American AI Is Locked Down and Proprietary: It's Losing

I’m suspicious of some quotes here, “80% of startups using Chinese models,” doesn’t seem quite right to me. I just interviewed at several startups and they were all using the US models. Maybe they have some minor use of Chinese models but the bread-and-butter of most of these businesses model use is the Claude and Codex subscriptions.

This is a very strange article considering that Llama, the mother of all open-weight models, has led to anything but success for Meta.

Also, enterprises don't give a rip if models are open. They care about zero data retention (and sticking with whatever vendor they're already using).

This blog post is suspiciously close to being a restatement of what Alex Karp recently said on CNBC[0]. It's important to remember he's the CEO of Palantir and hardly a neutral observer.

There are many reasons to celebrate open models, I run them myself. However there's not yet enough evidence that 1. America is losing the AI race (pardon jingo-ey phraseology) and 2. American AI labs are losing because their models are not open-weight.

0: https://www.cnbc.com/2026/07/01/palantir-karp-open-ai-anthro...

I do think open-weights models are going to "win" in the sense that they're probably going to be dominant when the hardware to run them becomes affordable. (which might be a while). Although I guess you could probably rent the GPU's yourself to hypothetically save on costs. (I'm a little skeptical -- I've heard of companies doing this and the inference bills are surprisingly high -- assuming the sources are correct. I don't know if a lot of people really want to be advertising "oh god our bill is horrible")

I'm sort of baffled by what the entities that train the open-weights models get out of it though. Is it just a direct play to undercut the US providers because they view them as a threat? I just don't really understand the business model behind it.

I do not understand the logic going into these companies. Flagrantly violate all IP in Human history, essentially claiming domain over the heritage of Humanity... And... Try to privatize it? When the technology -- and data -- are both public domain to begin with?

It is ming-boggling stupidity. If there is talk of bailouts as the dust settles, there it would just be further evidence the system is ethically, financially, and intellectually bankrupt.

EDIT: Spelling mistakes

There is no coming back. After all, open-weight is NOT open-source. It is basically free model. And you pay to host it.

The value proposition is that 100's of providers and host and sell it. 1000s of businesses (eg. Microsoft, Databricks, Palantir to small startups) can run it, finetune it and own the IP and pay only for hosting.

On the other hand, you have OpenAI and Anthropic, who need to charge at 90%+ inference margin. It is because of 1) sunk cost, 2) sky-high salaries that they paid to keep the talent. Companies like Meta screwed things up badly by paying billions of $ for chief engineers.

Chinese labs are doing a favor to the world. But I can also say with 100% certainty that if US labs were to close shops next year, Chinese labs would immediately start charging $$. In fact, I think it might happen with open weights model soon. But still these fees will be one-fifth or one-tenth per token. Also it does not come with all the guardrails.

Solution: US labs need to reduce their costs, cut the salaries across the board and compete. AI and robotics are the last hope of US to get back to industrialization and continue being the superpower.

Interesting detail from Ben Thompson's piece on Chinese models - https://stratechery.com/2026/whos-afraid-of-chinese-models/ - apparently Xi Jinping gave this speech recently http://english.scio.gov.cn/topnews/2026-07/18/content_118605... which included support for open source models:

> We should seize this rare, historic opportunity to encourage open source, openness, collaboration and sharing.

AI models cost tens of millions to train. Offering them for free won’t justify the upfront costs.

The Chinese model of model training/open sourcing only makes sense in the context of the overall strategy of undercutting American frontier labs’ profit margins.

This entire piece boils down to “I like open source therefore it is winning”.

Everyone here has already raised good counterpoints, but one more is that all the companies publishing open weights models are heavily VC funded. What is their exit strategy? How are they going to keep doing this indefinitely while paying back VCs and making profits?

It's not losing yet but I think it will.

I use Gemini Pro (got it with my 5TB of Google storage) and for a while it seemed if Google had pulled the rug as I was running out of quota after only a few hours. That seems to have been dialled back a bit lately...

I also use Chatbot with Deepseek V4 Pro and GLM 5.2. However, GLM 5.2 seems to eat tokens like crazy as the context increases. Anyway, there isn't a meaningful enough difference between the two to be honest and Deepseek is pretty magical imo.

The point I want to make is that to me it seems clear that China is totally undermining the West with AI. I'm fine with it tbh. As long as more and more AI is released into the wild, rather than locked behind massive token farms like OpenAI then I'll be happy. Don't get me wrong, I can't run Deepseek on my computer at home but someone can!

The US (and the west) has invested trillions at this point into datacenters, chips, bribery/lobbying but it doesn't look like China has dropped the same levels of cash as the west (that's the way it looks to me, at least!) so they can just roll out new models every so often that are more than good enough.

This level of cash burn in means the west has no choice but for this to succeed or every pension fund and stock will tank! And China knows this, hence the push to release more and more really good models.

Anyway, just my $0.02