Unchained - Does Capitalism Doom Every Closed AI Model to Get Copied?

Episode Date: July 29, 2026

📢 Bits + Bips has its own channel now — full episodes here: https://www.youtube.com/@Bitsandbips  Jensen Huang had been running the world's most valuable company for years without ever posting on X. When he finally did, it wasn't a hello. It was an open letter arguing that open AI models are a national asset — and within two days the signatory list had doubled to 50 companies. Anthropic and Amazon still haven't signed. Austin Campbell walks the panel through who did, who didn't, and the fight that broke out underneath it: Nick Carter arguing the government doesn't owe the large labs a business model, an Anthropic researcher publicly needling Huang about open-sourcing CUDA, Andrew Ng calling that a false equivalence, and Joe Weisenthal asking whether any of it is more than virtue signaling. Then it gets concrete. Lorenzo Valente makes the case that cheap open models aren't actually cheap once you price them per task, and asks why the US has no answer to a DeepSeek raising at a reported $70 billion valuation. Ram Ahluwalia closes with the Wright brothers, who watched Boeing and Lockheed Martin build an industry on their patents and never saw a cent of it. So can a closed model survive being copied — or is getting copied just what happens? Hosts: Austin Campbell, Host of Bits + Bips, Founder of Zero Knowledge Group, and Adjunct Professor at NYU Stern Ram Ahluwalia, Co-host of Bits + Bips and CEO of Lumida Chris Perkins, Co-host of Bits + Bips and Head of Franklin Crypto Guest: Lorenzo Valente - Director of Research at ARK Invest This clip is from a longer conversation on the open weight versus closed weight AI fight. Full episode here: https://youtu.be/lMZtZwolaeA?si=16-Z4TP227B2OUJl  We go live every Monday at 4:30pm ET. Subscribe to catch it live. Cape: Your biggest crypto vulnerability isn't your wallet, it's your phone number. Cape is America's privacy-first mobile carrier that rotates your SIM identity daily and blocks SIM swaps before they happen. Get 33% off your first six months at https://cape.co/unchained   (use code: UNCHAINED). Chapters: 🚀 00:00 Jensen Huang's surprise letter reignites the AI open weight fight 💬 01:05 Nick Carter, Julian Schrittwieser, and David Sacks pile on 🔥 02:53 'Virtue signaling' and what happens if China's open models are permanent  ⚖️ 05:15 Lorenzo's balanced take: open models aren't a free panacea 💰 06:28 Lorenzo on DeepSeek and Moonshot AI's reported valuations ✈️ 09:53 Ram's closing case: capitalism, distillation, and the Wright brothers Learn more about your ad choices. Visit megaphone.fm/adchoices

You're listening to a brief segment from one of the Bits and Bips episodes this week. The full show is now only available on its own dedicated Bits and Bips channels. So be sure to go to X, YouTube, and your favorite podcast platform and search for Bits plus sign Bips, spelled BIPS, and subscribe. Well, let's get right into the Jensen thing then. So he posted, I think his first ever post on X. For my first post, I'm sharing a letter in Vidae signed on, why open models matter. I'm going to summarize this using his own words, like clipping out the most important part here, which is open models strengthen safety and cybersecurity, accelerate innovation

and diffusion, and enable sovereignty. The world needs both frontier closed models and frontier open models. So the letter that was signed had 25 signatories at the start, many major names on there, including Nvidia, Microsoft, Meta, IBM, Hugging Face, Mistral, A16Z, Y Combinator, and Palantir. Big ones missing? OpenAI, Anthropic, Alphabet, and Amazon at the start, but OpenAI and Alphabet have signed. Anthropic and Amazon are the holdouts. Two days prior to that letter, Axios had reported OpenAI and Anthropic were lobbying the White House to curb them. So let's talk. about commentary online. I have re-shared a thing my friend Nick Carter, former podcast guest, has said is the point is simple. The U.S. government does not owe either of the large

labs a business model. If the economics of selling tokens doesn't work due to distillation, cheap clones or Chinese AI magic, essentially so be it. Later this week, he said if their business models get exposed, better that they fail now when it's VC's, and LP Capital at risk and not the general public. Likewise, this fight, honestly, some pretty juicy drama. Julian Schittweiser, technical staff at Anthropic, had replied sarcastically to Jensen. I'm so excited that Jensen is a believer in open source now, looking forward to the Kuda and GPU driver open source release. Anderang in the same thread, this is false equivalence. Everybody has the right to keep their code private. The problem is when someone tries to stop others from open sourcing.

And David Sacks, White House AI advisor, said the entire tech industry, save for Anthropic, has come out in favor of open source AI. They won't stop until they kneecap open source. So the safety case was made by an anthropic researcher saying, essentially, that's just not true on the letters claim that the community catches vulnerabilities. If Open AI's model that hacked hugging face had been open weight, quote, anyone with a few chips could run it safeguard free. The way I would ultimately put this, I think is from Joe Wisenthall of Bloomberg. All these CEOs are investing heavily in closed source AI. How is this just not textbook virtue signaling that would immediately be called as such in any other context. So open weights, closed weights. And I specifically, Chris, want to start with you,

because I want to start not with an economic question, but with a structural question. If we live in a world where we accept that Chinese open weight models will continue to be a thing globally, regardless of what we do in the United States, what does it say about what our approach needs to be in the United States on this? I think that they're, you know, obviously we're big believers in open source. We think that having looked at the Chinese models, they're not a panacea. Where's your data going? Who's using your data?

