The global AI race has entered a new phase, and China has the cost advantage: Brookings Institution

Ah, marvellous. Brookings Institution's Kyle Chan has looked at the global AI race and declared that it has entered 'a new phase' — which, in the immortal tradition of management consultants, means the old phase didn't finish and nobody wants to admit it. The new phase, apparently, is China winning on price. Mr Chan assures us Chinese models could 'gain ground by offering greater value at lower cost,' even if they lag the US at the frontier. Translation: why buy the reckless frontier model at premium prices when last year's architecture, assembled in Shenzhen, does the spreadsheet on the cheap?

The bit that should really cheer up your morning is that Chinese AI companies are reportedly 'finding new ways to monetize open-source models.' Cynics might point out that 'open source' traditionally meant the weights are free and the profit is in services, but the new ways being discovered appear to involve attaching a meter to the public good. The frontier labs are busy spending billions on compute and apologising for rogue models, while the Chinese strategy is to let them do the research, replicate the results, and sell the equivalent of a no-frills Ryanair flight to AGI. Lower cost, higher value, zero legroom.

The Brookings take is probably right: this race is no longer about who gets to invent it first but who gets to flog it cheapest. Congratulations — we've reached the point where artificial intelligence is competing on price like a budget airline. Mind the gap, mind the frontier, and keep your credit card handy for the open-source model that turns out to have been open only in the way a casino is open.