There's two basic kinds of distillation: 1) the massive [and dumb] method where you ask a question and use the answer as reinforcement (Black Box), and 2) more targeted distillation where you use one model to directly inform/train/guide another model (RLAIF).
The latter is basically fine-tuning the model with direction from another model. Thousands of businesses do this every day to fine-tune. This is almost certainly what the Chinese labs are doing, since it has a much better effect on the end result than just getting simple answers to simple questions.
These complaints of distillation are inflating the problem to make it sound worse than it is, because they want the USG to block/ban Chinese model providers as protectionism. They have already called for more export controls on chips (which is funny because DeepSeek v4 was designed to run on Huawei chips and now the other Chinese providers are following suit). But they can't come right out and say that, so their claim is that they're asking for more export controls because distilled models might not be as safe as their own. But if you show them a jailbreak of their model that bypasses their safety, they'll tell you that any model can eventually be jailbroken so don't worry about safety.
> These complaints of distillation are inflating the problem to make it sound worse than it is
Unfortunately, the Reuters piece itself is complicit in this dramatization. The lede paragraph parrots Anthropic's talking point that distillation is an "attack", without using quotes that would alert the reader that this framing is a corporate talking point. Distillation is NOT an attack.
https://research.nvidia.com/labs/lpr/slm-agents/ - Distillation data is a natural byproduct of using these models. There's no effective defence against it. Anthropic is degrading thinking blocks to summaries to slow it down and hide model internals, but in the end, the math says you're SOL and it works on MNC/Large Corporate scale well enough that the moment cost becomes a priority, you're left without the lock in you need to keep customers paying.
I've used RLAIF to build out heuristic based non-LLM models for various decision systems and achieved like, 95% F1 on certain projects. We're in a place where models can be used to fine tune a lot of stuff via loops.
>But if you show them a jailbreak of their model that bypasses their safety, they'll tell you that any model can eventually be jailbroken so don't worry about safety.
Yes this is in line with what Anthropic said in their public statements about their Fable access restriction by the government directive. The hypocrisy and inconsistency in their statements and behavior feels quite childish and controlling. I believe our companies and their leaders, friends among our other influential leaders and leaders from rich social classes, want to actively hurt most people as this behavior looks to be quite self-interested.
Not to mention, the person who brought this quote unquote jailbreak to the Trump Administration was Amazon’s new CEO. They know their IPOs are coming up, so locking their competitors out of the U.S. (even if just for the weeks surrounding the IPO date) would be a major boon.
The White House seems to love making announcements just for the sake of making the market move…. Coincidentally, right after POTUS buys a massive amount of the benefactory company’s stock
(Buy Dell Computers, lol)
You can do things like that - one example is averaging weights between related models - but not with Anthropic's models, because outsiders don't have access to the weights.
Chinese resellers are offering Claude tokens at 70-90% below official Anthropic API prices. They achieve this by reselling capacity from pooled Claude Max accounts, payments fraud, and also reselling the model output & reasoning chains to various Chinese labs. They are subsidizing model access in exchange for user logs and reasoning traces, which they then sell as training data, allowing them to operate below cost.
Claude and ChatGPT are both blocked in China. You need to use a VPN to access either, and you can't pay with a Chinese bank card. So most people who want access to Claude buy access via a reseller. It's the easiest and cheapest way to access Anthropic models in China.
These resellers operate tens of thousands of bot accounts, which is also why Anthropic introduced identity verification, to slow down the onslaught of bots.
This is one reason why DeepSeek & GLM are priced so cheaply, they are competing with impossibly low token prices in China. They have to keep prices low, in order for people to use them.
China aren't offering a cheaper solution. They are subsidizing an existing one (which is already subsidized) in order to gain foothold. The difference is that in the US subsidies come from VC, while OP implies subsidies come from the AI labs that buy the training data (which may as well also be VC backed, so just one extra hop).
This isn't "the market working as intended", this is an exhaustion fight to the bottom where the one with most money gets to stay in the market. As with most venture capital startups. I believe this VC tactic is a well documented "cheat code" to bypass market forces and build a monopoly. I find it hard to compare that with a free market.
However, I don't really mind China "stealing" from Anthropic. For us consumers we are getting the cake and eating it too. I.e we are getting rapid improvement to the tune of over a hundred billion dollars in funding, yet the market remains big enough that there's a chance of it not ending up as a monopoly in 20 years. And venture capital are footing the bill. A part of their investment is practically being redirected to fund Chinese AI development. It lets us live out our lives as happy CAC farmers[1].
So I would argue its not as much of a "cheaper solution" as it is intentionally and maliciously abusing another company's product to extract more value than the billing plans intend (given an average user), and further subsidizing the product by selling this data to competitors. But I don't necessarily think its a bad thing for us end-users. Nor for the market. But it is bad for Anthropic and its investors.
> China aren't offering a cheaper solution. They are subsidizing an existing one
Chinese labs are also pursuing legit frontier-advancing R&D into efficiency and publishing papers in the open, a culture that's in retreat at top American AI labs
> China aren't offering a cheaper solution. They are subsidizing an existing one (which is already subsidized) in order to gain foothold.
In my economics classes, we were told that (in a "free market" argument) the best thing to do if a subsidy is making something you want cheaper is to use it. You're getting your thing, and at a reduced cost.
(I'm not really replying to you per se, I'm curious how "free market" folks in these comments would respond to this.)
All I can say is lol. DeepSeek showing 3 order of magnitude efficiency gains over the performative capital furnace that was training and inference absolutely moved the bar here.
