[deskamess]

I think there is a book (Chip War) about how the USSR did not effectively participate in staying at the edge of the semiconductor revolution. And they have suffered for it.

China has decided they are going to participate in the LLM/AGI/etc revolution at any cost. So it is a sunk cost, and the models are just an end product and any revenue is validation and great, but not essential. The cheaper price points keep their models used and relevant. It challenges the other (US, EU) models to innovate and keep ahead to justify their higher valuations (both monthly plan, and investor). Once those advances are made, it can be bought back to their own models. In effect, the currently leading models are running from a second place candidate who never gets tired and eventually does what they do at a lower price point.

[kaibee]

In some way, the US won the cold war by spending so much on military that the USSR, in trying to keep up, collapsed. I don't see any parallels between that and China providing infinite free compute to their AI labs, why do you ask?