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> China aren't offering a cheaper solution. They are subsidizing an existing one

Chinese labs are also pursuing legit frontier-advancing R&D into efficiency and publishing papers in the open, a culture that's in retreat at top American AI labs

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Their is plenty of innovation happening on both sides of the Pacific. Again, China publishes open source because they don't have another game they can play. They distill because they don't have the compute to compete. They are great lab, for sure, but the fundamentals are driving their behavior.
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The fact that are people that genuinely believe you can train an LLM by using random QAs obtained from another LLM is astonishing. Let alone the fact that it makes absolutely zero financial sense.

At this point this is being repeated so often that completely uninformed users are taking this at face value.

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Oh yeah. Strategic disruption technique or not its a breath of fresh air.
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> China aren't offering a cheaper solution. They are subsidizing an existing one (which is already subsidized) in order to gain foothold.

In my economics classes, we were told that (in a "free market" argument) the best thing to do if a subsidy is making something you want cheaper is to use it. You're getting your thing, and at a reduced cost.

(I'm not really replying to you per se, I'm curious how "free market" folks in these comments would respond to this.)

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This is why I don't understand why people complain about impractically cheap Chinese solar panels. The rest of the world should buy enormous quantities and bankrupt the mofos and hugely benefit along the way. Then later they can set up their own solar panel industries.
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Because they arent selling at a loss. The business pipeline is subsidized by the state. But end to end from mining the minerals to shipping you the solar panel everything is "in house". Its all in China. Thats why why can sell so cheap. Its even cheaper to make.

This narative that the CCP is just subsidizing all business to "beat america" is just dumb. Its the build process being made cheaper by the government. Not the final product.

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Let’s not act like the US government isn’t subsidizing AI either with massive contracts. Anthropic is selling subscriptions at a loss; reselling tokens is just arbitrage.
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The US government subsidizes US AI labs via incentives.

The CCP is the Chinese AI labs.

I am not aware of any US government AI labs (besides perhaps a small spattering of national lab research or the like)

There is very large difference that your either need to be poorly informed or purposely driving an agenda to miss.

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I’m sad for you that propaganda has destroyed your critical thinking ability. Qwen is an Alibaba product, Deepseek is from a private Chinese hedge fund. Those are not the CCP. The Chinese economy has vastly evolved in the last decades. The CCP doesn’t have any more special control over the Chinese labs than the US has over our labs. The White House can do whatever it wants to keep labs in line. Fable just got pulled because the US gov ordered Anthropic not to give access to any foreign nationals, including Anthropic employees.
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Please, show me one Chinese court ruling against the CCP and I will believe you. Anthropic can go to court and have the order overturned if it isn't legal (with legality being born from elected representatives), it happens all the time.

Just because Xi Jinping lets companies play mock "private businesses", does not mean there actually is private business. At the end of the day, the CCP still has final say in everything, and Xi has final say in the party. There is no constitution (in the US judges swear to the constitution, in China they swear to the party), and there is no balance of powers.

It's just one guy, running experiments the way he see's fit.

You mentioned propaganda, take heed.

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How many court orders has the US govt completely ignored? Do the bought and paid for members of SCOTUS ever rule against Trump or their donors?

> It's just one guy, running experiments the way he see's fit.

This is moronic. Exercising a degree of control does not equate to making every decision and running every organization.

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Well they shot down his landmark tariffs for one, and the next court ordered refunds so...I'd be delighted if you could share cases of the government ignoring court orders (not to be confused with challenging them, like any functioning legal system has).

Also, obviously Xi doesn't make every decision. No dictator ever did that because it's impossible to do. The distinction is that no one has ever (or has the ability) to over rule what Xi decides. So if Xi has a stroke and wants DeepSeek to start manufacturing underwear, they will be ordering sewing machines tomorrow. Any sense of "private" is a farce.

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As far as I can tell, the Chinese government itself is complaining about 'oversupply' in the solar panel market. Ie it doesn't sound like they are subsidising it anymore.
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The Chinese government has stopped direct subsidizing solar panels years ago. I think it was around 2019? This resulted in a lot of companies going under at the time.

It did not stop solar panels getting cheaper and cheaper because of the whole integration and mass production (with healthy free market competition).

The last subsidies like export value-added tax rebates for solar panels and lower rebates for batteries are ending in 2027.

China their main power is, the ability to have everything inhouse. Yea, they subsidize a lot of stuff until it hits critical mass, and then you have often a healthy industry with lots of competition.

China alone has like a few 100 car manufactures because of the subsidies, and over time there will be consolidation / buyouts etc but the end result is a healthy new industry that exports. With again, everything internally being produced.

This is why our subsidies fail. We do one sector, often a few companies at best. This results in few competitors, expensive prices, and often reliance on externals that can bankrupt those companies. And que how we wasted again dozens of billions in propping up a industry with no competitive edge.

People can cry about China but they are actually doing work, despite the mass amount of corruption. That is the big difference with here... Mass corruption got in the way of national security, plop, people go to jail. Industry quickly gets their ** together. Here ... give billions, and the money vanishes, with no real consequences.