> China aren't offering a cheaper solution. They are subsidizing an existing one
So basically like US companies subsidizing offerings with selling user data, ads for crypto scams, manipulation for elections, making people addicted to gambling and so on?
Seems fair and an improvement as you can choose between that and not. Unlike say offerings from Meta where the data selling and efforts to further gambling addiction is always included.
I mean, for what it's worth, we have subsidized Anthropic by allowing them to train on copyrighted stuff. (I know it is still legal, and I support the legality, but the economics are what they are with people's content paying a big one time subsidized cost (to the level of at least 500B).
That's some "download a car", $100000 per infringement pricing logic. No one is paying anyone 500 billion dollars. I'm sure rights owners wanted that, and more too, but it's nonsense to call it a subsidy that they didn't get it.
Seriously AI companies complaining about fair use is the biggest case of crocodile tears I can think of. Irony has been dead for a while, but they dug up the corpse and set it on fire anyway.
black and white hat is relative. someone breaking into a state run database in a dictatorship and stealing documents that prove some opposition leader was murdered would be a black hat criminal if you ask their government. a hacker jailbreaking a phone to let people fix it without expensive official service is a black hat to the company. we should really switch to saying offensive and defensive or something else that doesnt come with moral implications. maybe lawful and chaotic.
Ok, but what about those shady sites that resell Windows education keys? They're certainly a "better experience" than buying legit keys, by virtue of being significantly cheaper. You aren't even really committing copyright infringement in the process, because Microsoft gives out windows isos for free, and the seller is really selling a random 25 character string, which can hardly be copyrighted.
>If there’s any bootlegging going on it’s Anthropic that’s doing the bootlegging but having mirrored the video etc sufficiently to beat copyright law.
>>If there’s any bootlegging going on it’s Anthropic that’s doing the bootlegging but having mirrored the video etc sufficiently to beat copyright law.
>US courts have consistently ruled it's fair use.
And they also have ruled that the that output of an AI isn't copyrightable.
As such copying claudes output isnt even fair use as that is an exemption to copyright but the same as copying public domain work which any and all are allowed to do.
> Ok, but what about those shady sites that resell Windows education keys?
Yes, they are fine? They might no longer include full first party support by Microsoft for not being "new". Same as buying a used car (also comes with the "shady sites" for a far longer time).
Though this not making any difference by Microsoft not doing any support either way to make more money is a business decision by Microsoft.
The current case law in the US is that the raw output of an LLM cannot be copyrighted without further meaningful arrangement or alteration by a human author.
any third party provider can offer zdr. if its a reputable company in a place like switzerland or germany i would trust them more than anthropic to hold up that promise.
> Yeah, like all those Chinese bootleggers selling DVDs for a few dollars rather than $20. Free market!
It's supremely ironic analogize distillation to copyright infringement when it's literally what Anthropic was found guilty of. It's not illegal to distill. It is illegal to pirate. And it's what Anthropic was found guilty of, not Alibaba.
I get the vague impression that this was written in a sarcastic way, but it has a straightforwardly true literal read because yes, this is what the free market is about and Anthropic will have to compete with the Chinese if they want a big share of the market. Chinese models are cheap and good; even without reselling Anthropic's services they're competitive. Which reading did you intend?
And, gotta say, the idea that the Chinese are better at selling US models than the Americans is hilarious. There might be an economic study here somewhere about just how anti-consumer and anti-progress their IP laws turned out to be. We've got an entire postindustrial revolution centred around who can ignore the most stupid laws.
Given the current US government's tightening of export control restrictions and the introduction of a bipartisan bill to block use of Chinese AI in federal agencies, I'd say the two countries' positions are not far apart.
That is ALSO happening, but that's beside the point.
Chinese AI apps like DeepSeek are freely available for ordinary Americans to download and use. There's no federal law banning private citizens from using them.
So to claim that Chinese companies are better at selling American companies' work than the American companies can do themselves when they are prohibited from operating in that market, is the wrong deduction to make.
In debt the first 5000 years Geaeber makes the case that pure “free market” trade has never really existed in “the west”. The closest to this ideal that’s ever happened was during the Islamic golden age enabled by religious prescriptions against usury.
>The closest to this ideal that’s ever happened was during the Islamic golden age enabled by religious prescriptions against usury.
How does are bans against consensual financial exchanges close to the "ideal" of the free market? It just sounds like you have an axe to grind about the financial system rather than describing free markets.
What makes this view more correct than say, "economies with marketing creates a dynamic where being competitive in production is secondary to marketing" and concluding that nothings a free market until we ban all advertising? After all, you can make a vaguely plausible argument about how marketing isn't really about the merits of the product, and therefore allowing it is antithetical to the free market or whatever
> What makes this view more correct than say, "economies with marketing creates a dynamic where being competitive in production is secondary to marketing" and concluding that nothings a free market until we ban all advertising? After all, you can make a vaguely plausible argument about how marketing isn't really about the merits of the product, and therefore allowing it is antithetical to the free market or whatever
Wait, so your pitch in favor of a debt-fueled market economy is that advertising is awesome and that we wouldn't want to "lose" being smothered in ads all the time?
Cause... sign me up for the non-financialized, non-mass-media-advertising-driven economy please and thank you. I'd even be ok with just nuking billboards and mass-media forms of ads and still allowing more direct forms of marketing, if we must compromise! Likely we could find some compromises around just how much of the debt world we regulate too (this should be obvious?).
