An insightful take from Grace Shao in Exponential view on the US and China in AI:

"The real split is over where each country's tech companies believe the profit will land. China bets on applications; America bets on the model itself.^[dp] Palo Alto obsesses over model‑led destiny: ever‑bigger parameters, safety benchmarks, and a near‑cult-like obsession in the pursuit of AGI. As Karen Hao recounts in Empire of AI, Sam Altman and his peers see AGI as a world‑changing force capable of solving humanity's most significant challenges. The wager is long, deep‑pocketed and proprietary: pour venture billions into loss‑making models today; own the platform that reorganizes industries tomorrow.

China's approach is more pragmatic. Its origins are shaped by its hyper‑competitive consumer internet, which prizes deployment‑led productivity. Neither WeChat nor Douyin had a clear monetization strategy when they first launched. It is the mentality of Chinese internet players to capture market share first. By releasing model weights early, Chinese labs attract more developers and distributors, and if consumers become hooked, switching later becomes more costly.

Entrepreneurs then have the opportunity to utilize these models as free scaffolding. Taking the EV industry as an example, over twenty Chinese automakers, including BYD, Geely, and Great Wall Motors, have integrated DeepSeek into their in-car AI systems to enhance smart assistants and autonomous driving capabilities. In healthcare, it is said that nearly 100 hospitals across the country have now integrated DeepSeek for medical imaging analysis and clinical diagnosis support. Every new integration expands the model's footprint, tightens switching costs, and shifts margins to the services sitting on top."^[dq]