America is offering closed and expensive AI; China is offering open and inexpensive AI.
This is good for China if the global marker is content with “good enough” capabilities if it means a lower price tag.
This is good for America if the premium is worth the additional cost in the eyes of the global market.
AI is different than manufactured goods; the technology can progressively improve itself as more people use it.
China’s approach may accumulate enough consumers to supercharge it—at least according to “The Commanding Heights,” a spicy new take on the trajectory of the global AI economy.
But as we’ve seen with Anthropic’s race against OpenAI, cheaper models won’t necessarily win the AI race. America may benefit from the accumulation effect first.
OpenAI has sought to win the market by this same strategy of “cheaper yet comparable.” Yet, the market has favored Anthropic because it’s superior capabilities.
Anthropic has also slashed its costs through engineering breakthroughs, offering a more capable and cheaper option.
Again, AI is different than manufactured goods; there may be more incentive to opt for better quality despite the premium charge when the stakes are massive.