[nilkn]

The keyword in your sentence is "access". The rest of the world would have cheap access to AI, but no ownership of anything at the frontier. If the US joined the rest of the world, declined to develop frontier AI, and allowed itself to become dependent on cheap Chinese AI, once that dependency was fully realized it would eventually translate into a lack of access to the frontier. That doesn't matter until, suddenly, it becomes the single most important thing to the entire country's future.

China is making a simple bet: that the US will offshore AI in favor of cheap tokens, just like the US previously offshored manufacturing in favor of cheap goods. They're doing this because they know that if they alone possess frontier manufacturing and AI capabilities, then they alone can build the world's most powerful technologies in the future which combine the two (e.g., robotics that will revolutionize all their industries, domestic life, and military far beyond any other country).

[unknownfuture]

> The keyword in your sentence is "access". The rest of the world would have cheap access to AI, but no ownership of anything at the frontier.

So... just use distillation and create their own frontier models?

I don't see the problem here.

If the goal is to hold sovereign ownership over your own SOTA models, China has already shown that any nation could achieve that pretty easily if they need to.

And that's ignoring the fact that many of these models are open weight so hosting/owning sovereign inference/intelligence itself is entirely a hardware problem.

This whole conversation reminds me a lot of North Korea deciding they needed their own OS when Linux is right there. If the technology is open and available to all, then sovereignty over this core technology is irrelevant.

[nilkn]

Linux is not a relevant comparison, because the fundamental capabilities of an OS do not grow exponentially with time or investment.

If building full sovereign ownership of the production chain for frontier-level AI were so easy, there wouldn't only be two countries on the entire planet that have that right now. If distillation worked in the way you seem to imagine it does, nearly every country in the world would have a full sovereign frontier AI stack.

[unknownfuture]

They would if they cared to invest in it. That they've not is a policy and economic choice (possibly because they don't have the same sense of panicked urgency I see among a lot of folks around here), not evidence of some insurmountable barrier to entry.

You also jumped to a conclusion that I don't think is self-evident: that owning the production chain matters.

Assuming open weight models continue to advance, who cares? Just let the US and China expend the compute on model development.

And if they close up, then fine, do what China did and build up a domestic industry and distill as a way to get a jumpstart. We already know that's possible since China already did it.

[nilkn]

It's well understood at this point that China's results are simply not purely the result of distillation. They're the result of significant investment with a willingness not to make a profit any time soon. That's why distillation is not enough. Again, if it were that easy, then it would in fact be that easy. And all the evidence across the world clearly illustrates it's not. Even with distillation, it's incredibly expensive building a fully sovereign domestic frontier AI stack.

> Assuming open weight models continue to advance, who cares?

There's no reason to assume they will advance as fast as closed models. If the world is reduced to a single fully autonomous producer of true frontier intelligence (China), and everyone else is using open models produced from or distilled from the results of China, then two categories of AI inevitably emerge: open models and frontier closed models, the latter of which are known and controlled only by their sole producer. Given that progress is exponential, once competition is eliminated, one can reasonably expect an exponential gap in technology capability to emerge between China and the rest of the world. That is not a side effect but the entire point. It's the very goal being engineered right now.

> And if they close up, then fine, do what China did and build up a domestic industry and distill as a way to get a jumpstart.

"build up a domestic industry" will be about as easy as reshoring frontier manufacturing capability. That is to say, there's a threshold of "no return" after which it won't be possible at all without extremely painful re-architecting of the entire country's economic system to force a massive domestic development that said system no longer naturally incentivizes.

[johnnyanmac]

>because the fundamental capabilities of an OS do not grow exponentially with time or investment.

I strongly disagree. Especially in times where Microsoft is actively trying to ingrate OS into Windows itself. the OS clearly isn't just a schema for apps and a task scheduler anymore.

>If building full sovereign ownership of the production chain for frontier-level AI were so easy, there wouldn't only be two countries on the entire planet that have that right now.

The rest of the world is still cooling from COVID, so not exactly a great time for any other country to spend a trillion dollars on speculative technology.

Regardless, this is the wrong lens. The two countries aren't avoiding it because it's hard, they avoid it because it gives less power and money to them.

[nilkn]

You can disagree, but simply stating disagreement isn't substantive. Linux can be enormously important while also not being subject to exponential value creation through improvements to itself.

[johnnyanmac]

>but simply stating disagreement isn't substantive.

