1. they still have revenue though. it might not enough to cover all the r&d but it is surely enough to cover the hardware cost.

2. people tend to ignore this, but the salary budget of a US frontier lab and chinese frontier lab is nowhere comparable, the first can easily outdone the later by 100x.

3. us labs, like other US style startups, always throw ton of money to capture the market. I don't see the chinese company doing the same scheme at all.

so, surely chinese AI providers also lost money making new models, but they are not spending nearly as much as US ones.

By charging $$$ like they do now and having a non terminal business model.

PRC AI have lower opex and capex, i.e. export controls means they couldn't be trillions in the hole on inflated hardware in the first place. They only need to extract a few 10s of billions from domestic market have a healthy runway. If investors/gov wants to throw in a few billion to treat as utility, whatever, it's still rounding error.

just like there were mistrals, coheres, llamas, etc, there will be new deepseeks and moonshots if those ever flame out (worst case, given out at cost by google, meta, alibaba or etc)

OpenAI and Anthropic are already in a ~200bil hole from previous model iterations and are committing to trillions of additional spending

OpenAI spent more TBPN than kimi spent on training K3

They are owned by the state, so the economics are a bit different.

By charging $$$ like they do now and having a non terminal business model. PRC AI have lower opex and capex, i.e. export controls means they couldn't be trillions in the hole on inflated hardware in the first place. They only need to extract a few 10s of billions from domestic market have a healthy runway. If investors/gov wants to throw in a few billion to treat as utility, whatever, it's still rounding error.

At a fraction of the cost.