It's actually extremely smart.

Latest and greatest China is able to make is reserved for the use of businesses and entities in the Chinese market.

Everyone else gets access to models of more limited capabilities.

It's basically the US strategy. Obvious difference being only that the Chinese allow on prem hosting of the lesser models. So plus one to them I guess.

If we want to move China or the US on from the whole, "super intelligence models for me, more limited intelligence models for everyone else" strategy, then "everyone else" will have to come up with some models competitive with the latest and greatest from the US and China. Absent that, there's just no pressure to bring the US and China to the "share the wealth" table.

Unfortunately, "everyone else" coming up with a competitive model is not gonna happen anytime soon.

The pressure for them to export models is that doing so super-charges the growth of the domestic industry. Same reason why they export solar panels, instead of just hoarding all of them for domestic deployment.

People pay money for the solar panels, though. It's not obvious to me that giving away expensive LLMs for free is meaningfully helping grow the domestic economy, as opposed to foreign inference providers who get their GPUs from Nvidia.

Giving away open weight models, if you dismiss altruism as a motivation from the outset, is a way to salt the earth while at the same time building mindshare.

It makes it harder to extract decent margins from models at or below the quality of the open models, and so makes it harder both for new entrants and for any existing providers that are depending on cheaper models for revenue. At the same time you make people comfortable with your product.

It's the IP version of dumping products below cost if you're capital rich and want to winnow down the competitive field while "buying" customers.

They are dumping products (models) below cost. It's just that they are not dumping their latest and greatest products (models).

The models they dump may not be good by the latest Chinese or US standards, but they are far and away better than anything anyone outside of China or the US is able to come up with.

So until we start seeing EU models or South American models or African models that are better than the models being dumped onto the market, China will not be giving us anything better.

And again, it's gonna be a long long time before the rest of the world even gets to the effectiveness of some of the Chinese models being dumped. Let alone competing with the best models China or the US possess.