4 ms·

If there was some grand strategy for all Chinese labs, surely it'd have leaked by now. I think its more likely that: - Companies can still make money from comm

by x313 3mo ago

If there was some grand strategy for all Chinese labs, surely it'd have leaked by now. I think its more likely that: - Companies can still make money from commodities - Chinese labs only have 5-10% the valuation of OpenAI/Anthropic, so massive monopoly profits aren't necessary. Profit expectations for tech companies in China are really low in general, complete opposite of the US. - Open weighting is a great way to get talent/attention/reputation

verdverm 3mo ago
There is definitely strategy and direction coming from the top. CEOs have been summoned for conversations. There are new rules like no Ai lovers that certainly show they are thinking about things. The AI CTO from The Linux Foundation, Matt White, spoke about his recent trip to talk to the Chinese Ai labs ~month ago. https://www.youtube.com/watch?v=zHi0jy4MK4c https://www.youtube.com/watch?v=zHi0jy4MK4c https://www.economist.com/china/2026/07/16/china-wants-to-end-ai-romances https://www.economist.com/china/2026/07/16/china-wants-to-en...
zwu-var 3mo ago
> Companies can still make money from commodities Especially Chinese companies. Just think about all the other industries where Chinese companies dominate by extremely low cost.
- wilg 3mo ago
  Isn't that typically because they have lower labor costs? Not sure that applies as much to AI.
  - weird-eye-issue 3mo ago
    There are other factors too, for example I can't imagine that there are many protests in China against building data centers.
    - hnynf 3mo ago
      In China, no one opposes construction because data centers do not compete with the public for electricity.hhh~~
    - linzhangrun 3mo ago
      The idea of people protesting these things in China is simply a fantasy. People always just accept and carry out what government want.
      - weird-eye-issue 3mo ago
        Yep that was my point
    - byzantinegene 3mo ago
      it's not like the protests are working anyway
    - podocarp 3mo ago
      You can avoid that if you just plonk them in the desert, where there's also probably infinite solar E.g. https://www.bloomberg.com/graphics/2025-china-data-centers-nvidia-chips/ https://www.bloomberg.com/graphics/2025-china-data-centers-n...
      - tim-projects 3mo ago
        America has plenty of desert. Wierd that it's not used.
        throw2ih020 3mo ago
        Oh, they're trying, and the locals are not happy, due to both the rise in electricity usage (mostly NOT solar) and environmental damage. Look up the datacenter planned in Box Elder County, Utah.
      - ButlerianJihad 3mo ago
        Great, so you plonk data centers into the desert. Now you need to cool them, and bestow them with excellent network connectivity. Those are things that isolated, arid locations cannot do very well. So, plonking data centers into the desert (or on orbit) isn't really a silver bullet, is it?
  - cherioo 3mo ago
    Why not? Look at the silicon valley AI researcher salary. There’s no way Chinese researchers make close to the same amount.
    - tw1984 3mo ago
      Chinese AI researchers living in China can easily afford to have a butler managing a few living in nannies and a full time driver/personal assistant. Good luck for getting that type of life in silicon valley.
  - roenxi 3mo ago
    I'm not really sure that China's labour costs can be described as "low" these days, going by GDP per capita [0] they're above the global average. They're a little lower than the Europe median I think but the gap probably isn't strategically important. The Chinese edge tends to come from their environmental laws; they allow their industry to do things that the West would ban. [0] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
    - byzantinegene 3mo ago
      does demolishing homes to build data centers count?
    - brookst 3mo ago
      Is GDP per capita really a good proxy for labor costs?
      - dijit 3mo ago
        it can be, if you control with the Geni coefficient. However large parts of many countries is rural, and different amounts for different countries, and that tends cause control issues. But in general, a low Geni coefficient and a high GDP per capita means labour costs are high.
      - roenxi 3mo ago
        Yep. https://ourworldindata.org/grapher/median-daily-per-capita-expenditure-vs-gdp-per-capita https://ourworldindata.org/grapher/median-daily-per-capita-e... for example. Although note the log-log axis which undersells the gaps between countries.
    - podocarp 3mo ago
      I have no source for this but I feel like the environment thing is too frequently repeated (also without any evidence). They're pumping out solar like mad and places like the Xinjiang deserts actually have nowhere to put their excess electricity from what I've read previously. They also have a "cancel" culture pointed at the right place, in that whenever there is some exposé of some xyz it usually does get some reaction from the authorities. Even if in the end no real punishment is meted out due to corruption or politics or cover ups the very least is that the perps gave to change a hiding spot. Which is very much unlike the datacenter gas turbines running in people's backyards in the US right now. Furthermore if you take a look at the Politburo meetings and political documents etc it is clear that Xi is actively trying to solve the environmental problem. In the latest people's meeting it was also a talking point. It is a matter of "face" for them at this point. Contrast with "drill baby drill"? It is easy to talk about the "environmental" problems in China but I think it is very last decade. As a disclaimer I live in Asia and I frequently visit China but I'm not Chinese nor do I get any so called "social credits" which actually don't exist in China. The information gap between what the west thinks they know about China and what it actually is is sometimes kind of just a huge joke.
  - SXX 3mo ago
    To be honest I do not thihk you are wrong. Not in a way AI talent is underpaid, but they unlikely need to offer $1,000,000 sign up bonuses to just create AI lab. Its still pays better than average SWE job, but not x5-x10 more like in US. Though in manufacturing China is dominating because of immense optimized supply chain, economy of scale and now workforce with know-how. I honestly cant compare with US since I'm not from US, but to produce something in EU you will have weeks or months lags on logistics of source materials and components. And some industries only exist in some countries, etc. In China in one single place you have anything you need to produce from a toaster to a car in hands reach or might be few days at most. And I guess China did the same with education. Education is a lot cheaper there so they just have more talent.
