---This is not written by AI - put it through whatever detector you want. I spent my valuable time writing it
Original above
What is a Positive Externality and What Are Some Examples?
A “positive externality” technology is one which generates societal benefit that exceeds the developer's personal financial return. For example:
— The Printing Press: While Johannes Gutenberg was the inventor of the printing press, he personally met financial ruin. The true economic value of the Press lay in the portability of language and the broader dissemination of ideas.
— Linux: Torvalds’ open-source operating system became the basis on which countless companies built multi-billion dollar businesses (e.g., Alphabet’s Android operating system).
An Analogy: Frontier vs. Open-Source as Rock Climbers
— The Lead Climbers (Frontier AI firms): Companies like Anthropic, OpenAI, xAI, and Alphabet are more capable at climbing and training the AI frontier. Because they are more skilled, the lead climbers establish the routes and place protection.
— The Followers (Open-source models): Firms like DeepSeek, Kimi, and Ollama come later. By training their models on already established frontier models in a process known as distillation, these firms approach the cutting edge faster than they otherwise would have given the work from the leaders.
Just as in rock climbing, sometimes lead climbers benefit from their fellow lead climbers, they use their routes or distill their models. Sometimes the followers lead in their own way as well, like when DeepSeek made massive efficiency improvements on model training in January 2025.
In this way, followers and their user base capture the benefits of the positive externalities generated by model training investments financed by frontier AI firms, their investors, and the American taxpayer.
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If you accept my above framing, you will see that frontier CEOs are in a bind. The open-source firms pose an existential threat to their business model and their investment thesis. Below are two of the pillars of the “slowdown” proposal:
Independent Oversight: Embedding third-party safety evaluators with deep, employee-like access inside leading AI companies to monitor risks as new models are trained.
Democratic Coordination: Establishing safety standards and agreements between democratic nations.
Innocuous enough? But how can you embed a safety evaluator in an open model? How do you apply a safety standard to a model which can be shared as easily as a movie is streamed? You can’t and that's the point. You can only prevent the models from being shared or hosted. They are not proposing safety standards on frontier models; they are advocating for a moratorium on open-models.
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What the Future of AI Will Look Like (Ending on a Positive Note)
Again, AI and LLMs are a massive positive externality technology and the world economy will benefit massively. The losers will mostly be limited to Big Frontier shareholders and the American taxpayers to the extent they needlessly subsidized these firms.
How People Will Use AI in the Future (Predictions):
— Privacy-sensitive users will increasingly run small, good-enough AI on their laptops or host locally on their own infrastructure.
— Others will use open-source models through third-party providers.
— The existence of third-party providers will create downward pressure on the prices of frontier models. Their API/subscription costs will approach those of open models.
— Consumers may fall back to familiar trusted brand names like Google and familiar business models like advertising at Alphabet and Meta will win out compared to the API / subscription model.
---This is not written by AI - put it through whatever detector you want. I spent my valuable time writing it
Original above
What is a Positive Externality and What Are Some Examples?
A “positive externality” technology is one which generates societal benefit that exceeds the developer's personal financial return. For example:
— The Printing Press: While Johannes Gutenberg was the inventor of the printing press, he personally met financial ruin. The true economic value of the Press lay in the portability of language and the broader dissemination of ideas.
— Linux: Torvalds’ open-source operating system became the basis on which countless companies built multi-billion dollar businesses (e.g., Alphabet’s Android operating system).
An Analogy: Frontier vs. Open-Source as Rock Climbers
— The Lead Climbers (Frontier AI firms): Companies like Anthropic, OpenAI, xAI, and Alphabet are more capable at climbing and training the AI frontier. Because they are more skilled, the lead climbers establish the routes and place protection.
— The Followers (Open-source models): Firms like DeepSeek, Kimi, and Ollama come later. By training their models on already established frontier models in a process known as distillation, these firms approach the cutting edge faster than they otherwise would have given the work from the leaders.
Just as in rock climbing, sometimes lead climbers benefit from their fellow lead climbers, they use their routes or distill their models. Sometimes the followers lead in their own way as well, like when DeepSeek made massive efficiency improvements on model training in January 2025.
In this way, followers and their user base capture the benefits of the positive externalities generated by model training investments financed by frontier AI firms, their investors, and the American taxpayer. - If you accept my above framing, you will see that frontier CEOs are in a bind. The open-source firms pose an existential threat to their business model and their investment thesis. Below are two of the pillars of the “slowdown” proposal:
Independent Oversight: Embedding third-party safety evaluators with deep, employee-like access inside leading AI companies to monitor risks as new models are trained.
Democratic Coordination: Establishing safety standards and agreements between democratic nations.
Innocuous enough? But how can you embed a safety evaluator in an open model? How do you apply a safety standard to a model which can be shared as easily as a movie is streamed? You can’t and that's the point. You can only prevent the models from being shared or hosted. They are not proposing safety standards on frontier models; they are advocating for a moratorium on open-models. -
What the Future of AI Will Look Like (Ending on a Positive Note)
Again, AI and LLMs are a massive positive externality technology and the world economy will benefit massively. The losers will mostly be limited to Big Frontier shareholders and the American taxpayers to the extent they needlessly subsidized these firms.
How People Will Use AI in the Future (Predictions):
— Privacy-sensitive users will increasingly run small, good-enough AI on their laptops or host locally on their own infrastructure.
— Others will use open-source models through third-party providers.
— The existence of third-party providers will create downward pressure on the prices of frontier models. Their API/subscription costs will approach those of open models.
— Consumers may fall back to familiar trusted brand names like Google and familiar business models like advertising at Alphabet and Meta will win out compared to the API / subscription model.
https://senteguard.com/blog/frontier-ai-firms-wont-reap-the-...
https://www.letters.senteguard.com/p/frontier-ai-firms-have-...
Messed up the links
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Yeah i double pasted the link. I guess I can't edit it so will just repost when the site lets me