8/4/2026 at 2:19:33 PM
> In a world where open-weight models dominate, the proprietary frontier models of Anthropic and OpenAI will find it virtually impossible to charge monopolistic pricing.Maybe they can't charge monopolistic pricing (there's a few market entrants anyway today), but they can still charge premium pricing.
Also two things can be true at once.
American and western AI companies or other companies can rightly be part of the chain of general concern from western societies about anti-democratic authoritarian regimes (Iran + friends, China, Russia, North Korea, Cuba, &c.) getting ahold of technology while simultaneously also being worried about losing their market position and seeking regulatory rules to entrench themselves against actors who do not share the same values and seek to undermine western businesses with trade practices that are intolerable to our societies.
by ericmay
8/4/2026 at 5:23:11 PM
They will be like Windows Server. Expensive, restricted and overall worse than the open stuff but somehow sill generate some salesby theplumber
8/4/2026 at 5:31:13 PM
No they won't. They'll offer far superior models at a premium price and they'll capture most of the profits similar to iPhone versus the Android manufacturers.US companies will also release open source models and lower-cost options that will compete with any open source models released by any other country, except when you ask US/western models what happened at Tiananmen Square they'll give you an answer instead of being blocked by an authoritarian government.
Whenever I have these conversations it's like, ok do I believe the incredibly smart people running Google, Facebook, Nvidia, OpenAI, Anthropic, Apple, Amazon, and more who have careers, companies, and trillions of dollars at stake, or do I believe random people on the Internet who say "Open AI and Anthropic will be like Windows Server and open-source models will be better"?
Without extremely strong evidence to the contrary, I'm going to go with what the smartest people in the room are doing. The model and economics make a lot more sense, and fears about Chinese open source models are overblown. When you're behind and frantic you release open source software. If American companies somehow fall behind they'll just release their own better open source software/models and undercut China using the exact same strategy. So either both sides get to employ this strategy and neither has an advantage, or the spend and research matter and America for now has an advantage.
by ericmay
8/4/2026 at 8:50:28 PM
They already offer “superior models at a premium price” but the issue is that they are not that much superior than the open models and in some cases are even worse(I.e Anthropic Fable refuses to fix a login/signup page, not to mention any kind of actual opsec work).You already can do more with open models than with proprietary models because you can’t tweak the proprietary models to your liking. Just as OpenAI and Anthropic went from 0 to a trillion they can go back just as fast.
by theplumber
8/4/2026 at 9:17:27 PM
Well that's a bad example because a UI isn't a model.But if you hold that it's true that returns compound and that they do so for intelligence/performance for AI models, then having the lead matters quite a bit and eventually you'll just get into an iPhone vs Android Dollar General situation where sure they do the same thing and one is even substantially cheaper but all the profits go to the iPhone.
If you hold that the lead doesn't matter, then the buildout of data centers and compute capacity which is also what the Chinese are doing will just go to make money for American companies serving whatever open-source models come into being for the rest of however long the world itself lasts. Then China can take the lead and spend a trillion dollars, we'll copy their models (which according to you is a great strategy), and release them open source.
You can't have it both ways.
by ericmay
8/4/2026 at 6:29:43 PM
> They'll offer far superior models at a premium price> US companies will also release open source models and lower-cost options
This is wishcasting. People are raising the alarm because models like GLM-5.2 and Kimi K3 have already displaced demand for frontier models in highly demanding fields like security research. There's no amount of money that you can pay for "premium" access to Mythos, so those researchers are taking their money to inference providers that give them comparable models.
It's okay if this is your prediction, but it's not particularly grounded in the present scenario.
> ok do I believe the incredibly smart people running Google, Facebook, Nvidia, OpenAI, Anthropic, Apple, Amazon, and more
Why do you conflate all of these businesses with vastly different business strategies to one another?
Apple and Facebook do not have the same AI strategy, same for Amazon and Nvidia or Google and OpenAI. Many of these businesses made expressly terrible choices that hamstrung their ability to capitalize on AI profits. FAIR failed to scale their early Llama models into a service; Apple abandoned OpenCL too early and invested in a dark-silicon NPU coprocessor instead of supporting CUDA's multi-trillion dollar ARM rollout; Google went all-in on hardware research and failed to create a frontier model that moved significant tokens; OpenAI forfeit the frontier to Anthropic, and Anthropic bent over backwards to appease American censorship demands and push cringeworthy marketing campaigns to capture LLM mindshare with Claude.
There is no "American companies" coalition. They're all reacting in drastically different ways and your eagerness to conflate them suggests that you don't have any real position outside tribalist "us vs them" pugilism.
by bigyabai
8/4/2026 at 7:03:31 PM
> This is wishcasting. People are raising the alarm because models like GLM-5.2 and Kimi K3 have already displaced demand for frontier models in highly demanding fields like security research. There's no amount of money that you can pay for "premium" access to Mythos, so those researchers are taking their money to inference providers that give them comparable models.It's not wish casting whatever that means. The crux of the argument isn't as much of a capability one as it is an economic one. If China can release open source models like these to displace demand for frontier models so can American companies. It's just that it's not profitable enough for them to do so at this time.
