The Fight Over Open Source AI, Anthropic's $1.5B Payout, NYC Socialists: Evictions = Violence?

**Jason Calacanis** (0:00)
All right, everybody, welcome back. Episode 282 of the World's Greatest Podcast. It's your podcasters' favorite podcast. It's your mom's favorite podcast. It's the All-In Podcast with me again, David Sacks from Palihapitiya, David Friedberg. It was a big week. It was a big week. The continuing number one story in the world is Kimi K3. It sparked a debate about banning Chinese open source models here in the United States. Then it's gone all the way to the White House last Friday. We talked about it here. China's Moonshot AI released Kimi K3, open source model, obviously, performance on par. On par, not six months behind, not 12 months behind, but now on par with models like Opus 4.8 and GPT 5.6, which in and of itself is extraordinary, but about 50% cheaper.
This has created a bit of a panic, similar to the deep seek moment that we had here back in early 2025 The White House, David Sacks, has gotten involved. Michael Kratzios, friend of the show, said, quote, we have information that Moonshot AI distilled Anthropic's fable for the development of its K3 model. Here's how the Trump administration has reacted so far. Monday, Axios reported the White House was considering banning Chinese open-source models. A couple of weeks ago, David, I think it was three weeks ago. I gave that to you as a hypothetical, and here we are. On Wednesday, Wired reported that Howard Letnick, from our Commerce Department, friend of the show, does not want to ban Chinese models. So apparently, palace intrigue, there might be different opinions inside Trump's White House. And instead, they want to incentivize more US frontier labs to develop better open-source models. Polymarket says, 45% chance US government bans an open-source model in 2026
That was a brand new market story. It just was at 22% a couple days ago. Sacks, you called it.
Two months ago, our first victory FAP of the episode.

**David Sacks** (2:04)
I think where it's all leading to is an effort to ban open-source models. There's a lot of breadcrumbs leading here. If you look at a lot of the rhetoric around how models need to have guardrails and that with open-source models, the guardrails can be removed and therefore, they're dangerous. You see this rhetoric already in Anthropix blog posts. Any threat that they describe, they go out of their way to take that shot at open-source models. I think, again, they're trying to create ideas or put predicate facts in the public record to justify an action later on. I think it's just a matter of time before they feel like they're at a position where maybe they can push for that type of ban directly.

**Jason Calacanis** (2:44)
All right. There it is, Sacks.
What's going on at the White House? What is the administration's position here? Why are we getting multiple? Is the White House testing and probing to figure out what their position is here? Or is it just this is a super dynamic situation? What's going on?

**David Sacks** (3:04)
Well, look, I mean, I have it on good authority that there is no decision by the White House to ban open-source models, and I think they want that known. I think there's an ongoing conversation happening around what to do about Chinese distillation, and we should talk about that. But no decision has been made, and the president listens to a course of voices. He wants to get advice from as many people as possible, and I'm confident that if everybody weighs in, that the president will make the right decision, as he always has with these tech issues. I think his instincts have been absolutely impeccable on this, and he's always supported a, let's say, lighter regulation, more open approach, and that's why I think the US is winning the AI race. So I think that's kind of where things stand.

**Chamath Palihapitiya** (3:51)
Where do you stand?

**Jason Calacanis** (3:52)
Where do you stand, Sacks? That's what everybody wants to know.

**David Sacks** (3:55)
Yeah, I think it's important for me to make my opinion known in the spirit of, again, contributing my voice so the president hears all perspectives and then can make the best decision. Look, I think it would be a tragic mistake if the government were to take action against the open-source ecosystem. That would do nothing but hurt America's position in this AI race. It would backfire badly.
And I think that the key point here is that regardless of what you think about distillation, you cannot punish American developers for it. So, you know, you can't say that American companies and American developers can't use Chinese contributions to the public domain. That's just cutting off our nose to spite our face. I mean, obviously, American companies have to be able to use everything that's in the public domain because the rest of the world will be using those things. And let me just say, I've said for a while that Anthropic is guilty of regulatory capture of attempts to seek government protection. This is a company that is the fastest growing tech company at scale in history. They started the year at 10 billion of ARR. They're now over 70 billion of ARR. This is not a company that needs government protection. This is not a company that is under threat from competitors or whether they're Chinese or otherwise. And yet they have been very successful at trying to panic everybody into thinking that they need some sort of government protection. And the tell on this, the way that you know that this whole distillation thing is fake is because if stopping distillation was their primary objective, Anthropic would push to ban Chinese access to American models, not American access to Chinese models.