I gave an example. And I was thinking of genuine features and responsibilities for a competitive OS, not "value creation" (I don't base my OS usage on how much shareholder value it generates). The capabilities of an OS in 1996 and 2026 are massively different.

[nilkn]

You gave an example of Linux having value, which is not contested and not relevant. You did not give any examples showing the existence of an exponential here. Moreover, the value being discussed is long-term geopolitical leverage resulting from a country's sovereign technology capability that remains unperturbed under heavily adversarial conditions, not shareholder value. In fact, it is a direct corollary of my claims that the two concepts of value are not equivalent, and that is precisely the trap being set and the gap being exploited.

[ajju]

(Sincere question, not a rhetorical one)

I think it would be helpful if you explained how distillation works (as relevant to the conversations threads here) because I agree that this is a key point.

[ericmay]

Spot-on and really well written post highlighting the challenges here. Really it just comes down to the US and surrounding sycophants and China. There just isn't any other game in town. For the US to just, well, give up on AI development would be civilizational suicide. I wouldn't put it past us though, most Americans in particular are so weak minded they only care about cheapest possible product. It's interesting to see how well propaganda campaigns have been working to harm American interest in AI and related technology (data centers are a bit of a different story). Young students are applauding guest speakers giving them the news they want to hear about how AI is bad and they need to tear it all down, while in the real world those same students are actively committing career suicide by refusing to innovate or adapt. It wouldn't really matter except that they vote, and those votes will wind up doing harm under the guise of doing good, but really it's a matter of delusion that we will all pay the price for.

Anyway the good news is everyone says China's strategy of just releasing open-weight models is the coup de grace for American technology companies and all the investment, research, all of that stuff by all of these companies who certainly don't care to survive and continue making trillions of dollars and can't possibly be managed by the same genius engineers who post on HN will just go away.

And then once that happens we'll just do what China did, and let them build a bunch of AI capabilities, scale out data centers, invest trillions, then we'll just release open-weight models too and then what?

You don't need to know a whole lot about AI to realize that most people on the Internet that are commenting on these stories haven't thought about how the real world works for more than two seconds when it comes to this stuff. China can enact a strategy, we can copy that strategy and even improve upon it.

Surprise Pikachu.

You (not you) can't claim a lead is unimportant and this undercutting strategy is so good and then simultaneously say the US can't do it back to China. That's dumb. If the lead doesn't matter everyone will stop doing AI research because being undercut is too expensive. How likely does that seem, and why isn't China stopping research if that is true and they just need to keep releasing open-weight models? Sorry, but being on the leading edge matters a whole fucking lot. As I've written in other posts this is like a cheap Android phone from Wal-Mart versus the latest iPhone. There's a reason you buy the iPhone and not the cheapest Android phone you can find even though they have all the same apps and both make phone calls.

I'm open to changing my mind here, but I have yet to see a convincing argument. Just a lot of pearl-clutching and China fear mongering.

[marcus_holmes]

We can see the same situation play out with manufacturing capability.

The USA has recognised that it needs more manufacturing capability. But rather than just build that capability (which is what the Chinese state-planned economy would do, and did) it tries to incentivise private companies to build it. Which didn't work because the companies building domestic manufacturing face competition from Chinese imports. The investment money can get better returns chasing property deals or rent-seeking monopolies.

In the "we can do it back" case, it still takes a US private company a lot of time and money to distill their model off the Chinese model. There has to be a lot of profit for them to do that. That profit isn't really available - it's a competition with all the other models, and no monopoly rents. There's for sure a viable business there, but it's a "lifestyle business" not the 1000x growth business that VC's want.

[ericmay]

> We can see the same situation play out with manufacturing capability.

I don't think manufacturing is a great analogy and we should be careful to try and compare these two very closely. But the closest comparison would be iPhone versus Android. Many more people use Android, and the phones are a lot cheaper and can be produced in mass, but the iPhone is the dominant phone and captures much more market share.

> There has to be a lot of profit for them to do that.

Sure... but if China is just subsidizing AI companies to copy/distill/whatever American models it's fair for the US (as it would be for manufacturing) to work to block those models. But also you have to remember that the US is in the lead, so while there isn't profit that I'm aware of to be had now, if the Chinese caught up then presumably there would be some level of profit. There's good and bad here though too because, well, as you can see in China's over-built housing market the government makes a lot of bad assumptions and mistakes and is subject to forces that can cause less than desirable outcomes. It goes both ways a bit.