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I can understand that the AI labs might care about other labs distilling their models as it can eat into their competitive advantage, but do consumers care at a

by bradfa 2mo ago

I can understand that the AI labs might care about other labs distilling their models as it can eat into their competitive advantage, but do consumers care at all? Aren't consumers benefiting from this practice by getting better cheaper models as a result?

warkdarrior 2mo ago
I demand my right to pay 3x more for AI access. cf https://www.reddit.com/r/codex/comments/1uyj6pq/kimi_k3_is_13_the_price_of_fable_5_and_beating_it/ https://www.reddit.com/r/codex/comments/1uyj6pq/kimi_k3_is_1...
- gruez 2mo ago
  But nobody really pays the 3x (ie. api) rates, except for enterprises. Everyone else are using the consumption plans, which are heavily discounted[1], possibly cheaper than even the chinese models, which don't do consumption plan discounts. Even in your linked reddit thread, the OP agreed with this sentiment. [1] https://x.com/SemiAnalysis_/status/2064815044085318040 https://x.com/SemiAnalysis_/status/2064815044085318040
  - fragmede 2mo ago
    Psh. Enterprises. There can't be more than a couple of them out there.
  - applfanboysbgon 2mo ago
    For now. We've seen this pattern play out literally a hundred times in tech and you're incredibly naive if you think this will last forever. And what is your point? It should be okay for US consumers if the US government illegalizes accessing open-weight models within their borders because they're currently getting a subsidized token rate?
  - bdcravens 2mo ago
    There are many consuming APIs for Hermes.
  - charcircuit 2mo ago
    I have paid API rates. I needed AI to cleanup file space and I didn't want to gamble with the alignment of Chinese models.
gruez 2mo ago
They're probably going for the national security/domestic manufacturing angle. > Aren't consumers benefiting from this practice by getting better cheaper models as a result? Aren't consumers benefiting from cheap chinese batteries, EVs, and drones?
- verdverm 2mo ago
  > Aren't consumers benefiting from cheap chinese batteries, EVs, and drones? Depends on what country you live in I suppose, but likely a spectrum of yes than any outright no. For example, Chinese EVs are using a different battery chemistry and not putting demand pressure on the more expensive chemistry western manufacturers use
  - trollbridge 2mo ago
    I was surprised to learn Ethiopia is nearly all EV now. They are a petroleum products importer, so it’s a big win for them.
- caconym_ 2mo ago
  I am not sure if this is implicitly part of the point you meant to make, but I just wanted to point out for those who aren't aware that Chinese EVs and drones are both banned in the US on precisely the (vague) grounds you mention. The drone ban is more recent and nominally only affects new models that haven't yet received FCC certification, but the outcome if nothing changes will be that American consumers lose access to DJI-style videography drones. DIY hobbyists may also find it more difficult or impossible to source parts for their projects. Routers have now gotten the same treatment. So yes, consumers have been historicaly benefiting from all these things, and those benefits are about to evaporate as we lose access to cheap and high quality Chinese products before any domestic equivalents exist. And IIUC banning the use of Chinese LLMs for consumers and/or businesses in the US is now being discussed at the highest levels of government, with the "encouragement" of US AI firms. I don't think any of these people care that America consumers are increasingly going to feel like they're living in a sanctioned country. It's all about the defense and b2b segments.
deleted 2mo ago
[deleted]
paxys 2mo ago
It’s the same as the patent argument. If everyone could freely copy everything then yes in the short term prices would drop and consumers would benefit, but over the long term it would discourage investment into new technology because a return would be impossible.
- rstuart4133 2mo ago
  > It’s the same as the patent argument. The Chinese are open-sourcing these models - meaning they are literally giving them away. That's starkly different behaviour from that which drove patents and copyright. There are all sorts of other differences too. If you develop a drug or publish a novel (which are respectively areas where patents and copyright have strong justification), you have to kiss a lot of toads before you get a prince. Once you have a potential prince drug, it takes years and billions to get it into the market. But right now, AI labs are seemingly churning out new prince models almost weekly, on hardware that will be obsoleted in a few years by hardware that makes finding princes faster and cheaper. In fact they rent the hardware, as Moonshot apparently did here. When innovation is happening at that rate, patents and other IP restrictions just slow things down. If AI patents are aggressively granted and enforced in the USA, I suspect the outcome would be the same as batteries. China swept the market with LFP, and one reason was because while the USA developed them, there was no competition forcing the manufacturing price down because in the USA the patents weren't re-licensed cheaply. China had the foresight to secure a deal allowing them to develop and sell LFP domestically royalty-free. Natural competition within the domestic market took care of the rest. It looks like they are using a similar strategy for AI. To me it looks like they have come up with a better formula for using capitalism to drive innovation than the one the USA is using.

