China's strategy is to keep its AI models open-source until they catch up to the frontier, and then switch them to closed-source to capture the value for themselves — mirroring exactly what Sam Altman did at OpenAI.
Sacks argues reports of China restricting access to its top AI models reflect a broader pattern: labs like Bytedance, Alibaba (Qwen), and Zhipu (GLM) stayed open only until nearing the frontier, then closed up — the same playbook Sam Altman ran when OpenAI went from nonprofit/open to for-profit/closed. ✦ AI generated
David Sacks · All-In Podcast · 2026-07-11 · original ↗
starts at this moment · 56:17
“So explain the game on the field here. If you're going to look into what China's thinking, why would they want us to not have those open source models?”
I think the tactic is you stay open until you catch the frontier or you get close to it and then there's a really compelling incentive to go close because you want to capture all the value for yourself — which by the way is exactly what Sam Altman did famously at OpenAI.
verbatim transcript · starts at 56:17
56:17a lot from all this R&D that they're doing. Now, at the end of the day, I think the story is probably a little bit overstated. I think there are a few Chinese models that were open source that have gone closed source, but I don't think they're all I'd be surprised, let's put it that way, if they all went closed. So, for example, the number one model in China, as I
56:38understand it, is bite dances model, which is already closed. That's kind of like their chat GPT equivalent and it's always been closed. Then you've got Alibaba's Quen, which was open and now I think is going closed, and ZepO, which has GLM 5.2, too, which we've talked about a couple weeks ago because it seemed to be catching up to what was then commercially available as the American frontier at certain tasks. They
57:07I think are going closed too after having been open. And so this is I think the tactic is you stay open until you catch the frontier or you get close to it and then there's a really compelling incentive to go close because you want to capture all the value for yourself >> which by the way is exactly what Sam Alman did famously at OpenAI. Not only did they go from a nonprofit to a
57:28for-profit, they went from open models to closed models. So, it's exactly paralleling what Sam realized 3 years ago. Yeah. >> I mean, in a way, that was what I think Meta's original strategy was was that Llama was going to be open, but then they actually they've sort of backed away from open a little bit. But this is kind of an obvious strategy, right? is is that if you want to catch up, you go
57:52open. Because by the way, you're not going to make any meaningful revenue on on closed anyway because you're not close enough to the frontier. So why would anyone buy your product, but if you go open, you get the developer community on your side. So >> and you get utilization, more people use it, which in AI gives you reinforcement learning. Yeah. Sex. >> Well, having having spent some time in
58:10DC this week, I and and and talking with both the White House and Treasury, etc. on this topic. What I can tell you is while there may be some, you know, debates about regulation of US models, the one thing there's absolute agreement on is doing everything to stay ahead of China. And, you know, and and the president all the way up to the president very interested how far are we