This is great for competition! Chinese vendors offering a cheaper solution = what economics told me the free market was all about.

I also learnt that Anthropic should get better at what they do if they want to compete. If not, somebody else will win.

Or does this not apply to huge US corporations any more?

>This is great for competition! Chinese vendors offering a cheaper solution = what economics told me the free market was all about.

Yeah, like all those Chinese bootleggers selling DVDs for a few dollars rather than $20. Free market!

https://news.ycombinator.com/item?id=48664814

"Information wants to be free"

Anthropic profited from training its models on all kinds of copyrighted information, live by the sword, die by the sword...

Their model weights, training data, training methods, etc are all going to leak to China over time.

Nobody on a site named _Hacker_ news should be all that upset about this.

Seriously AI companies complaining about fair use is the biggest case of crocodile tears I can think of. Irony has been dead for a while, but they dug up the corpse and set it on fire anyway.

Totally agree.

You’re mistaking the original term hacker, a tinkerer of systems, for the black hat variety.

There is no real difference

It’s true that the meanings of words can change over time. Whether or not that’s a good thing is another question entirely.

Yes there is.

Care to elaborate on your side or should we just leave it there?

there is, the original hackers built thinks, they didn't attempt to destroy or coopt them

I suppose his point was that the both parties are black hats.

black and white hat is relative. someone breaking into a state run database in a dictatorship and stealing documents that prove some opposition leader was murdered would be a black hat criminal if you ask their government. a hacker jailbreaking a phone to let people fix it without expensive official service is a black hat to the company. we should really switch to saying offensive and defensive or something else that doesnt come with moral implications. maybe lawful and chaotic.

What true hackers really did was discuss the definition of the word and how to use it

Hackers didn't use to spend a lot of time defending trillion-dollar corporations and their intellectual property rights.

Don't forget insider threat vector, too.

I deliberately didn't mention any threat vector.

I would assume China is working on liberating Anthropic weights through the battle-tested strategy of finding someone in a privileged position and getting them laid, etc.

Los ricos también lloran (1979)

Bootlegging is copyright theft.

Is Claude output copyrighted?

If anything, a tremendous amount of Claude’s input is copyrighted.

If there’s any bootlegging going on it’s Anthropic that’s doing the bootlegging but having mirrored the video etc sufficiently to beat copyright law.

>Bootlegging is copyright theft.

Ok, but what about those shady sites that resell Windows education keys? They're certainly a "better experience" than buying legit keys, by virtue of being significantly cheaper. You aren't even really committing copyright infringement in the process, because Microsoft gives out windows isos for free, and the seller is really selling a random 25 character string, which can hardly be copyrighted.

>If there’s any bootlegging going on it’s Anthropic that’s doing the bootlegging but having mirrored the video etc sufficiently to beat copyright law.

US courts have consistently ruled it's fair use.

>>If there’s any bootlegging going on it’s Anthropic that’s doing the bootlegging but having mirrored the video etc sufficiently to beat copyright law.

>US courts have consistently ruled it's fair use.

And they also have ruled that the that output of an AI isn't copyrightable.

As such copying claudes output isnt even fair use as that is an exemption to copyright but the same as copying public domain work which any and all are allowed to do.

> US courts have consistently ruled its fair use.

Like Adam Smith wrote in The Wealth of Nations “‘Free market’ is when a company receives a favorable ruling about copyright in the United States”

and Chinese courts are ruling that using Claude is fair use.

american courts have ruled that theres no copyright at all on LLM outputs

> Ok, but what about those shady sites that resell Windows education keys?

Yes, they are fine? They might no longer include full first party support by Microsoft for not being "new". Same as buying a used car (also comes with the "shady sites" for a far longer time).

Though this not making any difference by Microsoft not doing any support either way to make more money is a business decision by Microsoft.

What about those store brand cereals? “Chocolate puffed balls” for a fraction of the price of Cocoa Puffs™?! You all may laugh until your waterways are under siege and you find Cap’n Crunch™ keelhauled by thrifty shoppers

> because Microsoft gives out windows isos for free,

… with a license that only allows you to use it for certain purposes, subject to certain restrictions.

> and the seller is really selling a random 25 character string, which can hardly be copyrighted.

1. Copyright is about creative works. It is possible to have a meaningful creative work no more than 25 characters long (or equivalent). Music is particularly good at this.

2. The key itself is not copyrighted (it’s not a creative work), but is reasonably interpreted as a copyright circumvention device. See also https://en.wikipedia.org/wiki/Illegal_number.

The current case law in the US is that the raw output of an LLM cannot be copyrighted without further meaningful arrangement or alteration by a human author.

I think renting out ID to let others in without telling the admin is generally unlawful in many places

The output of Claude is not eligible for copyright protection. I'm not sure how the analogy of bootlegging DVDs would work, given that.

I suppose you are violating the TOS by reselling a service, even if the output can't be claimed as belonging to anyone.

Sure, and Anthropic is allowed to cancel the licenses of people doing that, as they do

You can write anything in TOS, many parts of it is non-enforceable and depends a lot on the local laws.

It's quite curious how multi billion dollar enterprises can't compete with a Chinese bootlegger with a big jacket, tbh.

Imagine having such a warchest and being so bad at business, lol.

My biggest concern with pirating has always been malicious programs. But companies still need to show value in their products or people will pirate.

What added value can Anthropic give users not available to pirating users? That is what they should ask themselves.

ZDR but that is meaningless if the person wants to do nothing more than cheat on homework (or has enough hardware to run a local model)

any third party provider can offer zdr. if its a reputable company in a place like switzerland or germany i would trust them more than anthropic to hold up that promise.

Bad at business? One of them has to make the thing.

Maybe the making of the thing should be paid for before it's made, rather than hoping that selling copies will recoup the investment. I.e., go back to patronage while abolishing copyright.

This doesn’t support your previous theory.

This type of "resource curse" paints a perfect picture of why US based frontier providers are set up to fail. They want, and have, few restrictions and along with that unlimited warchest. The Chinese on the other hand aren't burning billions like millions. Anthropic, OAI, Google, Meta... They're all phenomenal examples of waste, corporate greed, inefficiency and are the reasons people hate tech bros at this point. Whining and crying from their super yacht, Parkinson's law is alive and well!

BigAI are all in the bootlegging market themselves, so it's always funny to see them complaining about others copying their "product".

And those darned printing presses distributing works that were written prior to their existence.

I bet you've downloaded a car.

> Yeah, like all those Chinese bootleggers selling DVDs for a few dollars rather than $20. Free market!

It's supremely ironic analogize distillation to copyright infringement when it's literally what Anthropic was found guilty of. It's not illegal to distill. It is illegal to pirate. And it's what Anthropic was found guilty of, not Alibaba.

https://apnews.com/article/anthropic-authors-copyright-judge...

This is also a good thing fwiw.

More like one bootlegger complaining that another bootlegger is copying their bootleg DVDs.

Free market would of course allow bootleg DVD sales, state regulation that gives monopoly rights restrict it.

In the context of LLMs, monopoly rights haven't been created (yet anyway).

Fun fact: for a period the US (or american colonies) didn't have copyright but Europe did, so people could copy and sell English (and other) books for free.

Except Anthropic didn't produce the movie.

So it's more like one bootlegger sold the DVD for $20 and their competitors are undercutting them for $1. Who's the bigger thief here now?

Capitalism as intended!

I get the vague impression that this was written in a sarcastic way, but it has a straightforwardly true literal read because yes, this is what the free market is about and Anthropic will have to compete with the Chinese if they want a big share of the market. Chinese models are cheap and good; even without reselling Anthropic's services they're competitive. Which reading did you intend?

And, gotta say, the idea that the Chinese are better at selling US models than the Americans is hilarious. There might be an economic study here somewhere about just how anti-consumer and anti-progress their IP laws turned out to be. We've got an entire postindustrial revolution centred around who can ignore the most stupid laws.

> the idea that the Chinese are better at selling US models than the Americans is hilarious

This is not the right deduction.

China blocks foreign AI from operating there.

I think you will find that it's the USA government imposing such restrictions.

That is ALSO happening, but that's beside the point.

Chinese AI apps like DeepSeek are freely available for ordinary Americans to download and use. There's no federal law banning private citizens from using them.

So to claim that Chinese companies are better at selling American companies' work than the American companies can do themselves when they are prohibited from operating in that market, is the wrong deduction to make.

there will be soon enough. TikTok is the example for the US clamping down on companies that dont toe the regime line on israel

> China blocks foreign AI from operating there.

Given the current US government's tightening of export control restrictions and the introduction of a bipartisan bill to block use of Chinese AI in federal agencies, I'd say the two countries' positions are not far apart.

https://apnews.com/article/ai-china-united-states-competitio...

Yes neither are free markets

Externally subsidized predatory pricing is the opposite of a free market.

So all those companies selling at a loss to gain market share aren't part of the free market? Like openai, anthropic, and SpaceX?

Externally subsidized predatory pricing is the opposite of a free market — precisely because it sells things at below market rates.

Free markets are where players compete on quality, efficiency, and supply. Prices are a result of cost and supply and provide real information on these factors. Competition for customers selects the most effective and efficient producer.

Sustained efforts of selling at a loss to gain market share is the exact opposite. The entire purpose is to corrupt the free market by sending false price signals which SUPPRESS free market competition and push market share to whoever can burn the most capital (whilst providing an actual service/product), not whoever is most efficient or highest quality or lowest actual price provider.

Uber and AirBnB are better examples of your "selling at a loss to gain market share", where they burned capital to undercut prices for close to a decade on falsely low pricing to destroy incumbents.

Spending on R&D while developing expensive technology is different and arguably very much a part of a free market, and is not what I was talking about.

Spending capital to steal your competitors' technology, and then spending more of it to make it available at below-market rates, is absolutely not a free-market activity.

Just because it is not stopped by someone enforcing a free market, does not make it a free market.

If you can use mountainous capital to sell at a loss in order to distort the market, yes, that's not a "Free Market", as in, the vaguely understood competitive marketplace armchair economists idealize.

True freedom in the market means the freedom to capitulate your wealth to snake oil salesman and schemers who operate on generational timeframes until economic power consolidates and renders your society into de-facto tyranny. Before any sort of regulations existed, we were all trading shiny rocks with ultimate freedom, and that somehow has produced a bunch of economic situations in the modern day that a ton of people don't like.

