Chinese open models like Kimi K3 and Qwen3.8 Max shift the industry's focus back to marginal costs and cost of goods sold, as inference costs scale with revenue

and they are losing.@deepdishenjoyer:lmao openai admits it does not want fully automated luxury space communism, they are openly admitting they want technofeudalism where they own everything [image]Dax /@thdxr:“One probable outcome of an open-weight-model-dominant world is full AI communism” [image]@signulll:i can probably take this thread point by point & counter it hardcore but the quote tweets have done that so it's not that interesting. but beyond that.. you as an openai head of policy simpl

Stratechery 2026-07-21 Ben Thompson

Context & Ripple Effects

The discussion around Kimi K3 and other open models has moved beyond benchmark leadership toward whether low-cost model access can constrain the economics of proprietary AI services. Earlier coverage argued that a broader set of capable models could prevent a small group of frontier labs from sustaining exceptionally high inference margins.

That commercial question now sits alongside a policy fight: US scrutiny of open-weight Chinese models could shape which models enterprises can deploy, even as their economics make them more attractive.

First-order effects

Chinese open models put direct pressure on AI providers to account for inference as a variable cost that rises alongside usage and revenue, rather than treating model access as a pure premium software offering.
Buyers gain a more credible basis to compare proprietary API pricing with self-hosting or alternative model providers, particularly for high-volume workloads.

Second-order effects

Frontier labs and model hosts face stronger incentives to differentiate on reliability, tooling, distribution, and enterprise controls if raw model access becomes less scarce.
Compute suppliers and cloud platforms become more central to competitive outcomes: lower model prices do not remove the need to serve growing inference demand efficiently.

Third-order effects

If capable open models continue to proliferate, durable value may shift from exclusive model weights toward the infrastructure and application layers that manage, optimize, and monetize inference.
The market could become more geographically segmented if model-access policy limits adoption independently of technical capability or operating cost.

The trend: AI is shifting from a frontier-model scarcity narrative toward competition over the unit economics, infrastructure, and distribution of inference.

