Additionally I think there is something to the idea that they are trying to undermine foreign competition as a stall. They can’t compete economically for geopolitical reasons right now but they also can’t let American firms dominate the rest of the world in that market/technology stack.

The U.S. model is honestly more baffling to me, if the goal is broad economic growth.

But it hasn’t seemed like the U.S. powers have been interested in broad growth for quite a long time now. Just whatever can line their own pockets.

The Chinese strategy is to fool naive westerners into thinking that's their strategy (looks like its working), until they can buy time to do the American strategy.

Hence, buying up and closing up foreign competition then whining about it when it's blocked: https://www.dw.com/en/china-firm-seeks-damages-over-state-co...

While I completely agree with your take, I think everyone has been surprised by how quickly LLMs have become highly useful and extremely powerful, and by how possible it is for relatively smaller models to also be highly useful.

Given that, I would expect that in hindsight OpenAI and Anthropic would spend 40% of what they have on compute if starting over and knowing the actual landscape.

The massive capital allocation was a blind decision and they swung big.

It is still possible that techniques will be developed that create a moat where the massive hardware capex is justified, but US policies of banning competitive GPUs and blocking frontier lab releases makes such things far less likely.

"Escape velocity" for AI is when the open weight models are good enough to help drive the next frontier innovations/techniques. I think we are close to that if not already there, at which point it's a race to commoditization no matter what Altman or Lutnik wish will happen.