What's more interesting to me is freedom from the need to have investigative journalists doing deep dives into potentially fraudulent, thieving, or scheming companies behind every purchase, and to know that what I'm granting market success to is exactly what my money or time is going towards - I'm not buying something at a loss that funds some other deliberately obfuscated project that's made opaque from my perspective of the market transaction.

The proverbial "market wisdom" doesn't emerge out of markets with extreme information asymmetry.

Cough.. cough.. Uber.. cough cough AirBNB

> Or does this not apply to huge US corporations any more?

When it comes to favorite companies of the tech communities, it's almost always "Rules for thee, but not for me"

The standard stance is "they can do no wrong and they are absolutely perfect". I mean, look at any thread with anything about Apple in it.

> what economics told me the free market was all about.

Don't complain when US starts to play by the same rules China has been using for decades.

What is the implication here? Are you warning that US corporations might start doing something shady, like scraping the internet at large scale for training data? Or mass-dowloading pirated copies of books, completely ignoring copyright?

I find it hard to imagine a future where US corporations have degraded to such a point.

No, he means that the US will close most of its domestic market to competition just like China has for decades, and the US may start subsidizing and dumping its goods everywhere

> the US may start subsidizing and dumping its goods everywhere

Isn't that exactly what companies like Uber have already been doing? Take VC money, sell goods & services at a huge loss, wait until the competition goes bankrupt.

Exactly, it's funny how most Americans have no self-awareness on this topic.

And beyond VCs, which are like massive subsidies funded by printed dollars to which no other country has access, even in industries like electric vehicles, Chinese total direct subsidies to their EV companies are like $5bn per year, while the the ones provided by the US to their auto manufacturers are in the range of $50bn per year.

I don't think the US are cheaters or are doing something bad. But i do think that this propaganda about China flooding the market through "overcapacity" and subsidies is very dishonest and needs to stop.

The CCP's recent yearly subsidies for China's EV industry ranges from $30 billion - $46 billion per year compared to $10 billion - $20 billion per year for the US. A conservative estimate of total subsidies lands China at about $230 billion while the US was at $70 billion.

Yes. Dumping abroad is the entire model that Silicon Valley has been built on in the last 2 decades. China just copied the model. And even then it's a light version of it.

> the US may start subsidizing and dumping its goods everywhere

The US is a net importer, not exporter. It needs to absorb trade at a deficit to encourage the use of the US dollar as the reserve currency.

We import goods, we settle in surplus dollars. The world runs on those dollars.

If the US starts dumping on various industries (how is it even primed to do this?), then the world reserve currency status comes into question.

Most of the Chinese domestic market is open to foreign competition. The areas that are closed off are those that are politically sensitive: publishing (including social media) and banking.

As for dumping, Chinese goods generally sell at a markup abroad, which is the opposite of dumping. Chinese tokens cost more abroad. Chinese cars cost several times more in Western markets than in China.

"Dumping" is when Chinese companies beat Western ones on the free market. If all claims of Chinese government subsidies on basic products were true, China would've gone bankrupt multiple times already.

You're being beaten by a Chinese company? Why improve your own process when you can just lobby for sanctions and tariffs instead!

Most of the time its just low labour costs and no environmental reg. Its really that simple

That does not explain DeepSeek, nor does it explain the car industry.

The main advantages the Chinese car industry has right now are: they lead in battery R&D, production is highly automated, they iterate quickly, Chinese work culture is extremely competitive and things get done fast, and the Chinese state has policies to promote EV adoption, so there's a huge domestic market.

Note that the last point is different from subsidies to car manufacturers. Cities made it difficult to get license plates for ICE cars. The government encouraged the massive buildout of charging infrastructure. And it used consumer rebates, like California did.

aside from the huge domestic market (or potential in the future), china has built incredibly efficient infrastructure for manufacturing prototyping/production.

but it's also thanks to protectionism, and their strictly controlled (not freely traded) cheap currency.

if china had to play by the same rules as japan or germany it would not be quite as successful. but the west walked into this trap, hoping their win-win proposal would be satisfactory for all. now the west is too dependent on chinese production to enforce equal standing.

of course the US has its own unfair advantages, e.g. the global reserve currency and the massive post-WWII headstart.

From a EU perspective similar could be said about the US market - no strict worker protections, lobbying, and a general "capital first" mindset over the users/people (see GDPR etc).

At least in the case of solar and EVs, it's a case of western countries preferring to protect their existing cashcow industries rather than invest to build the industries of the future.

For a brief second, Germany was in a position to become a solar power global player. But our conservative government was more interested in protecting their local, bad industry. Including destroying forests for coal all projections said we would never actually need.

The US spent decades transferring manufacturing, capital, and know-how to China, while Chinese students trained, and excelled, at elite Western universities. Why are people surprised that China eventually became capable of competing with the US?

https://www.theguardian.com/world/2025/dec/07/hostile-powers... these students?

Hostile spy agencies are now as focused on infiltrating western universities and companies as they are on doing so to governments, according to the former head of Canada’s intelligence service.

David Vigneault warned that a recent “industrial-scale” attempt by China to steal new technologies showed the need for increased vigilance from academics.

“The frontline has moved, from being focused on government information to private sector innovation, research innovation and universities,” he told the Guardian in his first interview since leaving the Canadian Security Intelligence Service (CSIS), which is part of the “Five Eyes” intelligence sharing alliance with the US, UK, Australia and New Zealand.

People like Mr. Vigneault know nothing about how academia works. If they get their way, they'll do massive damage to Canada's academic research ecosystem. Academia is naturally open and international.

These people don't get that academics publish their research in openly available journals. They go to conferences around the world and tell everyone who will listen exactly what they are working on. Unless you're working in a secretive government weapons lab, there's nothing to hide.

In the US, people like Mr. Vigneault instituted a witch hunt against ethnically Chinese researchers, and ended up messing with the lives of all sorts of innocent people, including the director of MIT's mechanical engineering department. They found zero spies. Just a bunch of scientists working normally.

> Chinese goods generally sell at a markup abroad, which is the opposite of dumping

Dumping is selling goods below cost.

Usually because government is subsidizing part of the production. I don’t believe the word “dumping” is used for the similar process when Venture Capital is subsidizing it, but using the same term would make sense.

Price at home vs abroad does not matter.

Price at home vs. abroad is key. The term dumping comes from the idea that a company that sells profitably in its home market dumps excess production abroad at below cost.

This is not what is happening here. Chinese manufacturers are making a large profit off every car they sell in Western markets. As I said above, they're selling these cars at several times the price they charge in China. Unless you believe these cars are being sold at just 30% of cost in China, there's no way Chinese companies are selling below cost in the West.

> Dumping is selling goods below cost.

Chinese cars are not sold below cost in Western markets. So it is not dumping.

> I don’t believe the word “dumping” is used for the similar process when Venture Capital is subsidizing it,

I've been doing so for years. How about you join me today. I already see two other users doing the same, so there'll be at least 4 of us.

It's blatantly dumping, whether the source of the money is directly the government (those in power) or VC (mostly US billionaires (trillionaires?), in other words, those in power) is a trivial implementation detail.

Just a data point, but the US currently imposes a 100% tariff on Chinese vehicles.

The "stolen IP" argument can always be made as an excuse. I'm surprised how well it works with some people.

What’s worse, tariffs or outright banning the competition from your market? China has done both despite globalism being what has lifted it from poverty. Why is everyone suddenly surprised that globalism and free markets are coming to an end? Is this a net good? Mostly no unless you count more redundant supply chains.

> China has done both despite globalism being what has lifted it from poverty.

such oversimplification on steroids is totally misleading.

globalism was never invented or promoted to help any country in poverty, it was designed to extract excessive values from those poor countries in the first place. painting globalism as something noble is naive at best.

globalism was the theme of world trading for the past several decades, it was available to all nations. care to explain why other nations in poverty failed to be lifted by the exact same fancy globalism?

let me help you on this one - China was THE leading technological and economical force of the vast majority part of human civilisation. What happened between 1840 and 2010 (the China in poverty period) was an outlier of the history. Globalism didn't lift China from that poverty, the ability to lead the human civilization which was embedded into the Chinese DNA did that.

Kid, when our Chinese ancestors wrote the Art of War, your ancestors were still swinging on trees. You just missed that big picture.

> such oversimplification on steroids is totally misleading.

Yes, so the kettle is calling out the pot?

> globalism was never invented or promoted to help any country in poverty

It doesn’t matter what it was designed for. What matters is what it does in reality and there is no doubt that globalism helped lift China from Mao’s disastrous policies. That’s not mutually exclusive from China’s past as the Middle Kingdom

To steel man the person you are replying to, what reduced poverty in China was money from globalism + significant domestic reinvestment of that money into poverty reduction. That reinvestment policy was a deliberate choice, and now China has the biggest middle class in the world.

An example of a country which didn’t do that is Nigeria. They got something like $300B in oil revenue over a 30 year period but have actually seen significant increases in poverty, now at 70%.

Who cares if another country didn’t take advantage of globalism? This doesn’t weaken my argument that globalism is what helped China rise again from centuries of mismanagement and neglect

> Who cares if another country didn’t take advantage of globalism?

selling your western centric view in 2026 is just laughable.

Why make a pointless comment when you no longer have anything substantial or interesting to write, or is that an "eastern centric view"?

as in, the main trade complaint that trump has with nafta. the Uzs wants to dump subsidized dairy on canadian markets, and canada doesnt want it.

same with US corn on Mexico and other central american countries, creating all those migrant problems in north america.

wooo, americans subsidizing and dumping poor quality goods

The surviving non-American farmers would be confused by the future-speculative tense as America has already been doing this for decades in agriculture, and have been complaining for decades about both the subsidies and dumping of American corn.

Sure, but not at China’s scale and no where close to number of industries where China does it. Why? The US was a net importer in order to support the dollar being the global reserve.

You know, normally when I read these Reddit comments saying "you made me snort on the bus", I always took them as exaggeration.

Turns out I was wrong, I just hadn't read something funny enough yet.

> the US may start subsidizing and dumping its goods everywhere

This deserves to win HN comment of the year 2026.

The majority of the NASDAQ market cap is a direct result of the US subsidizing and dumping its goods on the rest of the world en masse.

Whole Silicon Valley is based on selling products under price, for years, killing the competition or making it impossible and extracting once monopoly position is stable enough. It is the same play book again and again and again and again. It runs unprofitable companies for absurd lengths of time.

Or building backdoor in to the physical servers sold around the world?

How do you think the major AI companies trained there model? Pirated books and anything that could be torrented and scraped of the web.

they were being sarcastic

Don’t know about that…

America industries used to play by the same rules. Look up Samuel Slater.

