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This is strategy by Chinese government, so much of US economy is invested in AI. Releasing free or cheap versions of the models undermines US economic growth. I

by vl 3mo ago

This is strategy by Chinese government, so much of US economy is invested in AI. Releasing free or cheap versions of the models undermines US economic growth. It’s asymmetric strategy that makes sense if you are close second in AI race. If situation is reversed, US would do the same.

zkmon 3mo ago
It's exactly the same strategy followed by the Silicon Valley for the past 3 decades to beat the IBM-era companies. Google gave everything free. Social media stuff was free. Video calls are free. Bloggers gave content for free. A lot ot open-source product developers did managed offerings of the free products.
- weitendorf 3mo ago
  Free + Open is simply how you earn credibility and user trust when you don’t already have it. That doesn’t mean the trust is unearned once gained, or a bait and switch, or purely Machiavellian either btw. Consumers and businesses need credible branding to feel like they can trust vendors who provide them with the products they value or deem mission-critical, because it creates accountability and makes it less risky to depend on. Open source addresses the credibility/accountability/branding/counterparty problems simultaneously, and adds to a permanent intellectual commons we all benefit from. It’s legitimately just Good
oceanplexian 3mo ago
> Releasing free or cheap versions of the models undermines US economic growth. This would be like saying that the creation of the PC undermined the 1980s economy because it hurt IBM's profits. Instead the consequences of cheap, ubiquitous personal computers grew the economy 10-fold. There is an entire class of wholesale model providers that stand to gain from open source models. Then there are companies building platforms on top of LLMs that would otherwise be impossible with closed models due to cost. And there are entire enterprise use cases that would simply be non-viable at $50/million tokens, like OpenClaw, Hermes, etc.
anon373839 3mo ago
> so much of US economy is invested in AI. This is a talking point that plays into the frontier labs' desire to be seen as "too big to fail". While yes, several hundred billion dollars have been invested in AI, (a) much of this is in the form of circular Monopoly-money deals, and (b) the US GDP is over $30 trillion annually. The real economy - the one that makes food, builds homes, provides medical care, etc. - is so much bigger and more important than the AI industry. That's not to say that an (inevitable?) AI crash won't be the spark that ignites a big recession. We are well overdue for one.
- realusername 3mo ago
  > The real economy - the one that makes food, builds homes, provides medical care, etc. - is so much bigger and more important than the AI industry. The real economy has seen pretty poor growth under Trump tariffs chaos though and I'm not sure the US economy could survive a crash of the tech companies
- Gigachad 3mo ago
  The "real economy" in the US is in complete shambles right now while everyone is distracted by AI meme money.
podocarp 3mo ago
It's just too much 5D chess to be possible. Government spending billions into AI companies and pressuring them to open source at a hope at denting openAI and co? Why not just pour the cash into electric cars or steel where there's a guaranteed return? It's just absurd.
- tjwebbnorfolk 3mo ago
  There are entire buildings full of people in the US and China who sit and think about national strategy for their entire career.
Schlagbohrer 3mo ago
Google did this by creating Android to undercut Apple. Many US tech firms did this strategy in the 2000s and 2010s of supporting open source alternatives to their opponent's closed source money maker, to undercut the competition. Back then, it let open source have a big boost and we all benefited from that. Hopefully open weights models will do the same so that AI can be more democratized. I wouldn't want to live in a world where, for example only Anthropic or MSFT have top AI and the rest of us have nothing.
- mike_hearn 3mo ago
  Android wasn't created to undercut Apple. It was started long before the iPhone project was public. Android was created because Google felt their apps could be huge on mobile (correct) but that mobile operating systems of the time were painful and frustrating to develop for.
  - fauigerzigerk 3mo ago
    >Android wasn't created to undercut Apple Android the technology wasn't, but Android the commercial product along with its business model was. The first iPhone came out in June 2007. In November of that year Google and partners announced the Open Handset Alliance and the open sourcing of Android.
  - microtonal 3mo ago
    Android was even an acquisition. However, it was open sourced after the iPhone. The iPhone was announced in January 2007 and released in June 2007. The first AOSP announcement/source drop was in November 2007. I think it is very likely that Google open sourced Android to undercut iPhone. Android was initially developed for phones with a keyboard (similar to Blackberry). The introduction of the iPhone made it clear that touch was going to be the future, so Android was quite far behind before it was even released. Besides that, my recollection is that the first Android releases were pretty bad compared to iPhone OS. I know a lot of people (not necessarily Apple fans) who looked down on Android. Open sourcing Android was a great move to rally manufacturers around Android and gather a large group of early enthusiasts.
panting 3mo ago
Chinese companies also have invested money and people to grow AI model，though China's energy costs are far lower than everybody else's. Combined with lower labor costs and currency arbitrage, it's completely natural that Chinese models are priced so aggressively. I use them myself, and the price-to-performance ratio is honestly unbeatable.
nikitau 3mo ago
At a state level it's a pretty good defensive strategy against the American AI industry, as a whole, gaining a monopolistic advantage. This prevents the US from using this as a coercive leverage through things such as tarrifs, export bans etc. In a world, that's increasingly dependant on the AI "opium" that the US is dealing, it's conceivable that the current administration could try to sabotage something like, say Chinese-European relationships, by threatening to cut access to Anthropic or OpenAI products for Europeans, if China cosies up to the EU. The disadvantage of trying to use these leverages, is that once the genie's out of the bottle, the other party will divert their focus quickly, so it only works if the US truly has a choke-hold on frontier AI. Otherwise, you just scared the other party into never trusting American frontier AI ever, and you didn't even truly hurt them, because they already have a quick fix from China. Unfortunately behind a paywall, but there's an article in the previous issue of Foreign Affairs about how the Trump administration has fumbled this coercion strategy repeatedly because they overestimated their advantage in different markets (tariffs on Canada, Iran, etc) and what an actually effective strategy can look like https://www.foreignaffairs.com/united-states/how-fight-economic-war-fishman https://www.foreignaffairs.com/united-states/how-fight-econo... tl; dr: You need to have a monopoly, the enemy should not bounce back quickly, you shouldn't cripple your own economy doing it. AI may just be the next economic offensive the Trump administration fumbles, because China planned ahead by incentivising development of close-second alternatives to their frontier models.