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Selling at a loss isn't required.

Local governments are over-funding numerous producers (though cheap loans and other subsidies and incentives) creating excess competition. This is an ongoing problem and is a huge misallocation of capital. Increasing demand just drives this process harder and puts downward pressure on margins. As soon as they try raising prices, or just through satisfying total demand, demand collapses and they (almost) all go out of business.

The Chinese model has weaknesses, we should be exploiting them.

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the fact that you think an organization that pulled 300 million people out of poverty in 20 years with strategic planning and a controlled economy has this not covered is mind blowing. they killed the made in USA slogan in less than 40 years. they'll be fine.
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The textbook poverty which are created by such organization itself with strategic planning and a controlled economy in the first place, killing ~30 million. All the more impressive it only took them under 10 years.
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Most everything they teach in economics class is wrong. You would be better off ignoring everything they teach you.
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Could you elaborate?
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> China aren't offering a cheaper solution. They are subsidizing an existing one

So basically like US companies subsidizing offerings with selling user data, ads for crypto scams, manipulation for elections, making people addicted to gambling and so on?

Seems fair and an improvement as you can choose between that and not. Unlike say offerings from Meta where the data selling and efforts to further gambling addiction is always included.

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Which part are we supposed to have an issue with? The selling data to offer cheaper compute? Products taking over markets with below cost pricing because they have money and ruining the free market?

Because all of that is considered totally okay when every single US big tech company does it.

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All I can say is lol. DeepSeek showing 3 order of magnitude efficiency gains over the performative capital furnace that was training and inference absolutely moved the bar here.
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Chinese models are years ahead of american models on multimodal comprehension, better yet,they publish on what makes the models tick and release weights openly.

Chinese research outout, publically released, has also contributed in big ways to features present in every single US model. Yours is a bit of an unfair take I'd say.

Besides, claude will think its chatgpt sometimes, so clearly this isn't a problem restricted to china, turns out unethical companies will do unethical things /shrug

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A trillion dollar ipo jist occurred for a company whose main line of business is almost entirely subsidized by government contracts
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Is buying launch services really a subsidy, or did I misunderstand?
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> This isn't "the market working as intended", this is an exhaustion fight to the bottom where the one with most money gets to stay in the market. As with most venture capital startups. I believe this VC tactic is a well documented "cheat code" to bypass market forces and build a monopoly. I find it hard to compare that with a free market.

Why? Lots of people try this tactic, but hardly anyone ever succeeds. Meanwhile, the customer benefits.

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Lots of people have succeeded. Neither Anthropic nor OpenAI has any technical advantage in the field of subscription engineering.
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Please give me a few examples of people succeeding with the technique.

Specifically, examples of people later exploiting their monopoly to charge people more than they otherwise would have paid.

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Amazon and diapers.
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Ubers have become pretty expensive these days.
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Well, is Uber a monopoly and collecting monopoly rents?
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I use Lyft because my phone is too old to run the Uber app. This says nothing about market share obviously.
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> This isn't "the market working as intended", this is an exhaustion fight to the bottom where the one with most money gets to stay in the market.

That's, uh, pretty much exactly how oligopolistic markets function.

> I find it hard to compare that with a free market.

Well, to have free market you need to remove as much barriers to enter the market as possible. Huge capital investments required for entry and intellectual property laws are two examples of such barriers. Subsidies kinda supposed to help alleviate the first one.

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I mean, for what it's worth, we have subsidized Anthropic by allowing them to train on copyrighted stuff. (I know it is still legal, and I support the legality, but the economics are what they are with people's content paying a big one time subsidized cost (to the level of at least 500B).

So, the least Anthropic can do is pay it forward.

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I am mostly economics illiterate but I understand a subsidy to be an economic concession given by the state to an entity which gives said entity a relative advantage compared to its peers.

In that sense (which could very well be bogus), letting a company violate individual IP of basically every human is less of an economic concession and more of unconsented to IP open season.

Even if one were to drop "economic" from "economic concession" and instead view a subsidy through the lens of a more general concession, one could say that the US Govt gave US AI companies a legal concession to sidestep the copyright protections of other US entities. But the US Govt should only get to undermine the copyright protection of other US entities - who gave American companies the right to violate the copyright of non-Americans?

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That's some "download a car", $100000 per infringement pricing logic. No one is paying anyone 500 billion dollars. I'm sure rights owners wanted that, and more too, but it's nonsense to call it a subsidy that they didn't get it.
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If we as individuals were sued it surely would be at least an order of magnitude difference between what is required from us vs Anthropic or OpenAI. That’s even completely ignoring the marginal utility of money. It is absolutely a subsidy. It’s just less fair because that power, to pay pennies on the dollar, is only given to corporations.
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doesnt VC money subsidise stuff all the time? Isnt that how Uber and AirBNB undercut competition?
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The VCs footing the bill is really your pension funds and 401Ks and banks passing through the VCs. If VCs lose money the contagion spreads through the economy.
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