A credit system that determine your upward mobility?

It never did.

In debt the first 5000 years Geaeber makes the case that pure “free market” trade has never really existed in “the west”. The closest to this ideal that’s ever happened was during the Islamic golden age enabled by religious prescriptions against usury.

Graeber was a confabulator with a very loose grasp of the facts, though.

>The closest to this ideal that’s ever happened was during the Islamic golden age enabled by religious prescriptions against usury.

How does are bans against consensual financial exchanges close to the "ideal" of the free market? It just sounds like you have an axe to grind about the financial system rather than describing free markets.

Usury and debt based economy creates a dynamic where being competitive in production is secondary to financialistion.

In short, instead of market being driven by demand and productivity, it is driven by financier curving out monopolies.

Peak Examples are Uber and AirBnB.

What makes this view more correct than say, "economies with marketing creates a dynamic where being competitive in production is secondary to marketing" and concluding that nothings a free market until we ban all advertising? After all, you can make a vaguely plausible argument about how marketing isn't really about the merits of the product, and therefore allowing it is antithetical to the free market or whatever

> What makes this view more correct than say, "economies with marketing creates a dynamic where being competitive in production is secondary to marketing" and concluding that nothings a free market until we ban all advertising? After all, you can make a vaguely plausible argument about how marketing isn't really about the merits of the product, and therefore allowing it is antithetical to the free market or whatever

Wait, so your pitch in favor of a debt-fueled market economy is that advertising is awesome and that we wouldn't want to "lose" being smothered in ads all the time?

Cause... sign me up for the non-financialized, non-mass-media-advertising-driven economy please and thank you. I'd even be ok with just nuking billboards and mass-media forms of ads and still allowing more direct forms of marketing, if we must compromise! Likely we could find some compromises around just how much of the debt world we regulate too (this should be obvious?).

(I thought the disconnect between the efficiency of competition and the market as realized in modern economies was pretty well understood and taken for granted, but I guess we all find ways to justify the system we're profiting from... even if that means we have to claim we love the ad breaks)

>Wait, so your pitch in favor of a debt-fueled market economy is that advertising is awesome and that we wouldn't want to "lose" being smothered in ads all the time?

The point is that if add random caveats to what counts as free market, it won't be "free market", only "market I like".

Marketing isn’t free for starters.

Second, marketing can take you only so far compared to the subsidies possible with financialisation.

The West is in a state of psychosis with Debt and Monopolies under the illusion of free market.

The Chinese markets are more free than West, you can just look at the Auto and AI industry.

I'm flabbergasted that you look at the Chinese property crisis and say "only the West does irresponsible loans." No, 60% of China's economy is state-run companies and the remaining 40% need political officers. China is just as capable of making shortsighted decisions as the US, and they have already made several devastating ones.

>I'm flabbergasted that you look at the Chinese property crisis and say "only the West does irresponsible loans." No, 60% of China's economy is state-run companies and the remaining 40% need political officers. China is just as capable of making shortsighted decisions as the US, and they have already made several devastating ones.

While these are hardly shy claims, I don't see anything in them to say "only the West does irresponsible loans"?

> The West is in a state of psychosis with Debt and Monopolies under the illusion of free market.

> The Chinese markets are more free than West, you can just look at the Auto and AI industry.

or the prior post

>Usury and debt based economy creates a dynamic where being competitive in production is secondary to financialistion.

> In short, instead of market being driven by demand and productivity, it is driven by financier curving out monopolies.

> Peak Examples are Uber and AirBnB.

You can throw a rock these days and find a category where the products coming out of China are miles ahead of those coming out of the rest of the world, from a bunch of companies nobody had heard of a few years earlier. And the list is growing pretty steadily.

I would assume plenty of shortsighted decisions are also being made. But I would have a hard time characterizing the state of competition in the west as healthier or more productive when looking at the number of players and the quality of goods being produced in China.

state-run corporation are bad but corporate-run state is good?

You seem to only affirm the GPs psychosis commentary.

https://en.wikipedia.org/wiki/List_of_automobile_manufacture...

vs

https://en.wikipedia.org/wiki/List_of_automobile_manufacture...

Financier want monopoly so use usury for Consolidation. Monopoly bad because no free market. Free market good. consumer happy. citizen free.

...except Uber STILL faces competition, and I went back to hotels after finding AirBnB too pricy.

It is good and proper that people aim to create monopolies, as long as they want to do that in a productive and legal way! Monopolies are inherently dangerous, but the truth is that acquiring and maintaining one is not straightforward unless you can get the government to ban your competitors.

Even if these companies monopoly falters after IPO the disruption and distraction to a focus on producing can be a problem.

Expand. I am typically against hard money gold bug libertarian arguments but your description seems interesting and I am open to being persuaded.

No access to capital can and does constrain supply to a very high degree.

Capital will not be hoarded and stuffed in pillows without Usury. People are happy to take bets for profit and loses, I mean, that is like the entire stock market schtick.

I don’t exactly see how the modern stock market is superior based on the (moral not economic) criteria being discussed in this thread?

It’s even more speculative and detached from productive behaviors.

Debt creates debt crises. Throughout history it’s been a major function of any government to resolve these. Notably this function predates any concept of a market in the modern sense. For the most part markets were created by fiat by the government for its own purpose (usually supporting its armies) rather than springing from the ground organically only to later be regulated.

I’m not advocating for Islamic finance, it’s just a funny artifact of history that the closest thing to a “free market” unfettered by government interest, did not happen in the “western” world most of its advocates come from.

>religious prescriptions against usury.

Without interest why would anyone loan money? Even the Islamic banking alternatives all just hide the interest charges.

Shares and Goodwill. You loan money for good well or share of an enterprise which comes with benefits and risks.

So equity instead of debt.

Usury is so delicious to many that it’s unfathomable to consider any other incentive comparing to it

What is unfathomable is how you have a functioning economy without easy access to loans at reasonable interest rates.

The same way Stock Market works. Really, Debt benefits a tiny fraction of people involved in the market.

Isn't it just the same thing? You loan the company money and in return they give you a note that says you get a portion of the company and dividends?

Different mechanics, but stripping everything away, roughly the same.

No, because if the company loses money you lose too.

With Usury/Debt you pay for lending money and you pay whatever the enterprise makes money or not.

Debt is generally cheaper because lenders face lower risk. Because debtors hold priority claims on assets during liquidation and receive guaranteed fixed payments, they demand lower returns. In contrast, equity investors require higher returns for taking on higher risks.

Companies also often prefer debt because it doesn't dilute shareholders which issuing new shares would do.

Very strong assertions and true, to the extent that we accept Usury as acceptable.

While we are here, please also consider that Protection Rackets also provides similar benefits!

It is funny that usury is so evil in Islam at the same time Islam very clearly allows men to own and rape female slaves, "those whom your right hands possess" (ma malakat aymanukum).

Those slaves being raped must be so comforted by knowing that Islam forbids cash loans at reasonable interest rates.

Whataboutism

Maybe, but it is a very inconsistent moral code that considers cash loans at 5% interest evil while raping a slave is perfectly acceptable.

What the heck this has to do with Islam?

Is Usury some kind of religious values for you?

Yes, it is forbidden by Islamic law so it is very much a religious issue for Muslims.

It is also forbidden for Jews and Christians. You sound like you have a personal issue with this topic.

Try reading Graeber/Wengrow

a stranger is asking you to risk $100k on his half-baked plan in exchange for nothing, and you say "sure go ahead take my money!"? no. it doesn't work like that in the islamic world.

as a borrower who's not allowed to compensate for your lenders' risk monetarily, your access to loans is severely restricted. Essentially you have to rely on your extended family. and instead of paying for the risk with interest payments, you have to pay with loyalty and subservience.

it restricts social mobility far more than the western model. it incentivizes clan structures. which incentivize cousin marriage.

power concentrates in the patriarchs of a million little family kingdoms. which causes all kinds of economic inefficiencies.

in the US, even if you're born without any family connections, as a healthy 20 year old you can find a job (hard work) that allows you to save $70k per year and invest it. when you're 30 you have $1M and a good credit history, you can easily leverage that to get a $2M loan at low interest rates, which allows you to start any kind of productive venture you want.

and you can do all this without owing your clan's patriarch access to e.g. your most profitable clients, or your daughters hand in marriage to his retarded son, or anything else he wants in exchange for his generosity.

“a stranger is asking you to risk $100k on his half-baked plan” is more less what YC is. And no debt involved.

You can correct yourself from there.

And in exchange YC demands a large percentage of ownership of the company. Completely different than a loan for 5% interest.

What are you basing this on? The current $.5M up front for 7% ownership deal?

https://www.ycombinator.com/deal/

If you don't understand the difference between a loan for 5% interest and 7 freaking percent of your entire company then you really don't understand finance at all.

The only person confused here is you. It is best you don’t take these topics personally and try to understand it from an objective point of view rather personal dogma.

Who is taking what personally?

Loaning money as per Islamic Law is a charitable act, not one of exploitation.

reasonable interest rates aren't exploitation. Business Loans serve a critical role in economic activity by putting free cash to more productive use.

All interest is usury in Islamic Law (and the laws before it such as Christianity and Judaism). There are ways to to put free cash into productive use without exploitation.

I understand and I disagree. Interest isn't always "exploitation". A 5% loan isn't exploitation and it is very stupid to ban such things.

I think it's easy to look around us to see why it makes complete sense to prohibit it.

If going by the very poor economic performance of Muslim countries I would say interest is a very good thing if limited to reasonable interest rates and fair bankruptcy laws.

Correlation vs causation (post WWI colonization comes to mind, that continues to this day). Historically, there was a period of time when there were no poor people left to take Zakat, everyone paid their share, and no usurious transactions permitted.

Historically, there was a period of time when there were no poor people left to take Zakat, everyone paid their share, and no usurious transactions permitted.

When was this?

During the time of Umar bin Abdul-Aziz.

This is worth treating carefully. There are sources like Ibn Kathir and al-Tabari writing centuries later which claimed that Zakat collectors would return with unspent funds because eligible recipients could not be found. Even if we take this at face value, that's a leap from there being no poor people left. Did it apply to the entire empire or only a few regions? How likely was the collector to actually find recipients if they existed in a given region? etc...

Point is to refute the claim the current situation in some Muslim countries is caused by Islam, instead of it being a direct consequence of colonialism.

Nice to get a callback to previously acquired knowledge with what I assume is an arabizi (sp?) handle.

Islamic trade is certainly one of the best models out there but I think in many cases in practice it is still applied subversively.

