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I doubt he was claiming that. He's probably saying that the ability of Chinese companies to be able to distill frontier US models has put downwards pressure on the price of all models.

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I'm saying that it is unclear that without distillation this wouldn't still be happening. There is a massive narrative that no one but OpenAI, Anthropic, and Google can make a model without distilling. But there's basically no evidence of that.

I think the (non-definitive) evidence is that the chinese models are always just slightly behind the publically released US models, and never ahead.

I think it's more that distilling is enormously cheaper than training from scratch to achieve the same results

Alternatively, modern AI is good enough at optimizing its own kernels that it just keeps pushing costs down. Unlike the semi-decentralized inference provider community, OpenAI has both the talent and the compute to throw at the problem of making their models much more efficient to run.

GPU kernel optimization is just the kind of well-bounded problem with clear success criteria that AI loves.

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