Discussion

@deanwball Dean W. Ball on x
Some observations on Kimi: 1. It's a very good model! I don't think its performance can be explained away by distillation or anything like that. In agentic coding sessions, it seems pretty much on par with the best public models of Q1 2026. In my fairly limited use, it also s…
@davidsacks David Sacks on x
I'm not sure whether Dean Ball is confessing to a regulatory capture strategy or simply predicting this will happen (he now says the latter). Either way, the weaponization of regulatory uncertainty as a competitive tool should be completely unacceptable. He argues there's no [ima…
@stratechery @stratechery on x
Who's Afraid of Chinese Models? Everyone is worried about Chinese models, but the frontier labs will be fine; we need to enable open U.S. alternatives. https://stratechery.com/...
@martin_casado @martin_casado on x
“Open-weight models are inherently decelerationist” .... this is a grossly incorrect statement with no supporting arguments or logic that is counter to the long arc of learnings of the industry over the last 50 years. What a stupid thing to say.
@benbajarin Ben Bajarin on x
Overall a great read and I agree with all of it by @benthompson [image]
@willmanidis Will Manidis on x
My friend Dean Ball has advanced an argument for the de facto protection of American frontier intelligence providers. Dean does not propose banning Chinese open-weight models. Banning things requires Congress. He proposes something more characteristic of the modern
@garrytan Garry Tan on x
Great reminder to stay frosty
@rabois Keith Rabois on x
Someone actually understands what is going on.
@jachiam0 Joshua Achiam on x
Some observations, in the wake of the Dean Ball open source discourse. In my long tenure at OpenAI and as a public commentator on social media, I never felt pressure from OAI leadership or the comms department to say or post anything; I always gave my own view. It's possible I
@dillon_mulroy Dillon Mulroy on x
actually an insane thing for openai's head of strategy to publicly say [image]
@jukan05 Jukan on x
It's no exaggeration to say I come to X for exactly this kind of intellectual elitism. This is basically porn to me.
@egrefen Edward Grefenstette on x
What the fuck did I just read?
@bubbleboi Bubble Boi on x
This is a level of having your head up your own ass I've never seen before.
@francoisfleuret François Fleuret on x
“Open-weight models are inherently decelerationist” You young people do not know, but we went through exactly the same kind of bullshit when linux started to get market shares.
@crypt0lake @crypt0lake on x
this post has dark energy very american bush-esque energy right here freedom is slavery type language grim
@wanguws Howe Wang on x
I give 6 months [image]
@blancheminerva Stella Biderman on x
It continues to be an excellent heuristic that when employees of trillion dollar corporations shake their fists and scream “you just want communism” you're doing the right thing.
@martin_casado @martin_casado on x
Do you know what open weights model actually decelerate? The formation and power of oligopolies. You know, those things which really do stifle innovation.
@buccocapital @buccocapital on x
OpenAI taking a page out of the Bush administration's playbook. You can get a smart-sounding person to justify anything! If you can get a Ivy League law professors to use constitutional theory of law and the concept of statehood to justify a proactive war on the abstract
@rnaudbertrand Arnaud Bertrand on x
This is a thoughtful post by the Head of Strategic Futures at OpenAI but his claim that “open weight models are inherently decelerationist” is fundamentally wrong. Yes it may be decelerationist for individual companies like OpenAI or Anthropic (and even that's not sure at all)
@cgtwts @cgtwts on x
“Open-weight models are inherently decelerationist”. [image]
@jaldrichpl Jonathan Aldrich on x
It's just so RICH that the Head of Strategic Futures at an organization that (A) was founded as a nonprofit (B) with a vision of promoting OPENNESS in AI and (C) is literally called @OpenAI is now throwing shade at open source / open weight models. How far they have fallen.
@albertwenger Albert Wenger on x
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” Upton Sinclair
@grady_booch Grady Booch on x
“Open-weight models are inherently decelerationist” Let me reframe that for you: “open-weight models undercut @OpenAI's ability to make piles of money for a product whose ROI is still a large negative number.”
@tetsuo_cpp @tetsuo_cpp on x
Babe wake up, new insufferable frontier lab employee tweet dropped.
@qualiascript @qualiascript on x
it's 2001. open-source Linux is better than Windows on servers. Steve Ballmer calls Linux “cancer”, “communist” and asks for it to be regulated away it's 2026. open-source LLMs are better than ChatGPT/Claude on costs. they are called “decelerationist” and “communist”
@drnicka Nick Almond on x
Unhinged shit from this OpenAI strategy bellend. He admits Kimi is as good as the frontier and it's not basic distillation. So can't just call it theft. So calls open models communist instead. Anything that is a “public good” is commie apparently. Somehow then makes the leap
@ruima Rui Ma on x
Oh look someone who works for OpenAI telling you that - AI is so dangerous! How can you let anyone but us handle it! - Anyone who lets other people use it basically just doesn't understand tech. They dumb boomers. We smart tho. Never mind their regulations actually show a
@pawelwargan Paweł Wargan on x
OpenAI's Head of Strategic Futures says that AI as a public good rather than a “market product” is a path towards a “dystopian hellscape” of automated communism. These people are fighting tooth and nail against the democratisation of technology — and they are losing.
@deepdishenjoyer @deepdishenjoyer on x
lmao openai admits it does not want fully automated luxury space communism, they are openly admitting they want technofeudalism where they own everything [image]
@thdxr Dax on x
“One probable outcome of an open-weight-model-dominant world is full AI communism” [image]
@signulll @signulll on x
i can probably take this thread point by point & counter it hardcore but the quote tweets have done that so it's not that interesting. but beyond that.. you as an openai head of policy simply cannot publicly post content where you blatantly introduce mechanics for fud
@jun_song Jun Song on x
An OpenAI (aka ClosedAI) executive is really out here saying the most absurd things. They're claiming that open-source AI is decel and wants a dystopia—the biggest load of nonsense I've ever heard. It's pretty obvious they're just terrified of their own company going bankrupt.
@batwood011 Brian Atwood on x
This is grotesque. I bet Dean is a good, smart guy. Yet he is trying to convince you that hosting an LLM in your basement - private and sovereign, as the Founding Fathers would have wished - is dystopian communism. Now why would he do that?
@benjaminnorton Ben Norton on x
This guy who works at the poorly named OpenAI (or more accurately ClosedAI) laments that China's open-source models could lead to: “full AI communism, which is precisely what China proposes: rather than a market product, AI is a ‘public good’ which will ultimately be provided by …
@growing_daniel Daniel on x
Okay, I'll take a hack at Deans argument without his conflict of interest. What China is doing in AI is called dumping. They do it in literally every industry they enter. The goal is to kill all local competition by subsidizing their own industry so they can produce at a loss,
@yacinemtb Kache on x
You know that thing that happens when you can't read a big blob of text because an LLM wrote it and it contains zero entropy? Yeah
@dee_bosa Deirdre Bosa on x
The irony of this: China's strategy is remarkably capitalist... use free models to win distribution and capture the ecosystem. This meanwhile proposes gov't intervention to shield American labs from competition. America is better off competing than manufacturing FUD
NewsMax.com Brian Freeman on x
Trump Weighs Curbs on Chinese AI Models
@huaijiangzhu @huaijiangzhu on x
my spicy theory is that chinese ai labs keep winning because of culture, not talent or resources. chinese labs still have a deeply hands-on engineering culture deepseek and kimi are flat organizations where science and engineering are fused...but sf tech bros have decided that “…
r/LocalLLaMA r on reddit
US gov't lobbied by major US labs is about to ban open source models.

Chronicles