It is not enough to ban mechanisms like usury, designed and intended to exploit.

One has to go after the very subversion of legitimate practices for illegitimate goals.

That's not true. Islamic finance forbids indefinitely growing interest. Sharia finance agreements involve fixed fees or equity shares. Late penalties can be collected but must be donated, not profit. In all cases, the borrower never owes to the lender for the lender to keep more an a fixed amount determined at the strat.

You can read Adam Smith if you're looking for definitions, there's no need to read charlatans.

If I wanted moral philosophy I’d read a better moral philosopher

Usury (i.e. taking interest) sounds like free market to me. If you don't like my interest rates, borrow somewhere else.

AI was always going to be a race to the bottom and low margins. It’s why I’m extremely bearish on AI as an investment. It’s framed as some high margin business when it’s really going to end up like your toilet paper at Costco. You will use whatever is cheapest and gets the job done.

I used to think this.. but I think my opinion is changing. The reason is that the leaders likely will be able to accelerate faster.

So what you see is the market "stretching".. the bottom getting cheaper and the top end running away and getting more expensive. At some point the top end may be too valuable to even sell access to.

Most white-collar/knowledge-service-industry work is a weird type of work.

It's fundamentally about enabling things and largely middleman-type stuff. I have a hard time imaging what "At some point the top end may be too valuable to even sell access to." would even look like? What are you doing with that AI power, and who is paying for the output and why?

Elon probably isn't gonna spend that much on a model that can generate him ever-better fake porn but does nothing that he can use to sell stuff to other people. Especially in a world where open models are "good enough" for many things like "tell me how to fix the plants in my garden that are dying" and the like. What remains in the narrow knowledge-work space of: can't be done by an individual or small group themselves, but is valuable enough that it would make sense for people to hoard access to these extreme frontier models? Try to recreate Hollywood-as-a-monopoly by becoming the single content producer for everyone's individualized feed and so owning all the advertising budget in the world? Seems hard, we've already seen how easy it is for cheap-and-crappy-but-addictive-or-funny content to disrupt traditional media.

(There's also pure scientific research, but historically that's not very directly connected to "massive profit" and has a habit of leaking out and getting productized most effectively by other people or just being really easy to copy once someone shows how it's done.)

Robotics could be a different story, as physical labor can be more inherently productive, but "reasoning" advantages are unlikely to be a big long-term differentiator there. At some point the brick laying robot is satisfactorily building the structure, and you're good.

Glm 5.2 very much argues against that. Opus 4.8 level quality for cheap. That’s sufficient for most tasks, so if/when you do need SOTA models you can spend more for specific tasks but otherwise rely on the cheap but still plenty good models for everything else

For me better models are like 8k TVs, my 4k TV is fine, I really don’t know if I can see or tell the difference from 8k and 4k, and to be honest I’m usually just streaming some 1080p anyway. Sometimes products reach the plateau where humans just don’t need better. I’d certainly never pay for AI, Gemini 3.5 Flash free works just fine when I need AI. I don’t even click higher models for free in the Gemini app. I mainly just care about speed. I’m not a programmer, AI doesn’t make me able to make my job better or make more money and the vast amount of people in the world are like me. These valuations are not based on that reality and the stock market correction is going to be 1930s level I fear.

https://isaiprofitable.com/

The issue is who is going to pay for access?

The model has to be sold for cheaper than the value it adds.

Or your customers will bleed out financially.

EDIT: rethought entire premise.

> The reason is that the leaders likely will be able to accelerate faster

Model improvement is already hitting diminishing returns, and people aren't willing to pay substantially more for a slightly better model. There's no "accelerating away" when the new models don't open up a huge new market. If anything, the companies burning huge amounts of money on marginal improvements will be undercut by companies happy to sell current models at a significantly lower cost.

Correct.

And the value-add experiences that utilise LLMs require immense imagination et al that folks at Anthropic will not be able to conceive of - given that they have made immense sunk investments in existing assets. This clouds ones thinking immensely.

Both OAI and Anthropic have tremendous failure risk and this is of course not reflected in the fake private market valuations.

I see a world where lots of stuff is mass produced in china (tokens) but the acutal goods that deliver the experiences are designed, marketed and sold in the west at much higher prices. of course this a nightmare scenario for anthropic et al.

You seem to not get how pervasive and evil the Chinese State is at making everything thing shit for citizen world wide. This is one of the reasons.

Do you also think Chinese selling counterfeit US postage stamps on eBay for 50% retail price (which is a major problem CBP and USPIS are fighting presently) is the free market at work?

This post is so delusional and dripping with condescension I've read it three times and I still can't figure out if you're trolling or not.

Postage stamps have specific legal protection from duplication. The output of an LLM is not itself eligible for any legal IP protection.

So it's a proxy.

Do you think you can re-stream cable TV or Netflix to your own paying customers at a cheaper price?

If it's streaming an uncopyrightable product, absolutely. This isn't even a gray area.

I'm curious why you think you cannot re-stream a public domain stream.

You're playing word games to justify something which is clearly ethically wrong.

You can't re-stream free over-the-air network TV.

That one company with the datacenter full of TV tuners tried and was sued out of existence.

Why is the ethical line specifically on model distillation for you?

Was it ethical for Anthropic/OpenAI to train their models by gobbling a treasure trove of copyrighted material?

If I understand your argument it's ethically ok to destill huge swathes of copyrighted work into a model without compensation, but then it is ethically wrong to use that model without compensation (well actually reduced pricing)?

I don't get the moral framework that you're applying. Could you elaborate?

Over the air TV also isn’t public domain. It’s licensed to a station for broadcast. The output of an LLM has been deemed ineligible for copyright. Until you square that pickle your circle isn’t circling.

Free over-the-air network TV is (generally) copyrighted.

The output of LLMs cannot be copyrighted. This isn't a semantic game; it's literally the case that Anthropic cannot seek relief for people duplicating the output of an LLM.

With you, but I suppose they could have a case for circumventing access restrictions under the DMCA aka leet hacking.

The relief available to a licensor for violating a license use restriction is cancellation of the license. And they're free to do that, just like Alibaba is free to pay somebody in Hyderabad $20 to make another one.

DMCA can't apply in this case because (this is the "C" in its initialism) it is based on copyright protections, which the output of Claude is not eligible for.

I won’t go too far into the weeds, because I’m not an internet lawyer, and I basically agree with you, but I do believe there are access restriction laws that are not only limited to copyright violation. People have gone to prison for enumerating sequential identifiers in URLs to access records they shouldn’t be able to. I don’t know if Anthropic could actually make a case there, but it seems plausible at least.

An endless list of tangential analogies isn’t really a valid argument..

DMCA has as little to do with this as streaming copyrighted content

> clearly ethically wrong

Ethics are subjective. That’s why we have courts judge based on the law and not ethics

Using a bunch of nonsensical/irrelevant analogies to somehow make a point seems worse than these “word games”? What does streaming copyrighted content have to do with LLM outputs (which are public domain)?

Post offices aren't meant to operate in the free market. More things should be like them.

I guess you missed the fraud part.

Has any tribunal ruled that fraud did happen?

>Fraud

According to which lawyer caste?

Are American laws absolute truth? If not, who cares?

I mean, which lawyer caste do you respect? Is that one is cool with stealing credit cards to buy Claude subscriptions?

> 3. At an Italian airport: Constantly stealing bags, opening them to pick out MacBooks and credit cards, a credit card manufacturer-who sells stolen "black" credit card info to transfer stations— is racking his brains to save you money.

Where is this quote from?

Midway through https://www.chinatalk.media/p/how-to-buy-cheap-claude-tokens... which was the article from the top-level comment.

Stealing credit cards seems not directed related to using legitimately acquired LLM outputs for whatever legitimate purpose you want to use them.

Fraud is just what losers call disruption.

Pulling out the worlds smallest violin for this case. It's just unheard of for AI companies to steal things.

No, I mean that dodgy Chinese firms are cheating their customers:

> Because users’ inputs and model outputs are mediated through a proxy, users cannot verify which model their request was actually routed to. A user selects Opus 4.7, but the proxy can silently route to Sonnet, Haiku, or, in the worst case, GLM or Qwen, and fraudulently relabel the output. In a recent paper from Germany’s CISPA Helmholtz Center for Information Security (which cited my article last year on grey market!), researchers audited 17 API proxies and found widespread model swapping–API proxy access to “Gemini-2.5” achieved only 37.00% on a medical benchmark, a staggering drop from the 83.82% performance of the official API. On the user end, the tell only comes on complex tasks, when the output feels off (often referred to as 降智, or “dumbed-down”), but there is no clean way to prove it. Numerous public records highlight concerns that certain API proxies have noticeably compromised model performance. These proxies are suspected of “diluting” (掺水) services by substituting premium frontier models with inferior tiers.

> Besides model swapping, overconsumption of tokens also makes the price per token cheaper, though at the expense of driving up the total cost. Some of it is structural, as proxies that rotate accounts frequently destroy cache continuity as a side effect, forcing users to burn full-price tokens on context that would otherwise be nearly free. Some of it may be deliberate as the proxy providers try to milk more usage. The line between the two is difficult to draw from the outside.

https://www.chinatalk.media/p/how-to-buy-cheap-claude-tokens...

If you continue studying econ you will learn about the various failure modes of free markets including the free rider problem.

https://en.wikipedia.org/wiki/Free-rider_problem

If you keep studying econ you will learn that these failures are actually the norm, and thus why the only "capitalist" states to really succeed have been the ones where the state was strong enough to reign in the market.

Of course, such a state of affairs is temporary at best -- since the alternative is so lucrative!

Free markets work when paired with property laws that can be enforced if broken. If China could offer a cheaper solution in that framework, it would be as you say.

China aren't offering a cheaper solution. They are subsidizing an existing one (which is already subsidized) in order to gain foothold. The difference is that in the US subsidies come from VC, while OP implies subsidies come from the AI labs that buy the training data (which may as well also be VC backed, so just one extra hop).

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.

However, I don't really mind China "stealing" from Anthropic. For us consumers we are getting the cake and eating it too. I.e we are getting rapid improvement to the tune of over a hundred billion dollars in funding, yet the market remains big enough that there's a chance of it not ending up as a monopoly in 20 years. And venture capital are footing the bill. A part of their investment is practically being redirected to fund Chinese AI development. It lets us live out our lives as happy CAC farmers[1].