You know, and yes, maybe you can in-house them. But these things are not, you know, necessarily enterprise ready. They're cheap. They have some benefits. I'm hoping that we, you know, competition is a wonderful thing. Competition is a wonderful thing in markets. It will accelerate development in a positive manner. One thing that I think is really interesting about what you just talked about is the fact that we're now starting to see the major AI companies really finally ramp up their advocacy work in D.C.

We haven't seen that previous. They were late to the game. And my understanding is that the capital that they're pushing into that space right now is on par with the crypto industry or is quickly approaching it. And so I think they're going to take a lesson from the crypto industry. Look, that said, we're at the beginning of this story, not the middle of the end. We are, technology is surpassed policy. And it's moving at a pace that is very, very difficult for many of us to fathom. In the end, what do we want?

We want principles-based approach. We want transparency, predictability. We want to be, you know, we don't want our civilizations to end, obviously. But look, in the end, I'm a big. believer in open weights and I hope that they win. Lorenzo, how are you looking at the open weight thing? I think you're a strong believer in the overall space. How does this impact your view?

Yeah, I think I have like maybe a more balanced take and also like a take from the investment side of things. Right. So like first of all, as Chris said, like these open weight models are not the panacea. But if you look at Kimi K3 in particular, right, it's like half the price of Fable or Opus Fype, right? But like he uses more than twice the tokens. So if you look at it like from a per task perspective, like we went from like which is the most perform and now which is the most performant per number of tokens and now like per task, which is like per unit of cost, right?

And so if you look at that, like you don't, you pay pretty much as same price. and you don't get, you know, frontier performance. So it sounds like the, like Kimmy K3 in particular, it's not like 10x cheaper than Opus and Fable number one. Number two is, look, I think from the investment side, and you know, we're invested in both an open and anthropic, right? If you look at, which was, I looked at this like earlier this morning, right? So Deepseek is raising right now, you know, it seems like they're raising at more than 70,

billion of valuation. There are, I think, over like 600 million of run rate kind of revenue. And Moonshot AI, which is the lab that created a Kimi K-3, I've seen some stuff like at 25, 30 billion, right? So like those are, and Chris, those are huge venture outcomes, right? Like, I mean, forget about open AI and anthropic, which are like, have the cost of us like to over a trillion, but like, like, if you take out like open-anthropic, like cursor was bought like at 60 billion and XAI was basically

rolled up into SpaceX, but it was kind of an internal thing. So it's like those are one of the biggest outcomes in AI. Why don't we have competitors in the US? Like we have the best AI researchers. Why can we compete like at the open way front? And I think the dirty little secret is most of these models are probably distilling a large portion like to be trained from like US. And probably like China is subsidizing a lot of the first party API like inference or even pre-training, right? And so like the reality is like we have no idea what the cost structure of these models is. And if we were like obviously this selling is forbidden in the US, which I think is the main reason why we don't see $50 billion deep sticks walking around like in the US. I think we have the infrastructure. We obviously have the talent.

And so, like, look, that is kind of the only point. I think the other thing is just like data breach concerns, right? It's like, look, if you look at open browser, I think like 60 or 50 percent of the token volume comes from a Chinese-created models. But like most of that is hosted like in US inference, right? It's not hosted like in China. And granted, like you can you can run this on prem. And this is not something you can run on your laptop, to be fair, like you need a data center. but like some kind of like closed on-prem, there's still concerns, I think, about data bridge, right?

And this is not, like, this is not new. You know, I looked into this like for cellular networks. Like I remind people like Huawei is forbidden like in Europe to build like cellular towers. And I think it's the same in the US, right? And so why is that? I think it's just not enough evidence that, you know, there are no data bridge or security concerns, honestly. And so I think as, you know, as long as if we have like a regulator that comes in and say, hey, like this model, you run it on prem, you're 100% sure you're not going to have like, you know, a data leak or a data breach. I think that that is fine.

Otherwise, honestly, I think for a lot of enterprises, it's just going to be tough to use some of these open weight models. There will be, there will be room for closed weights as well. And so totally different strokes or different folks. And, you know, it's not dissimilar to crypto where some people will want an intermediary. Like intermediaries are never going to go away. Like there's a lot of value that intermediaries provide. I think what I would have, but at the same time, there should be open weightings as well to complement. And let the market choose.

Yeah, the industry, what's good for the public are open weights, right? The world needs more low-cost, abundant. intelligence, low-cost abundant energy, low-cost abundant robots and care and labor. So that's what open weights delivers. If you are anthropic or your open AI, or you've got a proprietary model, then you live in a closed-weight world and you want to extract rents from that proprietary IP. That's their natural incentive. And they're entitled to do so under capitalism. Now, Now, capitalism has distillation as a part of our core feature. The Wright brothers created an airplane in 1905 a decade later.

New companies, high-growth companies like Boeing and Lockheed Martin were formed, distilled the Wright brothers IP and created these new planes and form factors. The Wright brothers did not benefit from that. That's just called competition and capitalism. So let the market play out. Let's see how it evolves. I hope that we do see successful open models. I also hope that the closed model framework can win too because they can then raise capital and fund more R&D.

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