The AI war, the battle for the future - China vs. USA
China offers free artificial intelligence - the largest companies in the USA understand the implications and are rushing to do the same:
Jensen Huang, founder and CEO of Nvidia, issued a rare statement yesterday along with a letter bearing 25 signatures:
The message is clear,
American artificial intelligence models should be open so that anyone can download and run them on their own servers,
Among the signatories are Nvidia, Meta, Microsoft, IBM, and Palantir, NOW
Elon Musk and Zuckerberg also expressed support,
The USA and China view the artificial intelligence revolution as a battle for the future - between China and the USA.
But in reality, both sides have the same goal.
For months, China has been releasing advanced versions of its models for free download - and the largest companies in the USA want the same to happen for them.
The question to ask is:
Why does the leading side in the competition support the method of the side that is lagging behind?
Let's start by correcting a misunderstanding:
An open model does not mean it is free.
The open thing is the model file -
The download is free, but running it is not - it requires a server, electricity, and engineers.
In many cases, running a small model independently costs more than paying for a ready-made service.
This distinction explains everything,
Consider Nvidia's situation.
If the models remain closed - they will only run in the data centers of 3 or 4 large companies.
Nvidia's customers will only be those few companies, they will make large-volume purchases, negotiate prices, and eventually start producing their own chips - to be precise, they have already started.
If the models are available for free download - the picture will change.
Every bank, every hospital, every factory, every university, every government body will want to run their model on their own servers, the number of customers will grow from 3 to millions, and none of them will be large enough to negotiate.
In other words, Huang does not want his product to be free, he wants what surrounds the product to be free.
The cheaper the model - the greater the demand for the hardware that runs it.
Look at the list in the image:
Chip manufacturers, server manufacturers, cloud companies, security companies, software companies, and investment funds.
There are no companies whose main business is selling the model itself,
The real information is in what is not on the list.
This game has a name and a history:
In 2001, IBM invested about $1 billion in Linux - its goal was not to make money from software, but to block the revenue of its competitor that sells software.
Google also opened Android and presented its competitor that sells phones - a free operating system.
In both cases, the side giving away for free was not truly generous, it simply eliminated the layer where its competitor made money.
IBM also signed this letter,
On the Chinese side, the calculation is even clearer!
China cannot buy the most advanced chips,
If the competition is about the largest model, it will lose - but once the model is available for download, the value of owning a large model decreases.
In other words, free is the weapon of the side lagging in chips.
Additionally - giving it away for free costs China almost nothing.
In any case, it cannot easily sell these models to the West due to trust and regulatory restrictions, so their value is almost zero.
It doesn't need to surpass its competitor, it just needs to make it harder for them to make money.
What it truly gains is something else,
Engineers learn by working on models they can touch.
Tools, methods, and habits accumulate around the downloadable model - companies build their products on top of it and changing becomes more expensive.
The standard is created around what is easiest to obtain - and not around what is best.
There is also the hardware side:
If the world builds on Chinese models, these models will be adapted for China,
The software ecosystem pulls the hardware ecosystem after it.
This is what Huang truly fears.
Now - let's go back to the first picture:
China and the USA have the same goal: to make money from selling the model itself.
In the USA, there are discussions about regulations that would restrict the publication of open models - and the companies' fear is that if their government restricts them, this entire field will fall into China's hands.
The real sentence in Huang's letter is:
"Do not tie our hands while the other side is giving everything away for free."
This is not unique to artificial intelligence,
When technology starts to be distributed for free, it is not a gift, but a tool used to destroy the layer where someone else makes money.
The foundation provided for free is what sets the standard,
The meaning of this is clear:
If there are no open models, a country will have to lease its intelligence from three companies.
If there are open models, it will be able to run them on its own server, will not share its data, and will modify them according to its needs.
The word "sovereignty" in Huang's letter describes exactly this.
Everyone thinks this issue is about transparency and security - everyone is wrong.
The issue is about who will control the future - China or the USA