It's well understood at this point that China's results are simply not purely the result of distillation. They're the result of significant investment with a willingness not to make a profit any time soon. That's why distillation is not enough. Again, if it were that easy, then it would in fact be that easy. And all the evidence across the world clearly illustrates it's not. Even with distillation, it's incredibly expensive building a fully sovereign domestic frontier AI stack.
> Assuming open weight models continue to advance, who cares?
There's no reason to assume they will advance as fast as closed models. If the world is reduced to a single fully autonomous producer of true frontier intelligence (China), and everyone else is using open models produced from or distilled from the results of China, then two categories of AI inevitably emerge: open models and frontier closed models, the latter of which are known and controlled only by their sole producer. Given that progress is exponential, once competition is eliminated, one can reasonably expect an exponential gap in technology capability to emerge between China and the rest of the world. That is not a side effect but the entire point. It's the very goal being engineered right now.
> And if they close up, then fine, do what China did and build up a domestic industry and distill as a way to get a jumpstart.
"build up a domestic industry" will be about as easy as reshoring frontier manufacturing capability. That is to say, there's a threshold of "no return" after which it won't be possible at all without extremely painful re-architecting of the entire country's economic system to force a massive domestic development that said system no longer naturally incentivizes.