I loved this article! Regardless of how you feel about AI as an industry or tool, the economics of AI is fascinating. It's awesome to see something like this that gets into the business side a bit more.

I don't know if I agreed totally with the assessment of the risk Chinese labs pose to US labs though, in particular I think the main part I wasn't sure about was this:

> I highly doubt that Chinese models are cheaper to serve on a marginal cost basis, they just seem cheaper because Anthropic and OpenAI are so supply constrained that they are charging far more than they would if there were sufficient supply to meet the demand for intelligence.

How true is this? My understanding from Deepseek's original paper was that they focused heavily on optimising training and inference costs, in particular so that they can operate on cheaper (and more accessible to China) hardware.

It's possible I'm just not in the loop, but nobody seems to talk about US models innovating in this way (I'm just talking about cost-to-serve/train, not saying US AI companies don't innovate in other ways).

It seems to me at least, like there's a fair bit of evidence that AI shifting to a price based commodity market (vs a "best-model takes all" type market) would put China at a significant advantage? And even more significantly, require a pretty hefty correction of company valuations in the US?