by bradfa 2mo ago

warkdarrior 2mo ago

I demand my right to pay 3x more for AI access. cf https://www.reddit.com/r/codex/comments/1uyj6pq/kimi_k3_is_13_the_price_of_fable_5_and_beating_it/ https://www.reddit.com/r/codex/comments/1uyj6pq/kimi_k3_is_1...

gruez 2mo ago
But nobody really pays the 3x (ie. api) rates, except for enterprises. Everyone else are using the consumption plans, which are heavily discounted[1], possibly cheaper than even the chinese models, which don't do consumption plan discounts. Even in your linked reddit thread, the OP agreed with this sentiment. [1] https://x.com/SemiAnalysis_/status/2064815044085318040 https://x.com/SemiAnalysis_/status/2064815044085318040
- fragmede 2mo ago
  Psh. Enterprises. There can't be more than a couple of them out there.
- applfanboysbgon 2mo ago
  For now. We've seen this pattern play out literally a hundred times in tech and you're incredibly naive if you think this will last forever. And what is your point? It should be okay for US consumers if the US government illegalizes accessing open-weight models within their borders because they're currently getting a subsidized token rate?
- bdcravens 2mo ago
  There are many consuming APIs for Hermes.
- charcircuit 2mo ago
  I have paid API rates. I needed AI to cleanup file space and I didn't want to gamble with the alignment of Chinese models.

gruez 2mo ago

They're probably going for the national security/domestic manufacturing angle. > Aren't consumers benefiting from this practice by getting better cheaper models as a result? Aren't consumers benefiting from cheap chinese batteries, EVs, and drones?

verdverm 2mo ago
> Aren't consumers benefiting from cheap chinese batteries, EVs, and drones? Depends on what country you live in I suppose, but likely a spectrum of yes than any outright no. For example, Chinese EVs are using a different battery chemistry and not putting demand pressure on the more expensive chemistry western manufacturers use
- trollbridge 2mo ago
  I was surprised to learn Ethiopia is nearly all EV now. They are a petroleum products importer, so it’s a big win for them.
caconym_ 2mo ago
I am not sure if this is implicitly part of the point you meant to make, but I just wanted to point out for those who aren't aware that Chinese EVs and drones are both banned in the US on precisely the (vague) grounds you mention. The drone ban is more recent and nominally only affects new models that haven't yet received FCC certification, but the outcome if nothing changes will be that American consumers lose access to DJI-style videography drones. DIY hobbyists may also find it more difficult or impossible to source parts for their projects. Routers have now gotten the same treatment. So yes, consumers have been historicaly benefiting from all these things, and those benefits are about to evaporate as we lose access to cheap and high quality Chinese products before any domestic equivalents exist. And IIUC banning the use of Chinese LLMs for consumers and/or businesses in the US is now being discussed at the highest levels of government, with the "encouragement" of US AI firms. I don't think any of these people care that America consumers are increasingly going to feel like they're living in a sanctioned country. It's all about the defense and b2b segments.

deleted 2mo ago

[deleted]

paxys 2mo ago

It’s the same as the patent argument. If everyone could freely copy everything then yes in the short term prices would drop and consumers would benefit, but over the long term it would discourage investment into new technology because a return would be impossible.

rstuart4133 2mo ago
> It’s the same as the patent argument. The Chinese are open-sourcing these models - meaning they are literally giving them away. That's starkly different behaviour from that which drove patents and copyright. There are all sorts of other differences too. If you develop a drug or publish a novel (which are respectively areas where patents and copyright have strong justification), you have to kiss a lot of toads before you get a prince. Once you have a potential prince drug, it takes years and billions to get it into the market. But right now, AI labs are seemingly churning out new prince models almost weekly, on hardware that will be obsoleted in a few years by hardware that makes finding princes faster and cheaper. In fact they rent the hardware, as Moonshot apparently did here. When innovation is happening at that rate, patents and other IP restrictions just slow things down. If AI patents are aggressively granted and enforced in the USA, I suspect the outcome would be the same as batteries. China swept the market with LFP, and one reason was because while the USA developed them, there was no competition forcing the manufacturing price down because in the USA the patents weren't re-licensed cheaply. China had the foresight to secure a deal allowing them to develop and sell LFP domestically royalty-free. Natural competition within the domestic market took care of the rest. It looks like they are using a similar strategy for AI. To me it looks like they have come up with a better formula for using capitalism to drive innovation than the one the USA is using.