So I would argue its not as much of a "cheaper solution" as it is intentionally and maliciously abusing another company's product to extract more value than the billing plans intend (given an average user), and further subsidizing the product by selling this data to competitors. But I don't necessarily think its a bad thing for us end-users. Nor for the market. But it is bad for Anthropic and its investors.

[1]: https://phrack.org/issues/71/17

> 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

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.

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.

To be fair, Anthropic is participating in the misinformation by dishonestly characterizing what Alibaba is doing with the data as "Distillation" rather than the more probable adding a small fraction to the "fine-tuning" and/or benchmarking data sets.

I understand why - the distillation narrative casts Qwen as a poor copy of a superior model, and cultivates ground for political lobbying for bans. That doesn't make it less dishonest, but I suppose profits trump ethics.

Oh yeah. Strategic disruption technique or not its a breath of fresh air.

> 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.

> 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.)

Most everything they teach in economics class is wrong. You would be better off ignoring everything they teach you.

Could you elaborate?

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.

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.

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.

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.

Mostly agreed. You can crack a whole lot of eggs without making an omelette.

Though I suspect China would do even better, if they didn't bother with the subsidies. Just like Japan would have done better without MITI.

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.

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.

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.

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.

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.

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.

You know the rights to those tariff refunds were all bought up by Howard Lutnick’s old company for pennies on the dollar right? It’s just another grift

I'm envious of your ability to believe whatever you want.

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.

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.

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.

30 million dead 60 years ago vs 800 million out of poverty in the last 40...

The fact that you think that past performance dictates future competence is mind blowing. What I described is the hard reality of the Chinese economy right now. Go read about it if you don't believe me.

There are a bunch of forces that drive the Chinese economy, and right now growth is slowing sharply. Their dictatorship and semi-planned economy will ultimately be their undoing.

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.

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.

> 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.

Lots of people have succeeded. Neither Anthropic nor OpenAI has any technical advantage in the field of subscription engineering.

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.

Ubers have become pretty expensive these days.

Well, is Uber a monopoly and collecting monopoly rents?

I use Lyft because my phone is too old to run the Uber app. This says nothing about market share obviously.

Amazon and diapers.

Could you elaborate a bit? I'm not aware Amazon has a monopoly on retail, nor even online-shopping? Could you explain what you mean with the diapers?

A trillion dollar ipo jist occurred for a company whose main line of business is almost entirely subsidized by government contracts

Is buying launch services really a subsidy, or did I misunderstand?

> 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.

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.

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.

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.

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?

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

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.

doesnt VC money subsidise stuff all the time? Isnt that how Uber and AirBNB undercut competition?

The "free market" gave the PRC its current strategic lock on rare-earth minerals. There's definitely no such thing as a free market in a Maoist dictatorship. I personally think the "free market" concept is an unachievable ideal and thought-terminating cliche, but "free market in a Maoist dictatorship" is for sure a contradiction in terms.

>This is great for competition! Chinese vendors offering a cheaper solution = what economics told me the free market was all about.

Ah yes, systematic fraud and protectionist practices, free market through and through.

Nuance please.

They are:

1- breaking terms of conditions of the service

2- getting banned and creating thousands of accounts to break the conditions of the service at scale

3- using VPNs and proxies (possibly residential) to mask their network origin and identity

4- Using potentially fake names to sign up

5- Using different credit cards?

Fraud on so many levels, a lot of the infrastructure and modus operandi is what cybercriminals use, these are attackers man, whether you like the victim or not, and whether you think it's poetic or not, I recommend compartimentalizing and just trying to gauge whether an act is wrong or not in itself.

> This is one reason why Deepseek & GLM are priced so cheaply, they are competing with impossibly low token prices in China. They have to keep prices low, in order for people to use them.

This one does not make sense to me at all.

Deepseek and GLM are openweights, even US inference provider are selling them at much cheaper price. The price is cheap because the model is more efficient.

DeepSeek permanently cut its V4-pro API prices by 75% because they were too expensive. Without the price cut, Deepseek V4-pro tokens would have cost more than resold Opus 4.8 tokens.

Opus 4.8 is a more capable model, so almost nobody was going to pay for V4-pro at the original price.

> Without the price cut, Deepseek V4-pro tokens would have cost more than resold Opus 4.8 tokens.

You mean it's functionally as if American tokens are being price dumped in China and Chinese model providers are being forced to compete with that and innovate? So many delicious layers of irony, lol :-P

China also have trust issue with American companies. Most of State-owned companies will not use those services even if they can directly access them.

And? The US feds wont allow even local Qwen or Deepseek models either. "Evul godless commies" or some such nonsense.

If other providers can match Deepseek's first party prices, that probably means that the economics for running inferencing work out for them.

Urm, no? I man they did cut prices by 75% that part is true - but they reduced a starting price that was below sonnet.

Also it's a open weight model, doing that is impossible long term because the real price will be set by the other model providers, who priced it around 60% of sonnet inference cost. Had to look that up though, so that's today's pricing.

Is there a contradiction here? If resold Opus tokens are sold at a 93% discount, you can be a lot cheaper than Sonnet while also a lot more expensive than resold Opus tokens.

I see, After rereading the comment I was responding to I realized I probably misread/misinterpreted what they wanted to convey.

I think there isn't a contradiction and I was just confused. The price may have been discounted only to get below the price point of opus resellers. I do not have enough information on that to make any clear determination on that topic.

If resold Anthropic tokens undercut even the at-cost open-weight model tokens, because they're reselling subsidized subscription tokens, then you'd have to start selling open-weight model tokens at a loss in order to match them.

It's somewhat difficult to have any sympathy for Anthropic here. They're entirely responsible for selling tokens at below cost, with the age-old bait-and-switch tactic.

If they weren't doing so, then these Chinese resellers wouldn't be viable. Radical idea, but how about they actually charge a viable price, even on subscription plans?

Also, wouldn't that claim only hold in China?

I'm an European and I'm not using those proxys the article describes.

One would think Anthropic could point Mythos at this to solve the reseller problem outright:

- Purchase multiple accounts via resellers

- Send messages that contain a UID

- Capture these in Anthropic's logs

- Shut down account. Use any metadata to identify related accounts

/loop

Maybe Fable is not as capable as thought?

On the one hand they talk it up as world ending and on the other hand they can't manage bot accounts on their own service.

I want to hear how this can be rationalised.

From the article "every layer of control frontier US AI companies have added (geoblocking, phone verification, credit card requirements, and now live biometric KYC checks) has produced a corresponding layer of evasion infrastructure".

No system is foolproof. They'd have to be willing to throw out some % of good customers along with the bots. Amazon can do that because they have a monopoly already. Anthropic can't risk it when they're trying to grab market share.

In this case, being distilled is sort of existential to them. The false positives would just be losing some revenue (depending if profitable, not even losing profit).

One would believe a model scoring this high on SWEBench could maximize F1 score for a precision recall problem easily. What's the missing part?

This, just like blanking out a football stream for a split second to binary search and find IPTV rebroadcasters, is far too good a solution. Suits prefer to make it seem like their job of fighting "misuse" is hard, justify their budget, continued existence of the trust & safety department, face scans, etc.

They could be doing this internally and want to see if they can downright eliminate these loopholes before bringing Fable back.

I don't care how they do it, I just want to use Fable again.

That’s a much better way to investigate this than what some other posters here are suggesting, like blocking datacenters, because then you’re going to break a million developers using Claude Code on devboxes.

This only shuts down the account you have bought in the first, plus a few others if it is shared.

> Use any metadata to identify related accounts

How does that work? I think this is the most important part to have an impact on the „thousand“ bot accounts.

They probably will route you through different accounts. So with a single account you should be able to hit hundreds-thousands of accounts.

Especially if you did this in a sting-like manner and used subtle compound UIDs (read: unique combinations of innocuous words) then banned every account found at a later time.

Rather than go after accounts, you’d go after the hosting facilities. The hosting companies are more likely to be able to identify related accounts so working with them will give more scalable results.

> One would think Anthropic could point Mythos at this to solve the reseller problem outright

You're assuming Anthropic want to stop it.

I think it serves their interests more to be able to release stories like this from time to time, to feed to the US government, in an attempt to get the Chinese competition shut down.

No, it more likely serves their IPO story with growth metrics.

One doesn't ban a large chunk of the user base before IPO, because "Well, if you dig into the numbers and discount the drop from banned accounts..." is less impressive than rocketship growth (even if fraudulently fueled).

Expect more effective measures to be deployed post-IPO.

>They achieve this by reselling capacity from pooled Claude Max 5x accounts, payments fraud, and also reselling the model output to various Chinese labs.

>Here's one token reseller, they're offering Opus 4.8 for a 93% discount below official API rates: https://yunwu.ai/pricing?keyword=claude

But is it cheaper than getting your own account? Otherwise this sounds like the "anthropic/openai are losing gazillions of dollars because they're selling $1k worth of tokens for $100" line that's commonly trotted out by AI bears.

It's very difficult for people to create personal Anthropic accounts from China. Anthropic blocks Chinese bank cards, so people must pay with a foreign bank card, which they likely don't have. And even if they manage to set one up, they have to access it via VPN, which eventually gets the account flagged. They then have to complete identity verification, which most Chinese users are unable to pass.

There's a similar Claude resale market going on in Russia. On Funpay they are selling Claude tokens for roughly 20-30x cheaper than official Anthropic API pricing.

And phone number verification too? So that's 3 hurdles to jump to just get opus.

for verification you can buy phone number for $1 easily.

Doesn't ~every phone number verification service check the telephone provider and only allow from a select whitelist of residential providers?

With esim and virtual credit card services, why would that be a blocker? Who's got a landline these days?

You can easily get lots of esims for $5-10 months in EU / UK or just for free.

I think it is really good to start to use CAMARA GEOLOCATION for it. A fraudstear could be intercepted if is not under the MNO antenna.

Phone verification services exist to give you a real number for the purpose of passing this kind of verification.

They even have APIs for these services. They make money since they can use the same number to verify different things.

> Claude and ChatGPT are both blocked in China

So it's presumably cheaper than attempting to spin up your own method of circumventing the blocks.

You can use it as an API unlike the subscription.

Maybe these resellers are using stolen American credit card numbers? Reselling Claude access seems to be a nice way to launder the money.

Somebody figured out how to make the trial profitable!

I don't really feel bad about anyone here, they were subsidizing to get people hooked, someone turned the subsidies into profit when they got selective pricing mode enabled, it was always going to be arbitrage.

But the winner is the guy in the middle in a jurisdiction that will likely be judgement proof, because everything they capture, both input and out, and if available, thinking tokens -- are gonna be for sale as soon as you cut off their other revenue.