The point about Mythos doesn't strengthen your argument, it weakens it.
> Why do you conflate all of these businesses with vastly different business strategies to one another?
They have different business strategies, but at the end of the day they are all directionally aligned. Even if you wanted to extract a few of these companies and say they're not relevant, you can grab a handful and just make the same legitimate argument. Do I believe you, or do I believe the people with trillions at stake. I believe the folks actually doing the work and with money at stake. I have yet to find a convincing argument otherwise.
> There is no "American companies" coalition. They're all reacting in drastically different ways and your eagerness to conflate them suggests that you don't have any real position outside tribalist "us vs them" pugilism.
Sure but there's an American government coalition which American companies will have to accommodate whether that's regulation, economic schemes, or otherwise. See? You just proved it right here:
> Anthropic bent over backwards to appease American censorship demands and push cringeworthy marketing campaigns to capture LLM mindshare with Claude.
by ericmay
8/4/2026 at 9:16:35 PM
>It's not wish casting whatever that means. The crux of the argument isn't as much of a capability one as it is an economic one. If China can release open source models like these to displace demand for frontier models so can American companies. It's just that it's not profitable enough for them to do so at this time.I would back you if:
1) The American companies had not run up debts in the $100bn range. 2) If there was an open source business model that could create $100bn companies or pay down $100bn of debt. 3) There was a convincing moat such as a social media network effect - I mean that lasted 10 years or so for Meta - or ways for them to create a supplier based monopoly like MS did with IBM, Dell, Compaq,.. or Google has with Samsung and Apple. I think that it might be that the consumer use case could yet be tied to Samsung and Apple, so Google might do it again, but ATM I dunno if consumer use cases are the thing here.
>Do I believe you, or do I believe the people with trillions at stake. I believe the folks actually doing the work and with money at stake. I have yet to find a convincing argument otherwise.
Go look at SpaceX's shareprice.
You are being taken for a ride.
by sgt101
8/4/2026 at 9:22:16 PM
> 1) The American companies had not run up debts in the $100bn range.How are Chinese companies financing their buildouts of AI infrastructure?
> 2) If there was an open source business model that could create $100bn companies or pay down $100bn of debt.
Companies are formed and consult on Linux for example. Idk where this $100bn number comes from but it seems too low to me anyway.
> 3) There was a convincing moat such as a social media network effect
Well you don't need a moat to be a successful business. But maybe the moat is that the models are just more capable. We're in the very early stages of this stuff from what I can tell.
> Go look at SpaceX's shareprice.
This is a bad argument. Share prices rise and fall all the time with or without material concerns. It can be snowing and folks will sell shares just because. Also SpaceX's share price (not that I'm an investor) doesn't really move the needle relative to the scale of the market or the AI companies involved.
> You are being taken for a ride.
How do you know folks aren't taking you for a ride instead?
by ericmay
8/4/2026 at 7:55:05 PM
> It's not wish casting whatever that means.Wishcasting is describing a hypothetical. Your statement was about what you think America can do, but not about what it has proven to do already. It is wishcasting by any definition you'll find online. Economic roadblocks are not any less important than capability roadblocks, look at how proprietary UNIX went from a billion-dollar IP business to being entirely cannibalized by "good enough" free alternatives like Linux and BSD. You can whine and call Linux/BSD "communist plots" or decry them for being less powerful than AIX, but history was not kind to nonfree UNIX-like software. They died out, and a superior alternative flourished in it's place. Same happened to Texas Instruments, Espressif and STMicroelectronics IP - American adversaries have access to better, cheaper microcontrollers than America's supply chain can compete with. China's clones already won.
> The point about Mythos doesn't strengthen your argument, it weakens it.
Does it? I don't think Anthropic is profitable yet, show me the balance sheet that confirms Mythos and Fable are putting them in the black. Even with "premium" models, Anthropic and OpenAI are both finding out that it's not enough to move the needle. Hell, their desire to IPO should be enough to understand that their future is overpriced B2B rice bowl contracts and not some benevolent B2C relationship like Google and Apple fought over. Even XAI/SpaceX deserves a crumb of credit for recognizing that the winner is whoever helps the US government transgress the laws of God fastest. The taxpayer is the only one that can feasibly foot the bill, and China has recognized this from Day 1 (say what you will about Xi Jinping thought).
> I believe the folks actually doing the work and with money at stake. I have yet to find a convincing argument otherwise.
Some great consolation that would be, if you said the same thing for Enron, Theranos, Vision Pro, Meta Quest, Microsoft Groove, Google+, Juicero, Hololens... why, you could be convinced to buy any of history's most dogshit technology. Remember, an appeal to authority is just one third of effective rhetoric.
