[mediaman]

Regulatory capture doesn't necessarily mean the regulated get to decide what the regulators do in precise steps. It can simply mean they support and exist within a regulatory regime that greatly benefits the regulated.

In fact, you generally don't want them directly telling the regulators what to do. Instead, the regulators make complex, costly rules that only large establishment players can follow. The regulators look like they're doing their job; the regulated enjoy higher margins and protection from disruption.

[no-name-here]

How does this benefit the regulated? I'd say it dooms the regulated:

* with the government requiring the regulated to obtain approval to add each customer, they're losing a massive number of their customers

* and even if a customer gets approved, every such customer now sees that access to the regulated can (and has been) shutoff with no notice if the gov doesn’t like the provider or customer - it's now a massive supply chain risk for any customer to use a regulated provider

* the regulated losing a massive part of their customer base for both of the above reasons means significant impairment of their revenue, as well as their valuation, and staying ahead of their competitors and open models requires massive ongoing investment

Open models are mere months behind.

[fc417fc802]

> they're losing a massive number of their customers

Who are they losing them to? They're the only game in town.

> it's now a massive supply chain risk for any customer to use a regulated provider

But seeing as there is no alternative use them they will.

> the regulated losing a massive part of their customer base

But they aren't. Access to existing models isn't being pulled. It is only access to previously unreleased models that is being restricted going forward.

> Open models are mere months behind.

Presumably the government will strategically ease restrictions as open models gain ground.

[thayne]

And the regulated may even publicly complain about the regulations, to increase the illusion that it isn't regulatory capture.

[sooheon]

That's just vanilla regulation. Yes it tends to create market inefficiencies, by definition. Capture entails industry corrupting and directing regulatory bodies.

[ZappoMan]

Exactly! The thing that squeezes out new entrants isn't only the compliance cost, it's that your whole roadmap ends up resting on access you don't control.

We already saw the terms moved under us once with Fable, the retention policy changed and some requests started routing to a weaker model, none of us small operators had any say in that. Now access itself is a government decisions.

For anyone building on top of these APIs that's the real barrier, not the rule-following overhead but the fact that the ground can shift mid-flight and you can't negotiate with whoever's moving it.

Which is exactly why open weights start looking less like ideology and more like risk management.