(I thought the disconnect between the efficiency of competition and the market as realized in modern economies was pretty well understood and taken for granted, but I guess we all find ways to justify the system we're profiting from... even if that means we have to claim we love the ad breaks)
I'm flabbergasted that you look at the Chinese property crisis and say "only the West does irresponsible loans." No, 60% of China's economy is state-run companies and the remaining 40% need political officers. China is just as capable of making shortsighted decisions as the US, and they have already made several devastating ones.
>I'm flabbergasted that you look at the Chinese property crisis and say "only the West does irresponsible loans." No, 60% of China's economy is state-run companies and the remaining 40% need political officers. China is just as capable of making shortsighted decisions as the US, and they have already made several devastating ones.
While these are hardly shy claims, I don't see anything in them to say "only the West does irresponsible loans"?
> The West is in a state of psychosis with Debt and Monopolies under the illusion of free market.
> The Chinese markets are more free than West, you can just look at the Auto and AI industry.
or the prior post
>Usury and debt based economy creates a dynamic where being competitive in production is secondary to financialistion.
> In short, instead of market being driven by demand and productivity, it is driven by financier curving out monopolies.
> Peak Examples are Uber and AirBnB.
You can throw a rock these days and find a category where the products coming out of China are miles ahead of those coming out of the rest of the world, from a bunch of companies nobody had heard of a few years earlier. And the list is growing pretty steadily.
I would assume plenty of shortsighted decisions are also being made. But I would have a hard time characterizing the state of competition in the west as healthier or more productive when looking at the number of players and the quality of goods being produced in China.
...except Uber STILL faces competition, and I went back to hotels after finding AirBnB too pricy.
It is good and proper that people aim to create monopolies, as long as they want to do that in a productive and legal way! Monopolies are inherently dangerous, but the truth is that acquiring and maintaining one is not straightforward unless you can get the government to ban your competitors.
That's not true. Islamic finance forbids indefinitely growing interest. Sharia finance agreements involve fixed fees or equity shares. Late penalties can be collected but must be donated, not profit. In all cases, the borrower never owes to the lender for the lender to keep more an a fixed amount determined at the strat.
What is the implication here? Are you warning that US corporations might start doing something shady, like scraping the internet at large scale for training data? Or mass-dowloading pirated copies of books, completely ignoring copyright?
I find it hard to imagine a future where US corporations have degraded to such a point.
No, he means that the US will close most of its domestic market to competition just like China has for decades, and the US may start subsidizing and dumping its goods everywhere
> the US may start subsidizing and dumping its goods everywhere
Isn't that exactly what companies like Uber have already been doing? Take VC money, sell goods & services at a huge loss, wait until the competition goes bankrupt.
Yes. Dumping abroad is the entire model that Silicon Valley has been built on in the last 2 decades. China just copied the model. And even then it's a light version of it.
Exactly, it's funny how most Americans have no self-awareness on this topic.
And beyond VCs, which are like massive subsidies funded by printed dollars to which no other country has access, even in industries like electric vehicles, Chinese total direct subsidies to their EV companies are like $5bn per year, while the the ones provided by the US to their auto manufacturers are in the range of $50bn per year.
I don't think the US are cheaters or are doing something bad. But i do think that this propaganda about China flooding the market through "overcapacity" and subsidies is very dishonest and needs to stop.
The surviving non-American farmers would be confused by the future-speculative tense as America has already been doing this for decades in agriculture, and have been complaining for decades about both the subsidies and dumping of American corn.
Most of the Chinese domestic market is open to foreign competition. The areas that are closed off are those that are politically sensitive: publishing (including social media) and banking.
As for dumping, Chinese goods generally sell at a markup abroad, which is the opposite of dumping. Chinese tokens cost more abroad. Chinese cars cost several times more in Western markets than in China.
> Chinese goods generally sell at a markup abroad, which is the opposite of dumping
Dumping is selling goods below cost.
Usually because government is subsidizing part of the production. I don’t believe the word “dumping” is used for the similar process when Venture Capital is subsidizing it, but using the same term would make sense.
"Dumping" is when Chinese companies beat Western ones on the free market. If all claims of Chinese government subsidies on basic products were true, China would've gone bankrupt multiple times already.
You're being beaten by a Chinese company? Why improve your own process when you can just lobby for sanctions and tariffs instead!
The US spent decades transferring manufacturing, capital, and know-how to China, while Chinese students trained, and excelled, at elite Western universities. Why are people surprised that China eventually became capable of competing with the US?
Free markets work when paired with property laws that can be enforced if broken. If China could offer a cheaper solution in that framework, it would be as you say.
AI was always going to be a race to the bottom and low margins. It’s why I’m extremely bearish on AI as an investment. It’s framed as some high margin business when it’s really going to end up like your toilet paper at Costco. You will use whatever is cheapest and gets the job done.
And the value-add experiences that utilise LLMs require immense imagination et al that folks at Anthropic will not be able to conceive of - given that they have made immense sunk investments in existing assets. This clouds ones thinking immensely.
Both OAI and Anthropic have tremendous failure risk and this is of course not reflected in the fake private market valuations.
I see a world where lots of stuff is mass produced in china (tokens) but the acutal goods that deliver the experiences are designed, marketed and sold in the west at much higher prices. of course this a nightmare scenario for anthropic et al.
I used to think this.. but I think my opinion is changing. The reason is that the leaders likely will be able to accelerate faster.
So what you see is the market "stretching".. the bottom getting cheaper and the top end running away and getting more expensive. At some point the top end may be too valuable to even sell access to.
Most white-collar/knowledge-service-industry work is a weird type of work.
It's fundamentally about enabling things and largely middleman-type stuff. I have a hard time imaging what "At some point the top end may be too valuable to even sell access to." would even look like? What are you doing with that AI power, and who is paying for the output and why?
