America already lost one AI race | TWiAI Ep 23

**Lon Harris** (0:00)
Some in the government apparently concerned that very powerful open source models could pose a threat to the US frontier labs.

**Anand Kannappan** (0:07)
I actually think that there's two races that are going on right now, and China has already won one of them.

**Alex Finn** (0:11)
American companies will use Chinese open source models hosted in America, which will hurt anthropic and open AI. It's the same thing if you said, hey, you have to use gasoline that costs $800 a gallon. Everyone else, you use gasoline that costs $8 a gallon. They're gonna just be able to have way more economic activity.

**Ori Goshen** (0:29)
There are risks of potentially having back doors. It might have significant cybersecurity risk for these companies that self-host those models.

**Alex Finn** (0:39)
Once they've kind of taken the lead, then they'll be like, okay, well, now these models are ours now and they won't be open source anymore. They just want American companies to fail. Thanks to our friends at PayPal, the exclusive sponsor for This Week in AI. Try the payment and growth platform that's trusted by millions of customers worldwide, PayPal Open. Start growing today at paypalopen.com.

**Lon Harris** (0:59)
Welcome to another episode, episode 23, I believe, of This Week in AI. We're very excited. You may be looking at your phone in confusion. That's not Jason Calacanis. That's not our usual guest host, Alex Wilhelm. No, it's me, Lon Harris. You've seen me co-host sometimes. I'm here in the captain seat for this week. Jason is in Japan. We are still doing This Week in AI and we have an incredible lineup of guests for you today.
Joining me from Patronus AI, we have their CEO and co-founder, Anand Kannappan. Thanks for being here, Anand. Great to be here. All the way from AI21 Labs, he's calling in from Tel Aviv, the heart of Tel Aviv, Israel right now, their co-CEO and co-founder, Ori Goshen. Ori, so glad you could make it.

**Ori Goshen** (1:46)
Great to be here. Thank you for having me.

**Lon Harris** (1:48)
Thank you. And joining me as co-hosted to make sure if I say something extremely dumb and outside the box on AI, there's somebody here to be like, Lon, please, come on, bring it back to Earth. He's the CEO and founder of Henry Intelligent Machines. He's one of my favorite AI influencers on YouTube. Give it up for Alex Finn.

**Alex Finn** (2:07)
Good to be here, Lon. Very exciting. And I'm sure you won't say one stupid thing, Lon, so we'll be fine.

**Lon Harris** (2:12)
Not one. If you're watching at home right now, grab the transcript, put it into Claude and see if I said anything stupid. I think I'm going to get away with it. I think I'm going to pull this off. So there is a ton going on this week. We got to talk about with this panel.
I definitely want to dig into a little bit about Patronus, about AI21, what all of you guys are working on. But I think first, before we jump into anything else, we got to talk about, are they going to ban the Chinese open-source models that everyone loves? Axios, of course, reporting that the Commerce Department, White House, and NSA this week have looked into potential ways to limit access to these foreign open-source AI models. Of course, Kimi K3 making huge headlines. Is it overtaking Fable 5 on some of the benchmarks? Trump, at an AI summit this year, said, and I quote, Our children will not live in a planet controlled by the algorithms of the adversaries advancing values and interests contrary to our own. But the concern, as I said, may not just be about cybersecurity, but also AI supremacy. Some in the government apparently concern that very powerful open-source models like Moonshot's Kimi K3, Glm-5.2 from ZAI and others could pose a threat to the US frontier labs. Of course, there are a few options on the table for what the government could actually do, but I want to take this to the panel. Anand, start us off. Do you think this is actually likely to happen, or is this just diplomacy being conducted in the pages of Axios and Politico and other blogs?

**Anand Kannappan** (3:38)
That's a great question.
I think in some ways it's both, and here's why. I actually think that there's two races that are going on right now, and China has already won one of them. The first race is the layer of intelligence that can be measured cleanly and copied very cheaply. Whether that's coding or math or anything that can be verified correctly, in many cases, I think that China has basically taken that. Although in many cases, we could say that China has been maybe three to six months behind in terms of how the frontiers evolved, but they're catching up very quickly, especially if you just look at the charts in terms of performance across a lot of these benchmarks. I think that the race that's still in play right now is the layer that's harder to measure and harder to copy. That includes, can agents actually solve real-world problems? Can it solve problems over longer time horizons? Can it solve tasks that are super reasoning heavy and where there's a lot of real expertise that's required to actually evaluate performance? I think that a lot of the close source model companies have done a lot to be able to get there. Of course, that's why they've had a ton of traction, especially, for example, in Therapeutic Enterprise.