> The question is also what game they're playing. Deepseek came out of a hedge fund. I think it's no coincidence that their publications tend to have a large impact on AI stock prices.

Its revealing that they always seem to publish after some big announcement by American AI companies. But regardless, this is one of the benefits of a duopoly.

No more revealing than OpenAI, Anthropic and Google always having some new model that just so happens to be waiting in the wings whenever their competitors announce their own model bump.

That's because OpenAI, Anthropic and Google work on many models in parallel which work cooperatively from the user's POV. So GPT-5.6 is just a checkpoint of their multi-model development.

I think you are reading a lot into this.

There's always an announcement by one of the frontier labs.

The framing that Chinese labs open-source because they're behind assumes it's purely a competitive tactic. But there's a structural dimension: DeepSeek operates under a completely different funding model than US labs. They're backed by a quantitative hedge fund that views AI as infrastructure, not as a product to monetize directly. The ROI for them comes from trading alpha, not API revenue.

Chinese AI companies also face a domestic market where open-source distribution is often the only way to reach enterprise clients who won't pay SaaS premiums. The business logic aligns with openness in a way that US labs' VC-funded models don't.

> They're backed by a quantitative hedge fund that views AI as infrastructure, not as a product to monetize directly. The ROI for them comes from trading alpha, not API revenue.

That used to be true, but now they've raised ~7B$, so we'll see how / if that changes.

Yeah, they were in a tough position though. All their competitors were offering equity and they didn't.

Also, we’re seeing a classic commoditization spiral with open models rapidly closing the gap and driving prices towards the marginal cost of inference. The reality is that models themselves are general commodities and there's just not enough difference between them. A company can get ahead of others by a few months, but then the rest quickly close the gap. It's a really low margin business because there's no way to differentiate yourself.

Chinese companies understand this and they're treating models as shared infrastructure akin to Linux. The money is going to be in customization niches. Companies will charge to tune models for specific use cases and charge support for that. There's also going to be money at the bottom for hardware vendors making chips and memory. But the middle tier of generic LLMs is seeing involution where there's relentless competition driving profits towards the bottom.

Nope. It is purely a marketing and distribution strategy. Without open sourcing their models, their businesses would have never gotten off the ground. I've written about this here: https://try.works/writing-1#why-chinese-ai-labs-went-open-an...

And OpenAI has the audacity to call themselves a non profit. All leading US models are closed source for one purpose, money.

I always see these malicious speculations without evidence, simply because these companies are from China.

xenophobia can be profitable, it's not hard to follow the financial incentives and explain the rhetoric.