Tyler Cowen Doesn't Think America Should Ban Chinese AI Models

**John Coogan** (0:00)
And without further ado, our first guest of the show is in the waiting room. We have Tyler Cowen, the American Economist, to talk to us about all things. How are you doing, Tyler? Good to see you again.

**Tyler Cowen** (0:09)
Hello, how are you? I don't drink coffee.

**John Coogan** (0:12)
I was about to ask. I have to ask every guest of the show.

**Jordi Hays** (0:15)
Are you gonna start?

**Tyler Cowen** (0:17)
I've only had coffee twice in my life, both times in rural Ethiopia in a coffee ceremony. And it was amazing, but I thought, this is the peak. I can't beat this.

**John Coogan** (0:27)
Is that because you'd become too powerful, or do you see it as a Faustian bargain?

**Tyler Cowen** (0:31)
I see people getting addicted to it, and if they can't get their morning coffee, they have headaches.

**John Coogan** (0:36)
Yeah.

**Tyler Cowen** (0:36)
I don't want to be there.

**John Coogan** (0:37)
Yeah, it does become a new supply chain.

**Jordi Hays** (0:40)
How often are you somewhere where you can't possibly get a coffee in the morning?

**Tyler Cowen** (0:47)
I don't know, it can't, but you have to go out and get it, or go to some effort, or you're in a hotel room and you make a crummy coffee there, and then you don't really enjoy it. It's just simpler not to have that addiction, I think.

**John Coogan** (0:59)
What's very interesting is that caffeine pills are incredibly economically efficient. It's like one cent for the equivalent of a cup of coffee if you buy them in bulk, and yet absolutely zero adoption. People love a cup of coffee even if it's a couple bucks. It's like a simple pleasure, it's a joy, people just can't stop paying for them.

**Jordi Hays** (1:19)
Do you do anything in the morning, any type of ritual that you feel like you have to do to be yourself?

**John Coogan** (1:25)
He's like Celsius.

**Tyler Cowen** (1:28)
I get high from mineral water, but if I don't have it, I'm fine. I'm not craving it.

**John Coogan** (1:32)
You're addicted, okay.
Well, let's talk about artificial intelligence. How are you thinking about the latest debate around Kimi K3 open source AI? Where should we begin the discussion? And then I'm sure we can narrow down a bunch of different ways.

**Tyler Cowen** (1:51)
Open source is coming and is here, whether we like it or not. Of course, a lot of it will be from China. We should allow American competitors to proceed on an even footing. But basically the attempt to outlawed or ban it or use sanctions against it is going to fail miserably. Like what about multinationals? What about companies whose affiliates use open source? What about all the major US companies that use open source Chinese products right now?
I hope, I plead that the Trump administration gives up on this crusade.

**John Coogan** (2:23)
Sure.

**Tyler Cowen** (2:23)
It cannot work.

**John Coogan** (2:24)
Okay. So I want to push back on it cannot be banned because at first blush, I agree with you. It is software. It is something that can just be downloaded. You can download the weights and just have it. Anything that's replicable infinitely should just proliferate across the world very quickly. But the fact that you need an NVL 72, you need a whole server rack, you need equipment and infrastructure, that acts as a point of leverage. I'm not saying that we should ban it. I'm just saying, if you put me in charge of banning it, I think I would have an easier time banning open-source AI than banning music distribution, for example.

**Tyler Cowen** (3:05)
What will you do when it's on device? How long is that from now?

**John Coogan** (3:08)
That's true.

**Tyler Cowen** (3:09)
Why go down the path at all?

**John Coogan** (3:10)
Yeah. That's a good point.

**Jordi Hays** (3:12)
Yeah. What lessons are there from the automotive industry for this moment?
Just given the use of tariffs, and how those have worked and haven't worked, and we were talking earlier about how Europe's approach the problem. You see BYDs all over Europe now, but at the same time, many of the manufacturers have been hurt most by just losing the Chinese market, or not losing it, but having declining sales there because of local alternatives.

**Tyler Cowen** (3:50)
I think if Europe starts a major trade war with China, Europe will lose. This is a sad reflection on Europe, and it's a sad reflection on Europe that they can't just say, oh, we'll make fewer cars, we'll do five or six other great things that we're readily positioned to shift into. They're not really there.