> 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.
> 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.
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.
China is not “just china”, it’s a totalitarian regime without freedom if speech, without worker’s rights and without many/most of the freedoms we take for granted.
“China wins” is really “modern hyper/technological communist totalitarian regime wins”
Or a pretext for war... US deliberately wants a war with China, otherwise their leading position is nil and the shenanigans surrounding AI will not work.
There can't be two spoon bending entities in the matrix.
Hardly anybody is talking about the biggest political aspect of open weight LLMs (actually, any LLMs):
Because they instantly and reliably(tm) give you the information you want in the format you want it in, they are going to replace the web search as the dominant mode through which information is disseminated - if, indeed, this hasn't already happened. As such, LLMs are effectively a form of publishing for their training data.
Which means a vicious fight for control over what goes into LLMs, and strong incentives to widely disseminate useful LLMs that encode your structural biases, instead of some adversary's. We already talk about Chinese models that won't talk about Tiananmen Square, but that's eye-rollingly sophomoric compared to what the stakes are now. Imagine a model that subtly discourages entrepreneurship, because its creator doesn't want upstart competitors. All questions of media bias are multiplied incalculably when LLMs are folded into all of society.
I think we need to take LLMs seriously as sovereign projects that are as critical to the democratic experiment as a free press. Funding needs to be nationalized; training needs to be conducted in the open, on open datasets; fine tuning needs to follow democratic principles. Only then will they be fit for purpose for their inevitable structural destiny: arbiters of human opinion.
People keep saying that the open models are cheaper. Until recently that seemed true because they were smaller. And some of the best smaller models are still open and cheap. But K3 with its 2.7T parameters is never going to be really cheap.
Chinese open weight models constitute AI communism? What about all the "what's yours is mine" moral reasoning that goes into making the models? These companies get pissed off at companies distilling their models, because sucking the vital essence of something while leaving the real thing as a husk to die (their posture towards people who make art, and software) is apparently "morally bad" when someone else is doing it to them.
Square that circle for me please -- how are OpenAI and Anthropic not communist companies? They appropriate property and claim that "the good of the many" is enough to justify it.
There was an interesting discussion on pricing in the recently leaked DeepSeek investor meeting, where CEO Liang Wenfeng went on at length about his personal philosophy on pricing which in the end, for them, comes down to pricing models so as to be able to recoup the cost of the hardware they are running on in 10 months.
He doesn't want to drop prices below that since at their already very cheap prices doing so doesn't increase demand. More interesting are his reasons for not wanting to price higher, which are hard to summarize from memory, but are based around this being a sustainable business model. Pricing higher will only encourage competition.
Note that DeepSeek are not trying to compete with the likes of OpenAI and Anthropic, at least at this time, acknowledging that they just don't have access to the compute to do so (although they have plently of money). This pricing is not about competing with the west - just his own pricing philosophy.
Maybe DeepSeek is a special case, being a hedge fund, and to large degree developing for their own needs (a bit like Meta, perhaps), but nonetheless they are out there as part of the competitive landscape.
No doubt Anthropic and OpenAI have a radically different strategy on pricing - seemingly more just what the market can bear, but with a company like DeepSeek they are not battling "AI communism", just a de facto competitor with a very different philosophy.
Other companies like Moonshot and Alibaba seem to want to charge as much as possible, at least in part because they are now offering these massive ~3T models that are expensive to serve.
...a United States presidential administration that almost certainly will not be able to deal quickly and competently with a massive financial crisis.
Meh, admittedly this sidenote but ... this is why the Fed is separate from the administration and why the Senate insists on competent people for Treasury while allowing loon like JFK jr for Health. The Fed already quietly supports a lot of capital allocation in the economy and is basically fending off crisis continually.
So-called "modern monetary theory" says the state prints money and exerts control and there's no problem. Yes, with enough, the state can stop any plunge. It's just that means enterprises - in the US - depend on the state rather than the markets. And this promises more of USSR like collapse than a market crisis. See Hyman Minski etc
Edit: and this doesn't mean there can't be a crisis of sorts. It's like 2008 or the failure of Silicon Valley Bank. One player falls, the rest supported, the excess is culled a little and then comes back twice as hard.
Haven't really seen competitive market capitalists worried about AI communism.
Plenty of left-leaning and communists and communists adjacent worried about ai, however.
I don't think the open source models are anywhere near ("we’re talking around four months of lead time") Anthropic's Fable for long-horizon context planning. Sol isn't either. The benchmarks are quite misleading. The short-term question is how many customers need these deep problem solving capabilities? The long-term question is what will the frontier labs build (deepening and broadening of capabilities and products) if they are capitalized as they desire?