  - dd8601fn 3mo ago
    The part that applies to AI is probably that they're (accused of) distilling SOTA models at a massive scale.
- brainwad 3mo ago
  A bunch of those industries are unprofitable, or profitable only due to unsustainable subsidies from their local governments.
Analemma_ 3mo ago
- AI investment is basically the only thing keeping the American economy treading water at the moment, and kicking the chair out from under that industry benefits China tremendously. I'm definitely not saying that's the only factor, but I think it's naive to assume it isn't at all a factor.
- ethbr1 3mo ago
  It's definitely a factor. In the same way that the US going to war with an important Chinese oil supplier: 85% of Iranian oil going to China and comprising ~14% of China's oil imports. There's always geopolitical reason behind the reason.
  - moregrist 3mo ago
    I think it’s pretty wishful thinking to believe that the Iran war was some complex N-dimensional chess to make Chinese oil costs higher. Even if the current President was known for his strategic global thinking and ability to keep quiet about the “real goals,” other explanations seem more likely.
    - sudosysgen 3mo ago
      It's not, but it's not coincidence either. The reason for the US entanglements in the Persian Gulf intensifying are because it's a choke point for oil, and the reason the US feels freer to mess around is because the US became an oil exporter. So the fact it's hurting China more than the US (in some ways) is related to the factors that led the war to start, even though it's not 27D hyperchess.
      - randbyte 3mo ago
        You think too much. Trump got duped into a gamble and didn’t win as he thought. If the hope is to hurt China it’s unlikely to be working very well. Their energy sources and oil sources are very diversified.
Iakeman 3mo ago
[dead]
me551ah 3mo ago
-Chinese labs only have 5-10% the valuation of OpenAI/Anthropic Another reason could be that they want to close the gap between their valuations and OpenAI/Anthropic. Either Chinese labs are worth more or OpenAI/Anthropic are worth less. One of those is true
- aylmao 3mo ago
  Does BYD want to close the gap between its valuation and Tesla's? I'd argue they're more concerned with capturing market share.
  - specialist 3mo ago
    BYD's continued growth in R&D spending supports your conclusion.
- hnfong 3mo ago
  At least one of those is true.
- adventured 3mo ago
  > Either Chinese labs are worth more or OpenAI/Anthropic are worth less. One of those is true The reason that's not inherently accurate is because it assumes the economic models are identical. That couldn't be further from the truth. It'd be like pretending a globally dominate Google search engine should be worth as much as eg Baidu or Yandex. No doubt Baidu is an advanced search engine, and that's not what defines its economic characteristics: the markets it operates in does, the market ownership does, the ad engine does, the ability to sell does (advertiser relationships), etc. OpenAI is very likely to bolt on a massive, global advertising platform to GPT over the coming years (and yes, it'll take time to build up). The Chinese labs will have a very hard time replicating that to a global audience the way the US tech companies have repeatedly proven they can. OpenAI will poach proven ad system builders from Meta and Google.
oefrha 3mo ago
Apparently open source models is an officially stated national strategy now, which is somewhat reassuring that we'll probably keep getting these for a while. https://www.reuters.com/world/asia-pacific/chinas-xi-promotes-chinas-commitment-ai-access-speech-shanghai-conference-2026-07-17/ https://www.reuters.com/world/asia-pacific/chinas-xi-promote...
- yorwba 3mo ago
  In his speech https://www.xinhuanet.com/politics/leaders/20260717/72728b6f94154d63b3eaaaf9808b51eb/c.html https://www.xinhuanet.com/politics/leaders/20260717/72728b6f... Xi Jinping mentioned "open source" (开源) exactly once in a list of buzzwords. Deriving from that an "officially stated national strategy" that ensures the free beer won't stop flowing is motivated reasoning. The most popular LLM chatbot in China is Bytedance's Doubao. Do you think this national strategy will involve forcing them to release their weights? Another buzzword mentioned by Xi is "safety and controllability" (安全可控), which is generally in tension with open source, since that involves giving up control. Historically, when there's a conflict between openness and controllability, the Chinese government tends to choose control, see the Great Firewall.
- mrngld 3mo ago
  Until it's no longer officially stated strategy, and something else benefits the CCP. See rare earths policy. Changes constantly, to whatever maximizes their leverage. The aspect that you can count on is that China sees AI as a long term strategic necessity, so they will support domestic players for an extremely long time. But unless you're a Chinese lab that shouldn't necessarily be a comfort to anyone else.
  - daishi55 3mo ago
    Unlike every other country on the planet which use their leverage to benefit all nations equally.
    - jingpostmedia 3mo ago
      [flagged]
geniium 3mo ago
> Chinese labs only have 5-10% the valuation of OpenAI/Anthropic, so massive monopoly profits aren't necessary. Profit expectations for tech companies in China are really low in general, complete opposite of the US. It’s really amazing to see that the competition is creating better quality models for everyone - and am really happy that some of these are open source (or partially os). Regarding the valuation, that maybe points a finger to the over valuation of the US companies ? Interesting times to be alive.
- deleted 3mo ago
  [deleted]
MASNeo 3mo ago
Maybe they are overdoing it with “attention is all you need”
3abiton 3mo ago
Also at scale Kimi (or DeepSeek and others) don't have to worry about local deployment. The number of param keeps growing, I highly doubt consumer hardware will catch up. I am just glad Qwen team is still putting up great bangers.

