN commission has formally concluded that it constitutes genocide [2] — a fact that Western AI models rarely mention, let alone link to directly.
[1]: https://www.aa.com.tr/en/science-technology/xai-s-grok-tempo... [2]: https://www.ohchr.org/en/press-releases/2025/09/israel-has-c...
Re: Who's afraid of Chinese models?
#309Earlier quoted context omitted.
Links please.
This seems to show that even with China taxing industrial electricity to subsidize household electric bills it's still 30% cheaper for industrial electricity in China. [0] Those same taxes make household electricity about half the price of US power. If I had to wager why, I'd say it's due to embracing solar on massive scales recently. Only a few years ago the US was competitively priced. [0] https://www.globalpetrolp…
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Re: Who's afraid of Chinese models?
#310People who claim that the Chinese open weight models have some type of manifest advantage don't realize that the close weight models have a huge advantage as well: the researchers from OpenAI, Anthropic, Google, xAI, Meta are not dumb, they can read the white papers written by DeepSeek, Moonshot, etc, and they can inspect all those architectures and they can pick and choose the best tricks there are out there, and of…
If the Google and meta engineers are not dumb how come they consistently trail behind the frontier labs and even the Chinese labs with a fraction of the funding. Probably bad leadership
That plus they don’t distill so they have worse RL examples.