by vl 3mo ago

zkmon 3mo ago

It's exactly the same strategy followed by the Silicon Valley for the past 3 decades to beat the IBM-era companies. Google gave everything free. Social media stuff was free. Video calls are free. Bloggers gave content for free. A lot ot open-source product developers did managed offerings of the free products.

weitendorf 3mo ago
Free + Open is simply how you earn credibility and user trust when you don’t already have it. That doesn’t mean the trust is unearned once gained, or a bait and switch, or purely Machiavellian either btw. Consumers and businesses need credible branding to feel like they can trust vendors who provide them with the products they value or deem mission-critical, because it creates accountability and makes it less risky to depend on. Open source addresses the credibility/accountability/branding/counterparty problems simultaneously, and adds to a permanent intellectual commons we all benefit from. It’s legitimately just Good

oceanplexian 3mo ago

> Releasing free or cheap versions of the models undermines US economic growth. This would be like saying that the creation of the PC undermined the 1980s economy because it hurt IBM's profits. Instead the consequences of cheap, ubiquitous personal computers grew the economy 10-fold. There is an entire class of wholesale model providers that stand to gain from open source models. Then there are companies building platforms on top of LLMs that would otherwise be impossible with closed models due to cost. And there are entire enterprise use cases that would simply be non-viable at $50/million tokens, like OpenClaw, Hermes, etc.

anon373839 3mo ago

> so much of US economy is invested in AI. This is a talking point that plays into the frontier labs' desire to be seen as "too big to fail". While yes, several hundred billion dollars have been invested in AI, (a) much of this is in the form of circular Monopoly-money deals, and (b) the US GDP is over $30 trillion annually. The real economy - the one that makes food, builds homes, provides medical care, etc. - is so much bigger and more important than the AI industry. That's not to say that an (inevitable?) AI crash won't be the spark that ignites a big recession. We are well overdue for one.