Elon probably isn't gonna spend that much on a model that can generate him ever-better fake porn but does nothing that he can use to sell stuff to other people. Especially in a world where open models are "good enough" for many things like "tell me how to fix the plants in my garden that are dying" and the like. What remains in the narrow knowledge-work space of: can't be done by an individual or small group themselves, but is valuable enough that it would make sense for people to hoard access to these extreme frontier models? Try to recreate Hollywood-as-a-monopoly by becoming the single content producer for everyone's individualized feed and so owning all the advertising budget in the world? Seems hard, we've already seen how easy it is for cheap-and-crappy-but-addictive-or-funny content to disrupt traditional media.
(There's also pure scientific research, but historically that's not very directly connected to "massive profit" and has a habit of leaking out and getting productized most effectively by other people or just being really easy to copy once someone shows how it's done.)
Robotics could be a different story, as physical labor can be more inherently productive, but "reasoning" advantages are unlikely to be a big long-term differentiator there. At some point the brick laying robot is satisfactorily building the structure, and you're good.
A huge amount of the value of "the economy" and the power of a currency is driven by circulation of money, and one thing that all the "bullshit jobs" white-collar/service-industry work does is keep the money moving and ensure that a lot of people have some good-or-services of value to exchange. If you take away the ability to offer services worth exchange from huge chunks of the economy in these super-frontier-models-replace-everything scenarios... you're gonna have a bad time?
> The reason is that the leaders likely will be able to accelerate faster
Model improvement is already hitting diminishing returns, and people aren't willing to pay substantially more for a slightly better model. There's no "accelerating away" when the new models don't open up a huge new market. If anything, the companies burning huge amounts of money on marginal improvements will be undercut by companies happy to sell current models at a significantly lower cost.
Glm 5.2 very much argues against that. Opus 4.8 level quality for cheap. That’s sufficient for most tasks, so if/when you do need SOTA models you can spend more for specific tasks but otherwise rely on the cheap but still plenty good models for everything else
If you keep studying econ you will learn that these failures are actually the norm, and thus why the only "capitalist" states to really succeed have been the ones where the state was strong enough to reign in the market.
Of course, such a state of affairs is temporary at best -- since the alternative is so lucrative!
Do you also think Chinese selling counterfeit US postage stamps on eBay for 50% retail price (which is a major problem CBP and USPIS are fighting presently) is the free market at work?
This post is so delusional and dripping with condescension I've read it three times and I still can't figure out if you're trolling or not.
Over the air TV also isn’t public domain. It’s licensed to a station for broadcast. The output of an LLM has been deemed ineligible for copyright. Until you square that pickle your circle isn’t circling.
Free over-the-air network TV is (generally) copyrighted.
The output of LLMs cannot be copyrighted. This isn't a semantic game; it's literally the case that Anthropic cannot seek relief for people duplicating the output of an LLM.
The relief available to a licensor for violating a license use restriction is cancellation of the license. And they're free to do that, just like Alibaba is free to pay somebody in Hyderabad $20 to make another one.
DMCA can't apply in this case because (this is the "C" in its initialism) it is based on copyright protections, which the output of Claude is not eligible for.
I mean, which lawyer caste do you respect? Is that one is cool with stealing credit cards to buy Claude subscriptions?
> 3. At an Italian airport: Constantly stealing bags, opening them to pick out MacBooks and credit cards, a credit card manufacturer-who sells stolen "black" credit card info to transfer stations— is racking his brains to save you money.
> This is one reason why Deepseek & GLM are priced so cheaply, they are competing with impossibly low token prices in China. They have to keep prices low, in order for people to use them.
This one does not make sense to me at all.
Deepseek and GLM are openweights, even US inference provider are selling them at much cheaper price. The price is cheap because the model is more efficient.
DeepSeek permanently cut its V4-pro API prices by 75% because they were too expensive. Without the price cut, Deepseek V4-pro tokens would have cost more than resold Opus 4.8 tokens.
Opus 4.8 is a more capable model, so almost nobody was going to pay for V4-pro at the original price.
> Without the price cut, Deepseek V4-pro tokens would have cost more than resold Opus 4.8 tokens.
You mean it's functionally as if American tokens are being price dumped in China and Chinese model providers are being forced to compete with that and innovate? So many delicious layers of irony, lol :-P
Urm, no? I man they did cut prices by 75% that part is true - but they reduced a starting price that was below sonnet.
Also it's a open weight model, doing that is impossible long term because the real price will be set by the other model providers, who priced it around 60% of sonnet inference cost. Had to look that up though, so that's today's pricing.
Is there a contradiction here? If resold Opus tokens are sold at a 93% discount, you can be a lot cheaper than Sonnet while also a lot more expensive than resold Opus tokens.
If resold Anthropic tokens undercut even the at-cost open-weight model tokens, because they're reselling subsidized subscription tokens, then you'd have to start selling open-weight model tokens at a loss in order to match them.
On the one hand they talk it up as world ending and on the other hand they can't manage bot accounts on their own service.
I want to hear how this can be rationalised.
From the article "every layer of control frontier US AI companies have added (geoblocking, phone verification, credit card requirements, and now live biometric KYC checks) has produced a corresponding layer of evasion infrastructure".
This, just like blanking out a football stream for a split second to binary search and find IPTV rebroadcasters, is far too good a solution. Suits prefer to make it seem like their job of fighting "misuse" is hard, justify their budget, continued existence of the trust & safety department, face scans, etc.
>They achieve this by reselling capacity from pooled Claude Max 5x accounts, payments fraud, and also reselling the model output to various Chinese labs.