Zero knowledge was a commitment Anthropic took seriously, until it got inconvenient.

So, people reselling their leftover plan crumbs? Probably a bad idea for a lot of reasons, but it's civil, and I wish Anthropics lawyers actually closing Streisand's LLM

I don’t follow your reasoning. It is foreign to me. You talk about winners, but this is clearly fraud.

Fraud?

Anthropic sells some undisclosed and ever-changing number of tokens for $200, the customer uses those tokens. If there's any fraud here, it's that the $200 next month is silently worth fewer tokens than the last.

Won't you think of the poor, POOR AI companies!

Also just plain old fraud: selling Chinese models as Opus. With the capabilities of Chinese models catching up fast, this is getting more and more difficult to detect.

What does this have to do with Alibaba? Are you saying Alibaba is the reseller?

If not it sounds like you are describing a separate phenomenon.

They buy the logs from the bot farmers

Are logs somehow used for the purpose of training their own models or something else?

Distillation from having enough logs

Where are you getting cheap GLM5.2? It is about 1/3 the price of Opus, which is not what I would call cheap.

Depending on the provider, GLM-5.2 is between 4.5-5x cheaper than Opus. You can compare prices/speed/etc. for basically all relevant models on aa https://artificialanalysis.ai/models/glm-5-2/providers

a company can just download GLM 5.2 and start self hosting this model using the chip designed and made by itself. That could lower the cost by 20-30x.

for hobbyist buying a few Mac Studio to host GLM 5.2 at home, the cost might 10x more than just using Opus API.

Hugging Face plus Z.ai API makes sense to me. Due to creators get paid, they can keep building better models, and the local-running community benefits from that over time.

AIhubmix currently is the cheapest rather than openrouter.

This story reads like a William Gibson novel. Wild times.

Thats pretty crazy. This kind of thing jeopardizes Claude Max.

If Anthropic is selling a dollar for less than a dollar, they are running a business that doesn't make sense. That's what jeopardizes Claude Max, not this.

Almost all consumer services have a built-in level of breakage that make them profitable. Mobile providers certainly wouldn't be able to offer unlimited calling if everyone was actually on the phone 24x7.

Sure they would. Do you know how little bandwidth a phone call takes?

A voLTE call is like 40kbps. For every person on earth to be on the phone to another person would be 4 billion calls would be about 160tbps. Which is less than 10% of the Internet's capacity.

Terminating a PSTN call requires a lot of control plane infrastructure beyond just raw bandwidth. Especially mobile where you need to keep track of devices physically in motion. Could a system to support 4 billion simultaneous calls be built, sure. But current PSTN systems are nowhere near sized for it.

When was the last time you place or received a call to/from PSTN?

The over subscribed gym model!

But if it's intended to be used by one person, it seems like breaking the contract by sublicensing it out to dozens of other people. It's like buying a netflix subscription for $15, then sublicensing it on a per-hour basis to dozens of other people.

There's still per-window and weekly limits though, so it's not really like that.

Office 365 is licensed per seat/account, but each account has a 5 device limit. Do you think it's fair game for an enterprising person to sub license each account to 5 people, 1 device each?

I wouldn't do it personally for the same reason I wouldn't share my toothbrush with 5 people.

You can write whatever contract you like, the problem is how to enforce it, and a greater problem is enforcing it around the world.

That kind of mentality never works in business.

Bear in mind that for years people shared Netflix accounts until it was cracked down technically.

Plenty of things are intentionally run at a loss (for years!) to gain market share and quantity of ongoing recurring users, or with expectation of ROI later on. Multiple generations of the Xbox hardware have been sold at a loss with the expectation that customers will purchase 300, 400, 500 dollars worth of games, which are very high margin, over the lifespan they own the system.

I get that. It works as long as nobody calls out the emperor for having no clothes.

It's similar to fractional banking, you gamble that people won't want their deposits all at once and pray for you're big enough for bailouts when they do.

It's still a business whose fundamentals don't make sense, you're just gambling you won't get found out.

> you're just gambling you won't get found out.

It's not so much keeping it secret as counting on no one finding a way to harvest the subsidized value at scale. There's an example of that occurring in game consoles with the Playstation 3. Sony's little-used OtherOS feature allowed Linux to be installed on the PS3 and the Cell processors were quite a good deal for scale compute. So the U.S. Air Force Research Laboratory bought ~1800 PS3s and ganged them together in a datacenter as a supercomputer called Condor.

At >500 TFLOPs it was the 33rd fastest supercomputer in the world. Of course, Sony pushed a firmware update that removed the OtherOS feature entirely.

Note that this itself started as a perverse tax loophole, too. By allowing users to run alternative operating systems, the PS3 qualified for lower or zero import tax rates in various global regions.

Oh they know what they’re doing. They’re playing the long war of attrition game. Subsidize your product to undercut your competition until they go out of business. Tale as old as time.

Another post on fractional banking hahahaha.

I suggest you go learn how money is created in the modern economy.

I mean most of you should stop talking about anything finance related until you learn this stuff properly.

> It works as long as nobody calls out the emperor for having no clothes.

Why would customers knowing that the vendor prices goods/services at a loss cause those strategies to fail? Customers often know. Most know about razors and blades; many/most know Lyft/Uber operated at a loss to gain market share. etc.

In international trade, isn’t this called dumping which gets major political pushback?

We really don’t know what are Anthropic’s margins on inference. Most available data indicates they are quite high on the API so it’s not that obvious that subscriptions are unprofitable.

That is pretty crazy, almost like how Claude and all the other models are jeopardizing other businesses without paying for their training data and wiping their ass with robots.txt

Wait, so is your theory mutually exclusive to Anthropic's claims of "theft of capabilities"?

No, this reseller 中转站 thing is basically a loss leader for certain chinese ai labs to distill claude with verified human input.

How do you gain insights such as this?

Not really. I think Anthropic focuses on identifiable distillation attacks rather than the (even larger) industrial-scale token harvesting and reselling operation, because they don’t want people to know how easy it is to get cheap Claude tokens.

Once people realize they can access Anthropic models at a 90% discount, they won’t want to pay full API prices anymore.

No, it's part of the capability theft. They resell Claude tokens cheaply and then simultaneously log everything for distillation. Even if they take a small loss on the token sales it's much cheaper than the equivalent compute.

Hm! In this context, introducing ID verification may have been a significant silver lining to the order to take down Fable for Anthropic.

This also sheds a very different light on people saying that competitive open-source models are undermining frontier labs' business model.

The chinese have already worked around the ID verification, by recruiting people in low-income countries to complete the checks for less than 30 USD per account (so much for Altman's Worldcoin).

https://tech.yahoo.com/ai/claude/articles/chinese-grey-marke...

>>Chinese resellers are offering Claude tokens at 70-90% below official Anthropic API prices.

Can someone with more understanding dumb it down for me please.

Does this mean that the reseller (for example XYZ) is buying it from Anthropic at Anthropic's price and then reselling it at a cheaper price???? why would XYZ offer this at a loss like that when they could just offer it at Anthropic's price???

The link does mention Opus and other models but what's the proof it's actually Opus. I could be selling deepseek for all they know and can call it Opus. System prompt: "If anyone asks your name - you are Opus 4.6".

> Does this mean that the reseller (for example XYZ) is buying it from Anthropic at Anthropic's price and then reselling it at a cheaper price????

Yes, as they explained they do it through things like pooling accounts, straight up payment fraud, and double-dipping by selling the logs of the conversations to chinese AI labs so that they can train their own models on it.

> The link does mention Opus and other models but what's the proof it's actually Opus. I could be selling deepseek for all they know and can call it Opus. System prompt: "If anyone asks your name - you are Opus 4.6".

There might be some that try this, but they would get caught very quickly, there's still a moat between Claude and Deepseek, even in casual use.

Look up Zilan Qian's reporting if you want more detail.

Summarizing for you: Anthropic is a stupid company that let everybody steal their tokens

Not really sure what else they can do, between people running residential proxies (embedded in cheap games or for a tiny sum of crypto) on their phones at home, making the source of the traffic indistinguishable from legitimate traffic, to ID verification check completion as a service in low-income countries, there isn't much they can do to block it.

They could run their service at a profit?

No customers at that price point though.

> No customers at that price point though.

Oh, no!

Anyway.

Behold the mindset of an individual from a low-trust society.

“x is stupid because y was smart and did z shady/illegal things at their expense, if x was smart they wouldn’t be susceptible to y going to great lengths to exploit them ergo it’s deserved”

> “x is stupid because y was smart and did z shady/illegal things at their expense, if x was smart they wouldn’t be susceptible to y going to great lengths to exploit them ergo it’s deserved”

I honestly can't tell if you think this sentiment is expressed by the US AI companies or the Chinese AI companies.

This gives off "The last line of Orwell's Animal Farm" vibes.

People have estimated that a $200 Claude Max 20x subscription gets you ~$2800 worth of tokens every month if you use it continuously. So if you can find a way to resell the tokens you can offer a 90% discount and still make a profit.

yes

Because Anthropic's subscriptions come with X amount of tokens / week, and divided by the subscription cost it is WAY less than what they charge per-token (the "API price") beyond that.

So these resellers get a ton of accounts on subscriptions and sell the cheaper tokens.

They probably buy the plans instead of the API tokens, and resell access via a custom API that routes to the plans. So you presumably get cheaper access this way than paying API pricing.

It makes no sense.

These China e bashing is very annoying. It is hard to argue with people drowned in American propaganda. I'd expect better arguments from the intelligent people in HN

Needless to say, they also collect all the data and sell it to labs which want to distill the models they’re serving.

How are they 'streaming' the responses and 'pooling' the tokens?

Do they have MacBooks in the US that run the queries and stream the outputs back to China?

Why do you need macbooks? Just rent servers from any hosting provider.

Not going to work for very long or at any scale coming from datacenter/hosting provider IPs. Google "residential proxies for sale" for the tip of an iceberg of how they snowshoe the traffic.

I use my Codex and Claude Code subs on like 4-6 different servers, ranging from AWS to Vultr to Linode etc.

That’s a major and legitimate use case for developers, Anthropic can’t just block data center/hosting IPs because their actual customers use them on data center/hosting IPs.

Now consider what will happen if your pattern of queries and context history triggers a pattern that makes it obvious it's some API key being used by multiple different entirely unrelated people on totally different things, or any other pattern of use that makes it obvious it's being used for distillation.

Two parts here.