realusername 3mo ago
> The real economy - the one that makes food, builds homes, provides medical care, etc. - is so much bigger and more important than the AI industry. The real economy has seen pretty poor growth under Trump tariffs chaos though and I'm not sure the US economy could survive a crash of the tech companies
Gigachad 3mo ago
The "real economy" in the US is in complete shambles right now while everyone is distracted by AI meme money.

podocarp 3mo ago

It's just too much 5D chess to be possible. Government spending billions into AI companies and pressuring them to open source at a hope at denting openAI and co? Why not just pour the cash into electric cars or steel where there's a guaranteed return? It's just absurd.

tjwebbnorfolk 3mo ago
There are entire buildings full of people in the US and China who sit and think about national strategy for their entire career.

Schlagbohrer 3mo ago

Google did this by creating Android to undercut Apple. Many US tech firms did this strategy in the 2000s and 2010s of supporting open source alternatives to their opponent's closed source money maker, to undercut the competition. Back then, it let open source have a big boost and we all benefited from that. Hopefully open weights models will do the same so that AI can be more democratized. I wouldn't want to live in a world where, for example only Anthropic or MSFT have top AI and the rest of us have nothing.

mike_hearn 3mo ago
Android wasn't created to undercut Apple. It was started long before the iPhone project was public. Android was created because Google felt their apps could be huge on mobile (correct) but that mobile operating systems of the time were painful and frustrating to develop for.
- fauigerzigerk 3mo ago
  >Android wasn't created to undercut Apple Android the technology wasn't, but Android the commercial product along with its business model was. The first iPhone came out in June 2007. In November of that year Google and partners announced the Open Handset Alliance and the open sourcing of Android.
- microtonal 3mo ago
  Android was even an acquisition. However, it was open sourced after the iPhone. The iPhone was announced in January 2007 and released in June 2007. The first AOSP announcement/source drop was in November 2007. I think it is very likely that Google open sourced Android to undercut iPhone. Android was initially developed for phones with a keyboard (similar to Blackberry). The introduction of the iPhone made it clear that touch was going to be the future, so Android was quite far behind before it was even released. Besides that, my recollection is that the first Android releases were pretty bad compared to iPhone OS. I know a lot of people (not necessarily Apple fans) who looked down on Android. Open sourcing Android was a great move to rally manufacturers around Android and gather a large group of early enthusiasts.

panting 3mo ago

Chinese companies also have invested money and people to grow AI model，though China's energy costs are far lower than everybody else's. Combined with lower labor costs and currency arbitrage, it's completely natural that Chinese models are priced so aggressively. I use them myself, and the price-to-performance ratio is honestly unbeatable.

nikitau 3mo ago

At a state level it's a pretty good defensive strategy against the American AI industry, as a whole, gaining a monopolistic advantage. This prevents the US from using this as a coercive leverage through things such as tarrifs, export bans etc. In a world, that's increasingly dependant on the AI "opium" that the US is dealing, it's conceivable that the current administration could try to sabotage something like, say Chinese-European relationships, by threatening to cut access to Anthropic or OpenAI products for Europeans, if China cosies up to the EU. The disadvantage of trying to use these leverages, is that once the genie's out of the bottle, the other party will divert their focus quickly, so it only works if the US truly has a choke-hold on frontier AI. Otherwise, you just scared the other party into never trusting American frontier AI ever, and you didn't even truly hurt them, because they already have a quick fix from China. Unfortunately behind a paywall, but there's an article in the previous issue of Foreign Affairs about how the Trump administration has fumbled this coercion strategy repeatedly because they overestimated their advantage in different markets (tariffs on Canada, Iran, etc) and what an actually effective strategy can look like https://www.foreignaffairs.com/united-states/how-fight-economic-war-fishman https://www.foreignaffairs.com/united-states/how-fight-econo... tl; dr: You need to have a monopoly, the enemy should not bounce back quickly, you shouldn't cripple your own economy doing it. AI may just be the next economic offensive the Trump administration fumbles, because China planned ahead by incentivising development of close-second alternatives to their frontier models.