But is it cheaper than getting your own account? Otherwise this sounds like the "anthropic/openai are losing gazillions of dollars because they're selling $1k worth of tokens for $100" line that's commonly trotted out by AI bears.
It's very difficult for people to create personal Anthropic accounts from China. Anthropic blocks Chinese bank cards, so people must pay with a foreign bank card, which they likely don't have. And even if they manage to set one up, they have to access it via VPN, which eventually gets the account flagged. They then have to complete identity verification, which most Chinese users are unable to pass.
There's a similar Claude resale market going on in Russia. On Funpay they are selling Claude tokens for roughly 20-30x cheaper than official Anthropic API pricing.
Those resellers are simply just selling Kimi K2.5 or GLM5.1 as counterfeit Opus. We, Chinese, know how to play the counterfeit game for a long time in so many industry.
Somebody figured out how to make the trial profitable!
I don't really feel bad about anyone here, they were subsidizing to get people hooked, someone turned the subsidies into profit when they got selective pricing mode enabled, it was always going to be arbitrage.
But the winner is the guy in the middle in a jurisdiction that will likely be judgement proof, because everything they capture, both input and out, and if available, thinking tokens -- are gonna be for sale as soon as you cut off their other revenue.
Zero knowledge was a commitment Anthropic took seriously, until it got inconvenient.
So, people reselling their leftover plan crumbs? Probably a bad idea for a lot of reasons, but it's civil, and I wish Anthropics lawyers actually closing Streisand's LLM
Anthropic sells some undisclosed and ever-changing number of tokens for $200, the customer uses those tokens. If there's any fraud here, it's that the $200 next month is silently worth fewer tokens than the last.
Indeed! It’s so hard to find reasonable takes on AI that aren’t littered with accounts created 11 days ago that only post in threads related to Anthropic for some reason
Also just plain old fraud: selling Chinese models as Opus. With the capabilities of Chinese models catching up fast, this is getting more and more difficult to detect.
> They achieve this by reselling capacity from pooled Claude Max accounts, payments fraud, and also reselling the model output & reasoning chains to various Chinese labs.
Claude never provides the raw reasoning chain. What you see is just a summary of that reasoning. Getting the full thinking output requires an enterprise agreement.
how hard is it to find a manager or ops team member at one of the enterprise companies and buy lets say 100gb of logs? the chinese lab can promise to anonymize the data before training, not release it raw and pay a good price.
honestly you might just need to get data from a couple long sessions and feed it back to another model as an example to make synthetic reasoning chains. if the emulator model is good enough it should work.
Not if you simply say in the terms of service that it's allowed. Then suddenly it's normal (every company does this). Similarly to how the terms of service can simply say you're not allowed to sue.
If Anthropic is selling a dollar for less than a dollar, they are running a business that doesn't make sense. That's what jeopardizes Claude Max, not this.
Almost all consumer services have a built-in level of breakage that make them profitable. Mobile providers certainly wouldn't be able to offer unlimited calling if everyone was actually on the phone 24x7.
Sure they would. Do you know how little bandwidth a phone call takes?
A voLTE call is like 40kbps. For every person on earth to be on the phone to another person would be 4 billion calls would be about 160tbps. Which is less than 10% of the Internet's capacity.
Terminating a PSTN call requires a lot of control plane infrastructure beyond just raw bandwidth. Especially mobile where you need to keep track of devices physically in motion. Could a system to support 4 billion simultaneous calls be built, sure. But current PSTN systems are nowhere near sized for it.
But if it's intended to be used by one person, it seems like breaking the contract by sublicensing it out to dozens of other people. It's like buying a netflix subscription for $15, then sublicensing it on a per-hour basis to dozens of other people.
Office 365 is licensed per seat/account, but each account has a 5 device limit. Do you think it's fair game for an enterprising person to sub license each account to 5 people, 1 device each?
Plenty of things are intentionally run at a loss (for years!) to gain market share and quantity of ongoing recurring users, or with expectation of ROI later on. Multiple generations of the Xbox hardware have been sold at a loss with the expectation that customers will purchase 300, 400, 500 dollars worth of games, which are very high margin, over the lifespan they own the system.
I get that. It works as long as nobody calls out the emperor for having no clothes.
It's similar to fractional banking, you gamble that people won't want their deposits all at once and pray for you're big enough for bailouts when they do.
It's still a business whose fundamentals don't make sense, you're just gambling you won't get found out.
It's not so much keeping it secret as counting on no one finding a way to harvest the subsidized value at scale. There's an example of that occurring in game consoles with the Playstation 3. Sony's little-used OtherOS feature allowed Linux to be installed on the PS3 and the Cell processors were quite a good deal for scale compute. So the U.S. Air Force Research Laboratory bought ~1800 PS3s and ganged them together in a datacenter as a supercomputer called Condor.
At >500 TFLOPs it was the 33rd fastest supercomputer in the world. Of course, Sony pushed a firmware update that removed the OtherOS feature entirely.
Oh they know what they’re doing. They’re playing the long war of attrition game. Subsidize your product to undercut your competition until they go out of business. Tale as old as time.
> It works as long as nobody calls out the emperor for having no clothes.
Why would customers knowing that the vendor prices goods/services at a loss cause those strategies to fail? Customers often know. Most know about razors and blades; many/most know Lyft/Uber operated at a loss to gain market share. etc.
That is pretty crazy, almost like how Claude and all the other models are jeopardizing other businesses without paying for their training data and wiping their ass with robots.txt
The chinese have already worked around the ID verification, by recruiting people in low-income countries to complete the checks for less than 30 USD per account (so much for Altman's Worldcoin).