by x313 3mo ago

verdverm 3mo ago

There is definitely strategy and direction coming from the top. CEOs have been summoned for conversations. There are new rules like no Ai lovers that certainly show they are thinking about things. The AI CTO from The Linux Foundation, Matt White, spoke about his recent trip to talk to the Chinese Ai labs ~month ago. https://www.youtube.com/watch?v=zHi0jy4MK4c https://www.youtube.com/watch?v=zHi0jy4MK4c https://www.economist.com/china/2026/07/16/china-wants-to-end-ai-romances https://www.economist.com/china/2026/07/16/china-wants-to-en...

zwu-var 3mo ago

> Companies can still make money from commodities Especially Chinese companies. Just think about all the other industries where Chinese companies dominate by extremely low cost.

wilg 3mo ago
Isn't that typically because they have lower labor costs? Not sure that applies as much to AI.
- weird-eye-issue 3mo ago
  There are other factors too, for example I can't imagine that there are many protests in China against building data centers.
  - hnynf 3mo ago
    In China, no one opposes construction because data centers do not compete with the public for electricity.hhh~~
  - linzhangrun 3mo ago
    The idea of people protesting these things in China is simply a fantasy. People always just accept and carry out what government want.
    - weird-eye-issue 3mo ago
      Yep that was my point
  - byzantinegene 3mo ago
    it's not like the protests are working anyway
  - podocarp 3mo ago
    You can avoid that if you just plonk them in the desert, where there's also probably infinite solar E.g. https://www.bloomberg.com/graphics/2025-china-data-centers-nvidia-chips/ https://www.bloomberg.com/graphics/2025-china-data-centers-n...
    - tim-projects 3mo ago
      America has plenty of desert. Wierd that it's not used.
      - throw2ih020 3mo ago
        Oh, they're trying, and the locals are not happy, due to both the rise in electricity usage (mostly NOT solar) and environmental damage. Look up the datacenter planned in Box Elder County, Utah.
    - ButlerianJihad 3mo ago
      Great, so you plonk data centers into the desert. Now you need to cool them, and bestow them with excellent network connectivity. Those are things that isolated, arid locations cannot do very well. So, plonking data centers into the desert (or on orbit) isn't really a silver bullet, is it?
- cherioo 3mo ago
  Why not? Look at the silicon valley AI researcher salary. There’s no way Chinese researchers make close to the same amount.
  - tw1984 3mo ago
    Chinese AI researchers living in China can easily afford to have a butler managing a few living in nannies and a full time driver/personal assistant. Good luck for getting that type of life in silicon valley.
- roenxi 3mo ago
  I'm not really sure that China's labour costs can be described as "low" these days, going by GDP per capita [0] they're above the global average. They're a little lower than the Europe median I think but the gap probably isn't strategically important. The Chinese edge tends to come from their environmental laws; they allow their industry to do things that the West would ban. [0] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
  - byzantinegene 3mo ago
    does demolishing homes to build data centers count?
  - brookst 3mo ago
    Is GDP per capita really a good proxy for labor costs?
    - dijit 3mo ago
      it can be, if you control with the Geni coefficient. However large parts of many countries is rural, and different amounts for different countries, and that tends cause control issues. But in general, a low Geni coefficient and a high GDP per capita means labour costs are high.
    - roenxi 3mo ago
      Yep. https://ourworldindata.org/grapher/median-daily-per-capita-expenditure-vs-gdp-per-capita https://ourworldindata.org/grapher/median-daily-per-capita-e... for example. Although note the log-log axis which undersells the gaps between countries.
  - podocarp 3mo ago