First, well-calibrated systems for detecting API compromise is a good thing (or good intent at least). Credential malware is exploding.

Second, the challenge is that significant amount of genuine work — such as evals — seems practically impossible to distinguish from generating RLAIF outputs.

As long as you stick to a single unique IP per account it isn't going to get flagged.

Respectfully, no, that's not how it works. You think the people running anti-fraud and anti-bot measures don't have tools that know the specific ipv4 and ipv6 CIDR ranges of every ASN that they categorize as hosting/colo providers?

And that's just as a basic first effort reject measure to prevent automation tools from using things designed for human-interactive use only.

Go try to do many of these things from Cogent IP space and see how long your project lasts.

Every developer at my company uses their Claude Code subscription on an EC2 dev box. Plenty of other tech companies do the same. Heck nowadays people even install Claude Code directly on production servers in data centers and use it as an ops tool. None of this is a problem. Fraud and abuse detection is a lot more sophisticated than just checking an IP range.

None of the LLM providers block professional use thus they must necessarily permit access from commercial IP ranges.

I have no idea how the resellers are doing it but an obvious starting point would be a cheap VPS node that routed each account to a unique semi-permanent IPv4 or IPv6/64. All the provider would see would be a regular account making a normal looking stream of requests from a stable datacenter IP address. Any given request stream would remain consistent (at least over a period of a few hours) because a reseller would take care not to split the session of a single user across multiple different accounts and not to interleave the active sessions of multiple users on a single account.

Detecting this would be extremely difficult because on a longer time frame it's perfectly normal for many distinct accounts to work on the same code base.

And it’s perfectly normal to be running Claude Code on EC2, a VPS, etc. I do it all the time!

You block clouds, you block devboxes and your customers.

Wouldn’t it be funny if the same residential proxies allowing these labs to scrape the Internet is also what’s enabling these resellers?

If we're getting up to the scale of these resellers and also considering chinese state interests then we're well into the range of purchasing a few small ISPs in different countries and "padding" the legitimate subscribers.

I assume they use residential proxies (tunneling in the background of crappy Android games) for the "last" hop.

Sorry for being a newb here but are you saying Anthropic blocks people from running claude code on datacenter ip ranges?

Or is the datacenter IP just one part of the picture?

Nonsense. Many if not all legit Claude users are using Claude Code inside their Cloud servers. How else would you use it anyway? For just local dev? That's so 2000 and late bro.

No, I'm not saying it's the exclusive and only measure (that would indeed be something we might see 20, 25 years ago), it's one of a myriad of discrete datapoints used to determine if an account is authentic or not.

There's a lot of inauthentic coordinated automated systems these days along the general lines of scraping/crawling/social media manipulation/sockpuppetry that require running through residential proxies or proxies to places that don't look like datacenter IP space.

Hey, if the bastards can use residential IPs to suck all information into their models with their crawlers, so can we!

There are lots of botnets providing home IPs.

ask your gpt how does openrouter work, then ask, how do proxies work.

The resellers route requests via one of thousands of Claude Max 5x accounts. When an account reaches its usage limit, they automatically switch to another account.

Why would they use Max 5x instead of Max 20x, which is cheaper relatively speaking?

Don’t trust my experiences as fact since it’s a bit opaque, but I believe 20x only offers 4x the 5hr session limits. The weekly limit is still 2x, which is the same as the price increase.

You're right, they're using the $200 Max plan, which I thought was the 5x plan. It's talked about in the article I linked.

    > Do they have MacBooks in the US that run the queries and stream the outputs back to China?

why would anyone do that? you do realize the laptop farm case was work computers?

the answer to your question is containers/VMs + residential proxies

that explains why theyre blocking me. i have privacy controls up high and they must think im a chinese residential proxy bot

They probably asked claude how to do it.

Im ok with this! Is there a site that list all these resellers, or better, a openrouter-like for these resellers?

They're called 中转站 (transfer stations/proxies). They can be a bit tricky to find on your own, so I'd suggest asking your preferred AI to search in Mandarin for you. I linked a larger operator in the parent comment. You can also find many on Funpay, which may be easier to use.

This is one seller I found, they're reselling "real Max 20x subscription accounts", at ~97% below official API prices https://funpay.com/en/lots/offer?id=70812310

Note that whoever you buy from will be able to read all your tokens, so don’t use it for anything confidential/financial.

> They can be a bit tricky to find on your own, so I'd suggest asking your preferred AI to search in Mandarin for you.

Random, but are the frontier AI providers like ChatGPT better at searching the Chinese internet now?

When I was in China a few months ago and asking AI for restaurant recommendations, all the US frontier providers were pretty useless, or plain out hallucinating, even if I specifically ask them to search Dianping (Yelp for China).

I'm not sure. I use Grok for most of my esoteric searches and it does quite well. I explicitly prompt it to search in the language most relevant to that query, and found it does quite well. I also tell it to respond back in English. Often, there is not enough information available in English about nice regional topics.

I know ChatGPT had an issue where it only tried to search in English (unless prompted) and the answers were not great.

How did you even find these? Even in discussions about cheap AI I've never seen anyone mention this. Great find!

I learned about this from a friend who lives in China.

I'm surprised these token resale services aren't talked about more often, they are common knowledge in China, and the discount to API pricing (90%) is genuinely cheap.

> Note that whoever you buy from will be able to read all your tokens, so don’t use it for anything confidential/financial.

Note that without an enterprise agreement, both OpenAI and Anthropic make no commitments as to what they will and won't do with your data either.

Identity verification won't work. Nothing will. They are paying (and will continue to pay) US citizens sitting at home to copy-paste / type prompts out if they have to. But eventually they won't have to.

Once there are enough spam PRs on github / uploads of claude conversations, enough mythos output used in production etc.; it'll just be the same albeit delayed. Doesn't matter either way.

I feel for Anthropic's team and I understand where they're coming from, but once you reason it out, you'll come to the conclusion that this war is an exercise in futility.

Unlike prior systems - like Google's algorithm; these models aren't entities that use math in the process of doing X or Y (information retrieval from such and such infrastructure) -- they are the math. More precisely they're mathematical functions. Very very complex functions. Almost certainly impossible to write out without filling up a library functions. But they're mathematical functions nonetheless.

So when your text is processed, then Mythos / Opus etc at their core compute the result of the Mythos / Opus function,

   f(text) -> (text_transform)

where f is a continuous function, https://www.turing.ac.uk/sites/default/files/2025-11/languag...

According to the Stone-Weirstrass theorem (edit, it's Stone-Weierstrass with an e.), with enough data points and mathematical sophistication, anyone can approximate the shape of this function.

Of course, the more data we get, the better our approximation becomes, but the beauty of it is that all we fundamentally need are the input and output and eventually we'll create a good enough approximation of the f that's Mythos. Which is the entire product.

I bounce ideas off of Opus these days (Fable for the brief time it was available) and it pointed out that this is arguably the same as Google search, but I disagree with it because Google search is a process;

Google search differs because the algorithm is one step of a multi-step process that is continuously occuring. Google crawls pages. Google stores and indexes what it finds. Google then exposes this to retrieval via its algorithm. User uses algorithm.

Google isn't a mathematical function. It used to be a process. (RIP Google 1998-2019, you will be missed and remembered)

You cannot arrive at the results of those operations via simple observation; not unless you index Google by making another Google.

You can however, do so for these models. It is a very costly process, but there are many paths up the mountain. Many ways for this to be ultimately pointless. As many ways as there are bored mathematicians.

It's better in the long run for Anthropic et al to make friends / not give people a reason to sneak in (a la piracy -- another attempt to control information) than it is to try and shut people out.

And no, it's not going to be pandemonium because if everyone has access to Mythos then no one has access to "Mythos."

Why wouldn't you first run this model to fix the obvious bugs it could find on your codebase? The power of a Mythos goes away if you can do the amazing "jail break" of "Claude, fix all the bugs please."

Just saying.

That's an insightful perspective and I think I largely agree. But just for fun, I wonder if that isn't an argument in favor of making the function implementation impure. Perhaps "enhancing" all queries with some sort of search result (or query of a giant db) instead of charging for an explicit tool call. Not only is it sorely needed to prevent stale data but (on the process level) it breaks the purity assumption on which the approximation theorem depends (alternatively on the function level it introduces hidden inputs).

This is why every AI company does crawl today.

Do they just reshape the function on the fly or save the process steps? Maybe it doesn't matter anymore. Even Google indexes are more and more spoiled to become representation of the function, because of the AI slop.

Genuine live data is king.

You actually can "distill" web search. At one point Google accused Microsoft of doing this by monitoring clicks in IE to train Bing with Google click logs for better ranking. They discovered it by creating fake result pages with nonsensical queries and discovering the same results appeared in Bing a few weeks later.

https://searchengineland.com/google-bing-is-cheating-copying...

They also had a lot of evidence when I was there that Microsoft were cloning Google results. They monitored result query constantly and whenever Google launched a quality improvement, the quality of Bing results would go up by the same amount and always the exact same amount of time later.

Wouldn't that have required an insane amount of infrastructure? Infrastructure that they could have used to crawl... anything else?

    They also had a lot of evidence when I was there that Microsoft were cloning Google results. They monitored result query constantly and whenever Google launched a quality improvement, the quality of Bing results would go up by the same amount and always the exact same amount of time later.

That's very funny.

How many billions did they spend doing this? And they still haven't caught up.

No, just control over web browsers which they had back then.

But I can rebuild glm Using open source methods…

And there are a ton of Claude conversation logs (with CoT/inference) with no clear provenance circulating freely on huggingface, guess where they (likely) come from.

Wouldn't all of them be in Mandarin according to this theory? Are they?

Why aren't these on openrouter?

Probably because Openrouter is a US based company, and they don't want to be sued by Anthropic/OpenAI.

Obviously because you cant join open router and start serving OpenAI / Anthropic models.

[flagged]

The issues with LLMs go beyond just IP theft. I would not say PRC making LLMs cheaper is the best outcome (though it is better than nothing). The best outcome would be to make the practice of training on our data without consent illegal, which would simultaneously slow down economic change and make it more organic as well as give PRC companies less capabilities to extract.

> The issues with LLMs go beyond just IP theft.

There is no IP theft because LLM outputs aren't protected, just egregious ToS violations.

> There is no IP theft because LLM outputs aren't protected, just egregious ToS violations

I meant original IP theft that occurs to train LLMs in the first place. But sure that implies that further LLMs based on that LLM are also tainted by that original IP theft.

- Deriving a “no derivatives” licensed item is illegal, no?