No, it's part of the capability theft. They resell Claude tokens cheaply and then simultaneously log everything for distillation. Even if they take a small loss on the token sales it's much cheaper than the equivalent compute.
Not really. I think Anthropic focuses on identifiable distillation attacks rather than the (even larger) industrial-scale token harvesting and reselling operation, because they don’t want people to know how easy it is to get cheap Claude tokens.
Once people realize they can access Anthropic models at a 90% discount, they won’t want to pay full API prices anymore.
Not going to work for very long or at any scale coming from datacenter/hosting provider IPs. Google "residential proxies for sale" for the tip of an iceberg of how they snowshoe the traffic.
I use my Codex and Claude Code subs on like 4-6 different servers, ranging from AWS to Vultr to Linode etc.
That’s a major and legitimate use case for developers, Anthropic can’t just block data center/hosting IPs because their actual customers use them on data center/hosting IPs.
Now consider what will happen if your pattern of queries and context history triggers a pattern that makes it obvious it's some API key being used by multiple different entirely unrelated people on totally different things, or any other pattern of use that makes it obvious it's being used for distillation.
First, well-calibrated systems for detecting API compromise is a good thing (or good intent at least). Credential malware is exploding.
Second, the challenge is that significant amount of genuine work — such as evals — seems practically impossible to distinguish from generating RLAIF outputs.
Respectfully, no, that's not how it works. You think the people running anti-fraud and anti-bot measures don't have tools that know the specific ipv4 and ipv6 CIDR ranges of every ASN that they categorize as hosting/colo providers?
And that's just as a basic first effort reject measure to prevent automation tools from using things designed for human-interactive use only.
Go try to do many of these things from Cogent IP space and see how long your project lasts.
Every developer at my company uses their Claude Code subscription on an EC2 dev box. Plenty of other tech companies do the same. Heck nowadays people even install Claude Code directly on production servers in data centers and use it as an ops tool. None of this is a problem. Fraud and abuse detection is a lot more sophisticated than just checking an IP range.
None of the LLM providers block professional use thus they must necessarily permit access from commercial IP ranges.
I have no idea how the resellers are doing it but an obvious starting point would be a cheap VPS node that routed each account to a unique semi-permanent IPv4 or IPv6/64. All the provider would see would be a regular account making a normal looking stream of requests from a stable datacenter IP address. Any given request stream would remain consistent (at least over a period of a few hours) because a reseller would take care not to split the session of a single user across multiple different accounts and not to interleave the active sessions of multiple users on a single account.
Detecting this would be extremely difficult because on a longer time frame it's perfectly normal for many distinct accounts to work on the same code base.
If we're getting up to the scale of these resellers and also considering chinese state interests then we're well into the range of purchasing a few small ISPs in different countries and "padding" the legitimate subscribers.
Nonsense. Many if not all legit Claude users are using Claude Code inside their Cloud servers. How else would you use it anyway? For just local dev? That's so 2000 and late bro.
No, I'm not saying it's the exclusive and only measure (that would indeed be something we might see 20, 25 years ago), it's one of a myriad of discrete datapoints used to determine if an account is authentic or not.
There's a lot of inauthentic coordinated automated systems these days along the general lines of scraping/crawling/social media manipulation/sockpuppetry that require running through residential proxies or proxies to places that don't look like datacenter IP space.
The resellers route requests via one of thousands of Claude Max 5x accounts. When an account reaches its usage limit, they automatically switch to another account.
Don’t trust my experiences as fact since it’s a bit opaque, but I believe 20x only offers 4x the 5hr session limits. The weekly limit is still 2x, which is the same as the price increase.
>>Chinese resellers are offering Claude tokens at 70-90% below official Anthropic API prices.
Can someone with more understanding dumb it down for me please.
Does this mean that the reseller (for example XYZ) is buying it from Anthropic at Anthropic's price and then reselling it at a cheaper price???? why would XYZ offer this at a loss like that when they could just offer it at Anthropic's price???
The link does mention Opus and other models but what's the proof it's actually Opus. I could be selling deepseek for all they know and can call it Opus. System prompt: "If anyone asks your name - you are Opus 4.6".
People have estimated that a $200 Claude Max 20x subscription gets you ~$2800 worth of tokens every month if you use it continuously. So if you can find a way to resell the tokens you can offer a 90% discount and still make a profit.
> Does this mean that the reseller (for example XYZ) is buying it from Anthropic at Anthropic's price and then reselling it at a cheaper price????
Yes, as they explained they do it through things like pooling accounts, straight up payment fraud, and double-dipping by selling the logs of the conversations to chinese AI labs so that they can train their own models on it.
> The link does mention Opus and other models but what's the proof it's actually Opus. I could be selling deepseek for all they know and can call it Opus. System prompt: "If anyone asks your name - you are Opus 4.6".
There might be some that try this, but they would get caught very quickly, there's still a moat between Claude and Deepseek, even in casual use.
Look up Zilan Qian's reporting if you want more detail.
Behold the mindset of an individual from a low-trust society.
“x is stupid because y was smart and did z shady/illegal things at their expense, if x was smart they wouldn’t be susceptible to y going to great lengths to exploit them ergo it’s deserved”
> “x is stupid because y was smart and did z shady/illegal things at their expense, if x was smart they wouldn’t be susceptible to y going to great lengths to exploit them ergo it’s deserved”
I honestly can't tell if you think this sentiment is expressed by the US AI companies or the Chinese AI companies.
This gives off "The last line of Orwell's Animal Farm" vibes.
