[brap]

> I'd expect them to shift to a model where Chinese models are hosted on Chinese infra.

You assume these Chinese companies need to make a profit. Nothing is really private in China, nothing that truly grants power, anyway.

CCP can just write off these loses as defense budget, which they basically are.

I bet that, all things considered, training 10 new Chinese frontier models costs _significantly_ less than a single modern fighter jet.

[mtrovo]

Which on itself is wild. The main issue with the discussion isn't a rift in capabilities, but a rift in the valuation model itself.

If China can match the pace and produce frontier models at a fraction of the cost of US alternatives, even without access to SOTA hardware, what is the competitive advantage for the current valuations of Anthropic and OpenAI?

[brap]

The Chinese ecosystem is largely built on stealing intellectual property from and/or distilling of US closed source models.

I’m not getting into the ethics/comedy aspect of it, but let’s not pretend this isn’t the case. Plenty of evidence, the motive is obvious, and the numbers are in plain sight (valuations, salaries, etc).

As long as this continues I think closed source will continue being a few steps ahead, but the steps will probably get smaller over time.

Having said that, this is already priced in, the market predicts this gap will be large enough for the US companies to profit from (astronomically).