"Communism" is a weasel word in this context. Nothing about modern AI industry is anywhere close to what makes communism communism. Modern non-local AI is all about the highest values of capitalism.
FWIW, I switched to K3 last week and only went back (begrudgingly) to Opus when I hit a rate limit. First open model I haven't had the itch to leave on the shelf. It works as well as Opus 4.7/4.8 and in many cases (anecdotal, daily usage), I found it outperformed it.
It’s fear of the US not controlling everything, if we don’t have the leading spot it must be evil or someone must have cheated, everyone knows it’s impossible for the US not to be #1.
/sarcasm
22 comments
[ 1.8 ms ] story [ 7.5 ms ] threadMaybe 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.
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.
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.
Self isolation by the USA won't change the overall results.
Isolation is weakness, not strength.
It is a prescription for economic stagnation, decline and exploitation by home grown corporate interests that won't/can't compete anywhere else.
The best opportunity to counter China was with full cooperation from the rest of the world.
This adminstration has rejected this opportunity --- and is inadvertently working to "Make China Great Again".
http://rdcy.ruc.edu.cn/yw/LATEST_INSIGHTS/b7bdcf47e8a2489085...
China is not “just china”, it’s a totalitarian regime without freedom if speech, without worker’s rights and without many/most of the freedoms we take for granted.
“China wins” is really “modern hyper/technological communist totalitarian regime wins”
Honest questions:
What does it mean for a nation state to "win" in this context?
Assuming I don't like totalitarian oligopoly in the United States OR China, what realistic outcome should I be hoping for?
The policy and the keyword should have been collaboration and not cooperation.
There can't be two spoon bending entities in the matrix.
Because they instantly and reliably(tm) give you the information you want in the format you want it in, they are going to replace the web search as the dominant mode through which information is disseminated - if, indeed, this hasn't already happened. As such, LLMs are effectively a form of publishing for their training data.
Which means a vicious fight for control over what goes into LLMs, and strong incentives to widely disseminate useful LLMs that encode your structural biases, instead of some adversary's. We already talk about Chinese models that won't talk about Tiananmen Square, but that's eye-rollingly sophomoric compared to what the stakes are now. Imagine a model that subtly discourages entrepreneurship, because its creator doesn't want upstart competitors. All questions of media bias are multiplied incalculably when LLMs are folded into all of society.
I think we need to take LLMs seriously as sovereign projects that are as critical to the democratic experiment as a free press. Funding needs to be nationalized; training needs to be conducted in the open, on open datasets; fine tuning needs to follow democratic principles. Only then will they be fit for purpose for their inevitable structural destiny: arbiters of human opinion.
Square that circle for me please -- how are OpenAI and Anthropic not communist companies? They appropriate property and claim that "the good of the many" is enough to justify it.
He doesn't want to drop prices below that since at their already very cheap prices doing so doesn't increase demand. More interesting are his reasons for not wanting to price higher, which are hard to summarize from memory, but are based around this being a sustainable business model. Pricing higher will only encourage competition.
Note that DeepSeek are not trying to compete with the likes of OpenAI and Anthropic, at least at this time, acknowledging that they just don't have access to the compute to do so (although they have plently of money). This pricing is not about competing with the west - just his own pricing philosophy.
Maybe DeepSeek is a special case, being a hedge fund, and to large degree developing for their own needs (a bit like Meta, perhaps), but nonetheless they are out there as part of the competitive landscape.
No doubt Anthropic and OpenAI have a radically different strategy on pricing - seemingly more just what the market can bear, but with a company like DeepSeek they are not battling "AI communism", just a de facto competitor with a very different philosophy.
Other companies like Moonshot and Alibaba seem to want to charge as much as possible, at least in part because they are now offering these massive ~3T models that are expensive to serve.
Meh, admittedly this sidenote but ... this is why the Fed is separate from the administration and why the Senate insists on competent people for Treasury while allowing loon like JFK jr for Health. The Fed already quietly supports a lot of capital allocation in the economy and is basically fending off crisis continually.
So-called "modern monetary theory" says the state prints money and exerts control and there's no problem. Yes, with enough, the state can stop any plunge. It's just that means enterprises - in the US - depend on the state rather than the markets. And this promises more of USSR like collapse than a market crisis. See Hyman Minski etc
Edit: and this doesn't mean there can't be a crisis of sorts. It's like 2008 or the failure of Silicon Valley Bank. One player falls, the rest supported, the excess is culled a little and then comes back twice as hard.