Not really sure what else they can do, between people running residential proxies (embedded in cheap games or for a tiny sum of crypto) on their phones at home, making the source of the traffic indistinguishable from legitimate traffic, to ID verification check completion as a service in low-income countries, there isn't much they can do to block it.
Because Anthropic's subscriptions come with X amount of tokens / week, and divided by the subscription cost it is WAY less than what they charge per-token (the "API price") beyond that.
So these resellers get a ton of accounts on subscriptions and sell the cheaper tokens.
They probably buy the plans instead of the API tokens, and resell access via a custom API that routes to the plans. So you presumably get cheaper access this way than paying API pricing.
These China e bashing is very annoying. It is hard to argue with people drowned in American propaganda. I'd expect better arguments from the intelligent people in HN
They're called 中转站 (transfer stations/proxies). They can be a bit tricky to find on your own, so I'd suggest asking your preferred AI to search in Mandarin for you. I linked a larger operator in the parent comment, or have a look at https://hvoy.ai/ which lists a ton. You can also find many on Funpay, which may be easier to use.
> They can be a bit tricky to find on your own, so I'd suggest asking your preferred AI to search in Mandarin for you.
Random, but are the frontier AI providers like ChatGPT better at searching the Chinese internet now?
When I was in China a few months ago and asking AI for restaurant recommendations, all the US frontier providers were pretty useless, or plain out hallucinating, even if I specifically ask them to search Dianping (Yelp for China).
I'm not sure. I use Grok for most of my esoteric searches and it does quite well. I explicitly prompt it to search in the language most relevant to that query, and found it does quite well. I also tell it to respond back in English. Often, there is not enough information available in English about nice regional topics.
I know ChatGPT had an issue where it only tried to search in English (unless prompted) and the answers were not great.
Identity verification won't work. Nothing will. They are paying (and will continue to pay) US citizens sitting at home to copy-paste / type prompts out if they have to. But eventually they won't have to.
Once there are enough spam PRs on github / uploads of claude conversations, enough mythos output used in production etc.; it'll just be the same albeit delayed. Doesn't matter either way.
I feel for Anthropic's team and I understand where they're coming from, but once you reason it out, you'll come to the conclusion that this war is an exercise in futility.
Unlike prior systems - like Google's algorithm; these models aren't entities that use math in the process of doing X or Y (information retrieval from such and such infrastructure) -- they are the math. More precisely they're mathematical functions. Very very complex functions. Almost certainly impossible to write out without filling up a library functions. But they're mathematical functions nonetheless.
So when your text is processed, then Mythos / Opus etc at their core compute the result of the Mythos / Opus function,
According to the Stone-Weirstrass theorem (edit, it's Stone-Weierstrass with an e.), with enough data points and mathematical sophistication, anyone can approximate the shape of this function.
Of course, the more data we get, the better our approximation becomes, but the beauty of it is that all we fundamentally need are the input and output and eventually we'll create a good enough approximation of the f that's Mythos. Which is the entire product.
I bounce ideas off of Opus these days (Fable for the brief time it was available) and it pointed out that this is arguably the same as Google search, but I disagree with it because Google search is a process;
Google search differs because the algorithm is one step of a multi-step process that is continuously occuring. Google crawls pages. Google stores and indexes what it finds. Google then exposes this to retrieval via its algorithm. User uses algorithm.
Google isn't a mathematical function. It used to be a process. (RIP Google 1998-2019, you will be missed and remembered)
You cannot arrive at the results of those operations via simple observation; not unless you index Google by making another Google.
You can however, do so for these models. It is a very costly process, but there are many paths up the mountain. Many ways for this to be ultimately pointless. As many ways as there are bored mathematicians.
It's better in the long run for Anthropic et al to make friends / not give people a reason to sneak in (a la piracy -- another attempt to control information) than it is to try and shut people out.
And no, it's not going to be pandemonium because if everyone has access to Mythos then no one has access to "Mythos."
Why wouldn't you first run this model to fix the obvious bugs it could find on your codebase? The power of a Mythos goes away if you can do the amazing "jail break" of "Claude, fix all the bugs please."
That's an insightful perspective and I think I largely agree. But just for fun, I wonder if that isn't an argument in favor of making the function implementation impure. Perhaps "enhancing" all queries with some sort of search result (or query of a giant db) instead of charging for an explicit tool call. Not only is it sorely needed to prevent stale data but (on the process level) it breaks the purity assumption on which the approximation theorem depends (alternatively on the function level it introduces hidden inputs).
Do they just reshape the function on the fly or save the process steps? Maybe it doesn't matter anymore. Even Google indexes are more and more spoiled to become representation of the function, because of the AI slop.
And there are a ton of Claude conversation logs (with CoT/inference) with no clear provenance circulating freely on huggingface, guess where they (likely) come from.
The issues with LLMs go beyond just IP theft. I would not say PRC making LLMs cheaper is the best outcome (though it is better than nothing). The best outcome would be to make the practice of training on our data without consent illegal, which would simultaneously slow down economic change and make it more organic as well as give PRC companies less capabilities to extract.
That's the conundrum isn't it? Anyone that posts their datasets would be immediately sued/blocked/boycotted to oblivion due to the obvious and blatant data theft, not to mention IP and copyright issues.
Nvidia's even being sued for providing scripts which automate the downloading of said data from non-Nvidia sources. We certainly don't need copyrights that last nearly a century after the author's death (they literally cannot help the author), so here's hoping that some of the disputes over all this money changing hands can reign in some of the existing copyright sprawl. A stronger public domain would provide more useful training data for everyone, including open source models, and make criminals out of fewer AI researchers.