    I have no source for this but I feel like the environment thing is too frequently repeated (also without any evidence). They're pumping out solar like mad and places like the Xinjiang deserts actually have nowhere to put their excess electricity from what I've read previously. They also have a "cancel" culture pointed at the right place, in that whenever there is some exposé of some xyz it usually does get some reaction from the authorities. Even if in the end no real punishment is meted out due to corruption or politics or cover ups the very least is that the perps gave to change a hiding spot. Which is very much unlike the datacenter gas turbines running in people's backyards in the US right now. Furthermore if you take a look at the Politburo meetings and political documents etc it is clear that Xi is actively trying to solve the environmental problem. In the latest people's meeting it was also a talking point. It is a matter of "face" for them at this point. Contrast with "drill baby drill"? It is easy to talk about the "environmental" problems in China but I think it is very last decade. As a disclaimer I live in Asia and I frequently visit China but I'm not Chinese nor do I get any so called "social credits" which actually don't exist in China. The information gap between what the west thinks they know about China and what it actually is is sometimes kind of just a huge joke.
- SXX 3mo ago
  To be honest I do not thihk you are wrong. Not in a way AI talent is underpaid, but they unlikely need to offer $1,000,000 sign up bonuses to just create AI lab. Its still pays better than average SWE job, but not x5-x10 more like in US. Though in manufacturing China is dominating because of immense optimized supply chain, economy of scale and now workforce with know-how. I honestly cant compare with US since I'm not from US, but to produce something in EU you will have weeks or months lags on logistics of source materials and components. And some industries only exist in some countries, etc. In China in one single place you have anything you need to produce from a toaster to a car in hands reach or might be few days at most. And I guess China did the same with education. Education is a lot cheaper there so they just have more talent.
- dd8601fn 3mo ago
  The part that applies to AI is probably that they're (accused of) distilling SOTA models at a massive scale.
brainwad 3mo ago
A bunch of those industries are unprofitable, or profitable only due to unsustainable subsidies from their local governments.

Analemma_ 3mo ago

- AI investment is basically the only thing keeping the American economy treading water at the moment, and kicking the chair out from under that industry benefits China tremendously. I'm definitely not saying that's the only factor, but I think it's naive to assume it isn't at all a factor.

ethbr1 3mo ago
It's definitely a factor. In the same way that the US going to war with an important Chinese oil supplier: 85% of Iranian oil going to China and comprising ~14% of China's oil imports. There's always geopolitical reason behind the reason.
- moregrist 3mo ago
  I think it’s pretty wishful thinking to believe that the Iran war was some complex N-dimensional chess to make Chinese oil costs higher. Even if the current President was known for his strategic global thinking and ability to keep quiet about the “real goals,” other explanations seem more likely.
  - sudosysgen 3mo ago
    It's not, but it's not coincidence either. The reason for the US entanglements in the Persian Gulf intensifying are because it's a choke point for oil, and the reason the US feels freer to mess around is because the US became an oil exporter. So the fact it's hurting China more than the US (in some ways) is related to the factors that led the war to start, even though it's not 27D hyperchess.
    - randbyte 3mo ago
      You think too much. Trump got duped into a gamble and didn’t win as he thought. If the hope is to hurt China it’s unlikely to be working very well. Their energy sources and oil sources are very diversified.

