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I assume the Chinese corporations can operate in the red forever and be subsidized by the Chinese government.

That's true of any company in any country. If you can convince the government that your company is sufficiently important, you can get subsidized.

My point was that the AI companies in China have already convinced the government to subsidize them.

Good for them.

Tax breaks, fee reductions/waivers, direct monetary incentives, and shielding from "unfavorable" regulation -whether local, state, or national- are all subsidies. Hell, depending on the particulars, government contracts can be subsidies... there's more than one government engineering project out there that could be reasonably referred to as a "jobs program for PhDs", and still more that are corporate handouts.

Every business believed by its "home" government to be sufficiently important gets subsidies when it asks for them... regardless of what nation houses that government. If your claim is that the major players in the "AI" industry aren't getting subsidies from local, state, and national governments in the US, then my claim is that you are lying.

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