AI as economic warfare

People often ask me how I feel about open-source models, and to be clear, I'm very supportive of them. But I can't help pondering about the following...

Open source always was and always will be a financial weapon by design. You see, one of the primary goals of open source was by releasing something as free, it removes the ability to make money from it.

Now, I'm not sure how old you are, dear reader, but if you wind the clock back far enough, you'll find traces in history that support this claim. Heck, you're probably even using Linux right now on a computer, in your house or at a server in a data centre. This was not always true. Back when this war was last raging, back in 1998, Windows was the server operating system of choice.

Linux was created to destroy Microsoft's ability to make money from Microsoft Windows. The same holds true for OpenOffice vs. Microsoft Office. It's now almost 20 years since the Halloween papers. If you're not familiar with the topic, I suggest you dig in and get up to speed with the subject matter.

In the last week of October 1998, a confidential Microsoft memorandum on Redmond's strategy against Linux and Open Source software was leaked to me by a source who shall remain nameless. I annotated this memorandum with explanation and commentary over Halloween Weekend and released it to the national press. Microsoft was forced to acknowledge its authenticity. The press rightly treated it as a major story and covered it (with varying degrees of cluefulness).
- https://en.wikipedia.org/wiki/Halloween_documents

Now you might be wondering why I'm writing about this. It's because local models are getting good. Heck, local models these days tend to be two to four months behind the leading-edge frontier labs.

Here's the thing, though: these local models are being released for free. You can just download them, or pay a minuscule fee (circa $5 USD/month) to access Frontier's open-source models from Alibaba or Z.AI.

Meanwhile, America is dumping literally trillions of dollars into research at these frontier labs. Now, I'm not calling AI a bubble because this absolutely is ROI. At this stage, I think it's impossible for anyone to say it is a bubble.

What I hope to do through this blog post is tweak some people's thinking beyond the bubble narrative. Perhaps what we're seeing is history repeating itself, but perhaps it's a little more sinister. Now, my background is not in geopolitics. I can't help but wonder if the US economy backs itself so hard into a corner funding these research labs, and if these research labs receive a bailout, what does that mean for China? Why is China releasing these models for free?

Perhaps what we're seeing here is all-out economic warfare between one nation-state and another through the weaponisation of open source because open source was, is, and always will be a financial weapon. In history, free was previously used against companies, but, if my speculation is on the mark, this is the first time it has been used at the national level by one nation against another.

I don't know what this means, and I'll leave the commentary, whether true or false, to someone with expertise in this arena but if you're aware that this is happening, then there are many ways where you can benefit from what is happening.

If you are a student or your financial budget does not allow for dropping $1,000 a month for subscriptions from all the major labs, then you can use these open-source models.

If you're a business, you should build with the mindset that local inferencing will be a thing. I suspect that in a not-so-distant future, we will have local models where society has full visibility into what goes into their training data sets, truly open-source models that are end-to-end reproducible, and I'm excited about these possibilities.

The real question, however, is trust. I'm not saying that the Chinese models are dodgy. It's more of a meta question. You see, the question of trust extends to the frontier labs as well. As we enter this weird new space where businesses are being automated with AI, it essentially hands over your business's operations to another entity.

Another question on my mind is what happens to a country that lacks AI capabilities? When their businesses depend upon AI, and thus the country's economy depends upon AI, what happens if the spigot ever gets turned off through sanctions or war?