Iakeman 3mo ago

[dead]

me551ah 3mo ago

-Chinese labs only have 5-10% the valuation of OpenAI/Anthropic Another reason could be that they want to close the gap between their valuations and OpenAI/Anthropic. Either Chinese labs are worth more or OpenAI/Anthropic are worth less. One of those is true

aylmao 3mo ago
Does BYD want to close the gap between its valuation and Tesla's? I'd argue they're more concerned with capturing market share.
- specialist 3mo ago
  BYD's continued growth in R&D spending supports your conclusion.
hnfong 3mo ago
At least one of those is true.
adventured 3mo ago
> Either Chinese labs are worth more or OpenAI/Anthropic are worth less. One of those is true The reason that's not inherently accurate is because it assumes the economic models are identical. That couldn't be further from the truth. It'd be like pretending a globally dominate Google search engine should be worth as much as eg Baidu or Yandex. No doubt Baidu is an advanced search engine, and that's not what defines its economic characteristics: the markets it operates in does, the market ownership does, the ad engine does, the ability to sell does (advertiser relationships), etc. OpenAI is very likely to bolt on a massive, global advertising platform to GPT over the coming years (and yes, it'll take time to build up). The Chinese labs will have a very hard time replicating that to a global audience the way the US tech companies have repeatedly proven they can. OpenAI will poach proven ad system builders from Meta and Google.

oefrha 3mo ago

Apparently open source models is an officially stated national strategy now, which is somewhat reassuring that we'll probably keep getting these for a while. https://www.reuters.com/world/asia-pacific/chinas-xi-promotes-chinas-commitment-ai-access-speech-shanghai-conference-2026-07-17/ https://www.reuters.com/world/asia-pacific/chinas-xi-promote...

yorwba 3mo ago
In his speech https://www.xinhuanet.com/politics/leaders/20260717/72728b6f94154d63b3eaaaf9808b51eb/c.html https://www.xinhuanet.com/politics/leaders/20260717/72728b6f... Xi Jinping mentioned "open source" (开源) exactly once in a list of buzzwords. Deriving from that an "officially stated national strategy" that ensures the free beer won't stop flowing is motivated reasoning. The most popular LLM chatbot in China is Bytedance's Doubao. Do you think this national strategy will involve forcing them to release their weights? Another buzzword mentioned by Xi is "safety and controllability" (安全可控), which is generally in tension with open source, since that involves giving up control. Historically, when there's a conflict between openness and controllability, the Chinese government tends to choose control, see the Great Firewall.
mrngld 3mo ago
Until it's no longer officially stated strategy, and something else benefits the CCP. See rare earths policy. Changes constantly, to whatever maximizes their leverage. The aspect that you can count on is that China sees AI as a long term strategic necessity, so they will support domestic players for an extremely long time. But unless you're a Chinese lab that shouldn't necessarily be a comfort to anyone else.
- daishi55 3mo ago
  Unlike every other country on the planet which use their leverage to benefit all nations equally.
  - jingpostmedia 3mo ago
    [flagged]

geniium 3mo ago

> Chinese labs only have 5-10% the valuation of OpenAI/Anthropic, so massive monopoly profits aren't necessary. Profit expectations for tech companies in China are really low in general, complete opposite of the US. It’s really amazing to see that the competition is creating better quality models for everyone - and am really happy that some of these are open source (or partially os). Regarding the valuation, that maybe points a finger to the over valuation of the US companies ? Interesting times to be alive.

deleted 3mo ago
[deleted]

MASNeo 3mo ago

Maybe they are overdoing it with “attention is all you need”

3abiton 3mo ago

Also at scale Kimi (or DeepSeek and others) don't have to worry about local deployment. The number of param keeps growing, I highly doubt consumer hardware will catch up. I am just glad Qwen team is still putting up great bangers.