Enterprises are more nervous about frontier model providers like OpenAI and Anthropic than about Chinese models, due to confusion around data policies and the inability to run frontier models on their own infrastructure.
Alex Atallah observes a counterintuitive dynamic: companies are more nervous about US frontier labs than Chinese models, primarily because data policies around where prompts are stored and reviewed create uncertainty, and frontier models cannot be run on a company's own infrastructure. ✦ AI generated
Alex Atallah · 20VC · 2026-08-10 · original ↗
starts at this moment · 34:17
“What do you think US companies are more nervous of, frontier models or Chinese models?”
I think they're they're more nervous about frontier models usually. Part because there's just like a a much there's much more confusion around the data policy about what's like actually happening to the prompts they're sending and um where they're being stored and how they're being looked at. Um and you can't run them on your own machine or in a provider of your choice. Uh and so that just immediately creates all of this uncertainty in a lot of enterprises.
verbatim transcript · starts at 34:17
34:17models? >> I think they're they're more nervous about frontier models usually. Part because there's just like a a much there's much more confusion around the data policy about what's like actually happening to the prompts they're sending and um where they're being stored and how they're being looked at. Um and you can't run them on your own machine or in a provider of your choice. Uh and so that just immediately creates
34:46all of this uncertainty in a lot of enterprises. And [snorts] it's uncertainty that they can also pattern match. It's very similar to like you know, running on their own infra versus running in their VPC. Um and and knowing like who can see the data. Um so like >> exactly? Like they're more nervous of like US companies headquartered in Silicon Valley where you can see and touch and
35:13feel the headquarters and the leaders. It's just like what a strange world to be in. >> Yeah, it it is very strange especially with these with the frontier models like doing the like having the biggest cyber posture right now. Like the the Um they're doing the best at cyber. >> company kind of posturing haha we hacked someone? First you had OpenAI, then you had Anthropic, and then you had Zuck
35:37coming out I don't want to miss the party we did too. >> Yeah, well I think they have they they have to talk about it. Like the right thing to do is to reveal when there's been a cyber incident involving your model. Um covering it up doesn't work. Or it's not going to work in the long term. And it certainly looks like they're all bragging about it. Um but really if you
- ·Enterprises more nervous about frontier models than Chinese models.
- ·Confusion around data policy: prompt handling, storage, review.
- ·Cannot run frontier models on own infrastructure.
- ·Creates significant uncertainty for enterprises.
- ·Unclear what happens to sent prompts.
- ·Data storage and review processes opaque.
- ·Lack of control over model hosting.