> Sure but there's an American government coalition which American companies will have to accommodate
In a so-called free market, that's the most heretical and counterintuitive solution that you can concoct. Laissez-faire lore would have us believe that competition is keeping the market alive, but it's the regulation that is preventing America's businesses from releasing their most powerful models. If this becomes a political policy issue, then China has already won. At that point, America might as well forfeit to save money that would have been wasted on "AGI" research graft.
by bigyabai
8/4/2026 at 8:43:35 PM
> Your statement was about what you think America can do, but not about what it has proven to do already.Sorry that's nonsense. You can't simultaneously project a hypothetical Chinese capability that it hasn't proven it can do (develop the leading models) and then deny the ability of the US to do the same.
> China's clones already won.
Ok we'll just copy their stuff then who cares because apparently bleeding edge model development doesn't matter.
> Does it?
Yes - it proves that leading edge American AI companies can develop products sophisticated enough that they deliver true competitive advantages that have to be guarded. It's like, the thing is so valuable you can't even buy it. Have you ever tried to buy a Ferrari or Lamborghini or something? It's a bit like that.
> Some great consolation that would be, if you said the same thing for Enron, Theranos, Vision Pro, Meta Quest, Microsoft Groove, Google+, Juicero, Hololens... why, you could be convinced to buy any of history's most dogshit technology. Remember, an appeal to authority is just one third of effective rhetoric.
Well if you want to go that route, China will collapse because all communist governments in history except China (and I guess North Korea but that's arguable more of a monarchy of sorts) have failed. Guess that means China loses!
The broader point is you and others are simply saying things, while incredibly smart people with trillions of dollars at stake are doing things counter to your claims. Of course authority isn't a great argument, but considering you haven't provided any sort of economic model that says Google will completely fail at its AI ambitions because idk some Chinese companies released some open source models, leaves us with not a lot of options to go on. Might as well trust the folks with money at stake and who are doing the real work. Why would I trust your comment over Google's business decisions? Yea they could be wrong, it doesn't mean it isn't the right choice at the time.
It's similar to vaccine risk that sprung up during COVID-19. Folks thought they were making an informed decision by eschewing the vaccine in favor of some unknown and unknowable risk instead of the risk that's right there in front of them and known.
> In a so-called free market, that's the most heretical and counterintuitive solution that you can concoct.
But it happened so I'm not sure what to tell you. You yourself have demonstrated that. The free-market can still exists while also being regulated by the government. Evidence? Look around. Separately to claim that the US is losing because it is requiring AI companies to do some sort of thing would also have to apply to China who is doing the same.
> At that point, America might as well forfeit to save money that would have been wasted on "AGI" research graft.
Well, if you're right we should save money and make China spend all of their money building models and then we'll just copy their strategy.
I'm not sure why you and others seem to assume that China (or Iran or whomever) can take some action and that we can't also take some action in response. Let me guess, hypersonic missiles! Iran closed the Strait!? Chinese AI open source?! It's all the same version of a failed mental model. A similar one would be Americans or other westerns assuming that other countries can't do things or aren't smart enough or don't have the ability to build or engineering better things than we can. You're making that exact same mistake here.
by ericmay
8/4/2026 at 6:51:25 PM
> except when you ask US/western models what happened at Tiananmen Square they'll give you an answer instead of being blocked by an authoritarian government.The Chinese models already do that with the absolute minimum of coaxing.
by jorvi
8/4/2026 at 7:04:49 PM
That's like asking what happened at the National Mall!In addition to the incident you were thinking about there was a large protest in 1976 that the current regime would rather you don't know about, Mao announced the formation of "The New China" there, there were important events in the Boxer rebellion, and many more!
by PaulHoule
8/4/2026 at 5:59:54 PM
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”- Upton Sinclair
by bryanlarsen
8/4/2026 at 7:04:10 PM
This applies to open-source evangelists and developers too.by ericmay
8/4/2026 at 6:50:12 PM
The limiting input in an AI future is energy. China understands this. Any hardware disadvantages are temporary. China will build frontier models, and it will even open the weights, but it will win on running the models due to energy infrastructure buildout.by lern_too_spel
8/4/2026 at 6:23:09 PM
The incredibly smart people aren't the ones running those companies. They're the ones actually creating the products.by platevoltage
8/4/2026 at 7:50:28 PM
Sometimes people say AI is the next big thing since the internet and at other it is like cloud computing where companies can charge premium.Both cannot be true at the same time.
If you look back in the early days there were premium ISP providers with better up times and stable speeds. In the long run none have survived because everyone has caught on.
If AI is important then there is always going to be incentive to try something cheaper even if it is not the best - especially on enterprise budgets and the costs can be offloaded to the customer somehow - if the uptime and service stability is guaranteed by a third party provider.
by thisisit
8/4/2026 at 7:19:49 PM
> In a world where open-weight models dominate, the proprietary frontier models of Anthropic and OpenAI will find it virtually impossible to charge monopolistic pricing.It'll never be economical to run open-weight models compared to paying per token from the big providers. The cost is going to be roughly proportional to energy inputs over time, and they're going to be the ones that have the scale and engineering ability to knock it down.
by empath75
8/4/2026 at 8:16:53 PM
But it will be much more economical to pay per token to discount providers running open weight models.by bryanlarsen