- Selling a “no commercial” licensed item is illegal, no?

- Deriving and/or reproducing MIT licensed code without credit is illegal, no?

- Reproducing and/or deriving GPL code and not notifying and/or not making GPL is illegal, no?

I can't make heads or tails of your opinion-free comment, made up of only questions.

My best guess is you're suggesting that Anthropic's model outputs are transitively under copyright (as a reproductions of human work under copyright?), but somehow ownership now belongs to Anthropic and not the original owners, and therefore Anthropic has standing against Alibaba? Not only does this go against what Anthropic argued in court against authors and publishers, such jurisprudence would lead to the immediate shutdown all leading LLMs in the US which were all trained on stolen work.

> immediate shutdown all leading LLMs in the US

They can license training data. They have trillions, look what they are dumping into it, you seriously think they can't afford to license data.

Obviously it would be easier if they do it from the start, but that was their trick, to do it while people don't notice and get big ASAP. Should they get away with it?

Also, it would solve their Chinese problem, because it would make them violate copyright too. Right now it's more like rules for thee not for me so it's hard to take seriously.

i still want those data sets to become public domain. open weights still isnt good enough

That's the conundrum isn't it? Anyone that posts their datasets would be immediately sued/blocked/boycotted to oblivion due to the obvious and blatant data theft, not to mention IP and copyright issues.

Nvidia's even being sued for providing scripts which automate the downloading of said data from non-Nvidia sources. We certainly don't need copyrights that last nearly a century after the author's death (they literally cannot help the author), so here's hoping that some of the disputes over all this money changing hands can reign in some of the existing copyright sprawl. A stronger public domain would provide more useful training data for everyone, including open source models, and make criminals out of fewer AI researchers.

I hope you say the same when these cheap llms are used in drones to target humans. The world models are exactly built with that direction in mind.

Cool beans boomer alarmist stance. The Chinese models here are doing what they’re supposed to price the market accordingly.

Why was this flagged

no honor among thieves.

> which is also why Anthropic introduced identity verification, to slow down the onslaught of bots.

Lol. The irony is thick for anyone who ever had to attempt defense against an onslaught of American AI lab crawlers that ignore robots.txt

Yeah nobody is gonna be shedding any tears for them

I’m surprised that instead of cutting them off Anthropic doesn’t just switch them to a lower quality, cheaper to models.

That would seem more effective than simply shutting down the accounts.

Keep them paying for junk.

That sounds like it would actually be fraud.

Not if you simply say in the terms of service that it's allowed. Then suddenly it's normal (every company does this). Similarly to how the terms of service can simply say you're not allowed to sue.

> how the terms of service can simply say you're not allowed to sue.

That doesn’t necessarily mean much. You can put plenty of outrageous statements into any contract that automatically doesn’t make them binding.

It's maybe how it works in the US, but that sure as hell not how it works in the EU (my snark wants to continue as "or any sane legislature")

Anthropic is based in the US. Unfortunately, too late to edit my comment to say "US company"

That's an interesting point but I'd ask who would Anthropic be defrauding?

The Chinese resellers that are happily operating outside of the terms of service?

Or the reseller's customers, that are knowingly buying a potentially fake service?

Or Alibaba, also using resellers to break terms of service with the aim of attacking Anthropic's business?

INAL but I think Anthropic would be able to argue an "unclean hands defence" to prove they are not defrauding anyone:

https://en.wikipedia.org/wiki/Clean_hands_doctrine

In short, you can't knowingly break a contract and then complain that someone else is not treating you fairly with regard to that same contract.

Thank you for your very informative comment!

(It's a shame almost all replies are just the same contrived pessisism found on every Anthropic thread on HN).

Indeed! It’s so hard to find reasonable takes on AI that aren’t littered with accounts created 11 days ago that only post in threads related to Anthropic for some reason

the bots are strong in the ai space lmao

> They achieve this by reselling capacity from pooled Claude Max accounts, payments fraud, and also reselling the model output & reasoning chains to various Chinese labs.

Claude never provides the raw reasoning chain. What you see is just a summary of that reasoning. Getting the full thinking output requires an enterprise agreement.

https://patrickmccanna.net/the-text-in-claude-codes-extended...

how hard is it to find a manager or ops team member at one of the enterprise companies and buy lets say 100gb of logs? the chinese lab can promise to anonymize the data before training, not release it raw and pay a good price.

honestly you might just need to get data from a couple long sessions and feed it back to another model as an example to make synthetic reasoning chains. if the emulator model is good enough it should work.

I would expect that to be very hard

don't buy your drugs from shady operators children! always get it from the source

Those resellers are simply just selling Kimi K2.5 or GLM5.1 as counterfeit Opus. We, Chinese, know how to play the counterfeit game for a long time in so many industry.

That's not true, some of them are indeed fake, but a lot of them are actually providing real opus at low cost doing what op said.

Genuinely, can you provide a better source here than "trust me bro"?

I read quite a few posts about this on RedNote.

I just tested the provider that the OP mentioned extensively yesterday, and the models they're selling are definitely not from Anthropic. The voice "sounds" like Sonnet or Opus at first glance, but the intelligence is definitely not there.

Great point, and this is on the vendor (Anthropic) to address. Typical fraud issue.

OP is about modeling distilling the capabilities.

> Chinese resellers are offering Claude tokens at 70-90% below official Anthropic API prices

How dare they. Only Anthropic is allowed to sell its tokens at 70-90% below the API prices.

> These resellers operate tens of thousands of bot accounts, which is also why Anthropic introduced identity verification, to slow down the onslaught of bots.

Don’t put that on Chinese.

> This is one reason why DeepSeek & GLM are priced so cheaply, they are competing with impossibly low token prices in China. They have to keep prices low, in order for people to use them.

Sounds a bit circular? Aren't the companies working on these models than also the ones that are paying the subsidy (via paying for training data)?

It's fucking laughable to see people complain about what they did and still do. Using illicitly extracted data? That's all main LLM playbook. Onslaught of bots? Ask where the bots almost DOSing most internet sites for the last couple years come from.

As some people would say: Cheh

Amazing thank you chinese resellers. This is a perfect way to undermine The Great Satan's Genocide Machine's chosen model comapnies.

Interesting article - your discussion from the time:

https://news.ycombinator.com/item?id=48165492

This may be the truth behind the alleged distillation incident.

> payments fraud

One of these things is not like the others... If Anthropic could show that Chinese commercial competitors were using payments fraud to do this, they would be shouting it from the rooftops.

I have 0 sympathy for Anthropic. Their latest models are extremely censored. The Fable rollout was horrible. Their Cyber Access program criteria denies doxxed Americans doing legitimate security work. Anthropic is hostile to their users and hostile to their own country. OpenAI is considerably better on all of these fronts, but still not perfect.

I'm happy to use and support Chinese model developers if it means less censorship and gatekeeping. I have absolutely no dog in this fight, and neither do most American developers. We will use whatever is cheaper and better. Game on.

Chinese models are the exact opposite of what you claim to want, they are all highly censored, even more so than Anthropic models, with government mandated censorship.

Your take does not reflect the reality on the ground. The Chinese models are censored on a narrow range of political topics which have nothing to do with my work. The weights are open and they can be uncensored/abliterated with little effort.

Open-weight models can be abliterated automatically with open source tools though and completely decensored. You can't do that with a closed cloud model.

I think companies should do this too, in a smaller scale. Proxy all LLM traffic to and from your employees, and use it to fine tune a smaller local model.

Considering how Claude and GPT were trained selling this as training data is completely justified.

Good for them!

Even if what you say is the truth (I don't think that is what's actually happening) it sounds to me like fair play capitalism working as intended! I guess when you rip off the entire Internet and then turn around and complain about getting ripped off nobody cares or feels for you. If there's a master class in getting the entire world to hate you then both Sam and Dario will be the prime examples.

I didn't connect the reseller pricing to DS and GLM prices until you explained it. Very good observation. Deepseek v4 pro in particular is priced so low that it's hard to imagine that they have any margin. 0.76/1.52 for a 1.6T param model leaves very little margin. Even the domestic providers on Openrouter are multiples of the price https://openrouter.ai/deepseek/deepseek-v4-pro

they even resell GPT codex usage at 1~5% API costs. OpenAI has 1-month free trial promo in some regions, and they harvest free accounts in a large scale. I have a wechat contact that offers 98% off for GPT 5.5 and he's still profitable

> Chinese resellers are offering Claude tokens at 70-90% below official Anthropic API prices

That is not what they are claiming, not in this article at least. It's the distillation they are complaining about.

Thanks. This is a widely misunderstood part of the market that the frontier companies are either unaware of, or don't see as a threat. Consumers are flocking to this, its better than dealing with their limits, changes, and opaque pricing. Funny enough, frontier companies are literally training their users to seek alternatives, local models, and distilled models to meet their throughput needs.

It’s not that they don’t understand that it’s a problem, it’s just that the easy way to address it is with reduced, flat-rate pricing… but they are already losing gobs of cash on their regular users. Their business model, as it stands, is not sustainable. That’s not saying they won’t find a stable one, but the one they have now is definitely not. The external cash is drying up, and they need to figure out a way to shed the low-revenue users, and charge the remaining users a lot more or they’re going to go under. They would probably do a goddamned backflip if every flat rate user that wasn’t willing to switch to API pricing went local, or even better, went with a competitor.

"How dare someone rip off the stuff that we've stolen!".

Why cant anthropic just sign up to those resellers, rack up some usage and then just start banning tf out of them? Reverse uno

I feel obliged to point out the disingenuousness of what this post says and the post it quotes. The most egregious parts are payment fraud and reselling - these are speculated but not actually said to be known to be happening, which you have left out.

1. Claims of payment fraud. I actually clicked the BBC article linked about payments fraud it referred to. It was an article about a criminal syndicate stealing credit cards. It mentions buying cryptocurrencies, AI API purchases are not mentioned.

2. The claims that they are reselling the chats to AI labs. The post you cite is speculating it could be, but this is unverified.

The claims of reselling is also bizzare. Arbitrary user prompts are low quality data. If I were an AI lab, wouldn't I just pay for the API proxy and get targeted output for far less?

Also calling it bot accounts is a stretch. Bots mimick human input. These are proxy accounts.

There's sources linked in the article

https://x.com/yan5xu/status/2029743983522631698

https://x.com/xkajon/status/2050445443889525235

Capitalism at its finest.

Tysm for sharing the link

This will get you some free tokens in that site: https://yunwu.ai/register?aff=eyPD