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This blows Decart's Oasis (which raised $25 million at $500 million valuation) and World Labs (which raised $230 million in complete stealth) out of the water.

This blows Decart's Oasis (which raised $25 million at $500 million valuation) and World Labs (which raised $230 million in complete stealth) out of the water. Google is firing warning shots to kill off interest in funding competing startups in this space. I suspect that in 6 months it won't matter as we'll have completely open source Chinese world models. They're already starting to kill video foundation model companies' entire value prop by releasing open models and weights. Hunyuan blows Runway and OpenAI's Sora completely out of the water, and it's 100% open source. How do companies like Pika compete with free? Meta and Chinese companies are not the leaders in the space, so they're salting the earth with insanely powerful SOTA open models to prevent anyone from becoming a runaway success. Meta is still playing its cards close to its chest so they can keep the best pieces private, but these Chinese companies are dropping innovation left and right like there's no tomorrow. The game theory here is that if you're a foundation model "company", you're dead - big tech will kill you. You don't have a product, and you're paying a lot to do research that isn't necessarily tied to customer demand. If you're a leading AI research+product company, everyone else will release their code/research to create a thousand competitors to you.

Workaccount2 2y ago
I strongly suspect that like open ai and O1, for profit companies are going to start locking down whatever advances they find. There is still an enormous amount of long hanging fruit that anyone can harvest right now, but eventually big advances are going to require big budgets and I can only imagine how technically tight lipped they will be with those.
senko 2y ago
> The game theory here is that if you're a foundation model "company", you're dead - big tech will kill you. You don't have a product, and you're paying a lot to do research that isn't necessarily tied to customer demand. Basically, the foundation model companies are outsourced R&D labs for big tech. They can be kept at arms length (like OpenAI with Microsoft and Anthropic with Amazon) or be bought outright (like Inflection, although that was a weird one). Both OpenAI and Anthropic are trying to move away from being pure model companies. > If you're a leading AI research+product company, everyone else will release their code/research to create a thousand competitors to you. Trillion dollar question - is there a competitive edge / moat in vertical integration in AI? Apple proved there was in hardware + os (which were unbundled in wintel times). For AI, right now, I can't see one, but I'm just a random internet comentator, who knows.
- refulgentis 2y ago
  I think not, it feels more like a utility to me until someone pulls their API.
mrandish 2y ago
> Chinese companies are not the leaders in the space, so they're salting the earth with insanely powerful SOTA open models to prevent anyone from becoming a runaway success. While it would be interesting if Chinese companies were releasing their best full models as an intentional strategy to reduce VC funding availability for western AI startups, it would be downright fascinating if the Chinese government was supporting this as a broader geopolitical strategy to slow down the West. It does make sense but would require a remarkable level of insight, coordination and commitment to a costly yet uncertain strategy.
- whiplash451 2y ago
  I don't think it requires a remarkable level of insight. The overall cost for the Chinese government is probably very small in the grand scheme of things. And it makes a lot of sense from a geopolitical strategy.
whiplash451 2y ago
The game has indeed become brutal for foundational model companies. I am less worried for AI research+product companies: they have likely secured revenue streams with real customers and built domain knowledge in the meantime.

Workaccount2 2y ago

I strongly suspect that like open ai and O1, for profit companies are going to start locking down whatever advances they find. There is still an enormous amount of long hanging fruit that anyone can harvest right now, but eventually big advances are going to require big budgets and I can only imagine how technically tight lipped they will be with those.

senko 2y ago

> The game theory here is that if you're a foundation model "company", you're dead - big tech will kill you. You don't have a product, and you're paying a lot to do research that isn't necessarily tied to customer demand. Basically, the foundation model companies are outsourced R&D labs for big tech. They can be kept at arms length (like OpenAI with Microsoft and Anthropic with Amazon) or be bought outright (like Inflection, although that was a weird one). Both OpenAI and Anthropic are trying to move away from being pure model companies. > If you're a leading AI research+product company, everyone else will release their code/research to create a thousand competitors to you. Trillion dollar question - is there a competitive edge / moat in vertical integration in AI? Apple proved there was in hardware + os (which were unbundled in wintel times). For AI, right now, I can't see one, but I'm just a random internet comentator, who knows.

refulgentis 2y ago
I think not, it feels more like a utility to me until someone pulls their API.

mrandish 2y ago

> Chinese companies are not the leaders in the space, so they're salting the earth with insanely powerful SOTA open models to prevent anyone from becoming a runaway success. While it would be interesting if Chinese companies were releasing their best full models as an intentional strategy to reduce VC funding availability for western AI startups, it would be downright fascinating if the Chinese government was supporting this as a broader geopolitical strategy to slow down the West. It does make sense but would require a remarkable level of insight, coordination and commitment to a costly yet uncertain strategy.

whiplash451 2y ago
I don't think it requires a remarkable level of insight. The overall cost for the Chinese government is probably very small in the grand scheme of things. And it makes a lot of sense from a geopolitical strategy.

whiplash451 2y ago

The game has indeed become brutal for foundational model companies. I am less worried for AI research+product companies: they have likely secured revenue streams with real customers and built domain knowledge in the meantime.