Why China's Affordable AI Is a Worry for Silicon Valley

Anthropic is losing money. They need to raise that price to survive in the long term. But they can't because GLM-5.1 exists at 1/5 of the price. Not a lot of people use GLM-5.1, but they don't have to. It merely has to exist at the price it does to prevent Anthropic from becoming profitable.

I'm not sure how Z.ai pulled that off. I assume the price I see (about $4.40/M-token vs $25/M-token for Opus on openrouter.ai when I last looked) covers the margins of the inference providers, so the difference must lie in the R&D costs. The model originated at Tsinghua University, its continued development likely sustained by the Chinese model of state-backed venture capital and strategic subsidies. In effect, the public sector is paying for the R&D, allowing the commercial product to be priced at a level that private Western firms simply cannot match while seeking a profit.

You could imagine the plan always is to destroy the USA's capitalist model of R&D, if it wasn't for the fact that until a few years ago public funding of science to feed fresh ideas into capitalist enterprises (the "Vannevar Bush" model) was also used by the USA.

edit: nm, archive can't get past the JS block.