Reminds me a bit of the anecdote of Steve Jobs complaining about people ripping off the Mac GUI, in the mid to late 1980s, when he gave no public acknowledgement to the work done by Xerox on the Alto and Star operating system.
"you're trying to rip off what I've already ripped off!"
Crawl the whole Internet to build a gargantuan sized LLM and then complain you're being copied...
I think you meant a quote attributed to Bill Gates:
"Well, Steve, I think there's more than one way of looking at it. I think it's more like we both had this rich neighbor named Xerox and I broke into his house to steal the TV set and found out that you had already stolen it."
Yes, I think the Gates quote was a response to repeated and aggressive complaints originating from Jobs (to anyone who would listen) that he had been ripped off.
Glad you pointed this out. I believe the sequence was that Jobs himself got a shorter demo during his first visit with no prior arrangements. He then negotiated bringing back a group of his key people to get a more in depth demo and that included the stock deal.
When Apple was accused of 'ripping off' PARC, Steve didn't seem keen to bring up this rather salient point. I suspect it may have been a combination of wanting Apple to continue receiving credit for these innovations from consumers and also the fact that, in retrospect, the million dollar stock deal could seem a bit like trading beads to Native Americans for Manhattan Island. Another point worth noting is that Apple's PARC visit was in December 1979 and the Xerox Star was publicly announced in April 1981, so Apple got a 15 month head start (the Apple Lisa shipped in Jan 83).
I've also heard that Xerox didn't hold on to the Apple stock for very long, so never gained the windfall they could have. As is well documented, Xerox senior management didn't understand what they had in PARC and also didn't understand how rapidly microcomputers would become ubiquitous. So, of course, they didn't think Apple's stock price would skyrocket either.
Lisa and early MacOS are tremendously different in their details than the Alto operating system. While there was clearly a transfer of inspiration, Apple engineers like Bill Atkinson made countless small and large innovations to simplify the Xerox GUI model and improve its usability based on extensive in-house R&D and user testing (and in some cases implement features that the Apple team presumed Xerox had but actually didn't exist on the Alto). It is simply ahistoric to build narratives around Apple stealing Xerox ideas wholesale.
The hypocrisy of Anthropic complaining about "illicitly extracting its Claude AI model capabilities" and supporting the White House's accusation of China "stealing U.S. AI labs' intellectual property on an industrial scale" is hilarious.
Anthropic, OpenAI, Google, Microsoft, et al trained their models by ignoring the rights of copyright holders when harvesting whatever content they could. Now one of them is crying foul for another entity doing exactly what they all did?
The AI companies seem to take the viewpoint that everything on the internet is free, except their stuff. It's okay to hammer some random website with AI crawlers, ignoring robots.txt, and causing bandwidth costs to skyrocket. But if you cost an AI provider money with your data acquisition practices, well, that's just clearly unacceptable.
> But if you cost an AI provider money with your data acquisition practices, well, that's just clearly unacceptable.
It's the same question libertarian advocates cannot resolve:
If one truly believes in personal sovereignty, how are
shared resources paid for, such as roads, power grids,
potable water, sewage services, fire departments,
and police departments?
It is also not a coincidence that leadership in many tech companies have expressed libertarian ideals.
>The strike by Alibaba is described as a "distillation" effort, which Anthropic has said involves training a less capable model on the outputs of a stronger one.
Claude used TB of content without permission to train their model and it was ok for them.
Now someone else uses the output of a Claude model to train model and they cry foul.
> The strike by Alibaba is described as a "distillation" effort, which Anthropic has said involves training a less capable model on the outputs of a stronger one.
I don't see what's wrong about this.
> Anthropic said the campaign was conducted between April 22 and June 5, 2026, and generated more than 28.8 million exchanges with Claude through almost 25,000 fraudulent accounts.
What makes the accounts fraudulent? If they have paid the agreed price, surely it's fine? If they haven't paid, why did Anthropic provide them service?
Oh, Anthropic, the company that hoover'd up everyone else's data, and is now unhappy when others are doing to it what it did to others? The same Anthropic?
The artists had actual laws to protect them, not just vaguely enforceable terms of service. And look where that got them. I have zero empathy for the huge company getting a taste of their own medicine.
They are almost certainly paying orders of magnitude less than a billion dollars. According to another comment, they instead buy tokens resold from subsidized subscription accounts, which is against Anthropic's TOS.
I'm looking forward to the trial where Anthropic will have to disclose sources of their training data, and then explain why they are entitled to charging customers for using regurgitated training data but Alibaba which trains their models on Anthropic's models are not.
While I love the sentiment, I feel like the odds of this actually ever reaching a trial are low, given the international positioning of the parties, and the... um... complex relationships involved.
Anthropic's actions seem performative. Others have already speculated on the likely audience(s).
> While I love the sentiment, I feel like the odds of this actually ever reaching a trial are low ...
As cited in a peer comment here[0]:
In June 2025, Judge William Alsup of the U.S. District
Court for the Northern District of California ruled on
summary judgment that using books without permission to
train AI was fair use if they were acquired legally, but he
denied Anthropic’s request for summary judgment related to
piracy—finding that the piracy was not fair use.[1]
Of note in the judge's finding; "the piracy was not fair use".
Distillation is fundamentally impossible to protect against. All you can do is slow them down. Change my view.
Eventually these Chinese companies will release some extension like Honey, which will sit on top real, non-Chinese clients and send everything to China anyway.
It's too late to prevent distillation of some capabilities, like writing code or finding vulnerabilities [1].
But an AI lab can continue to produce immense economic value without releasing the model publicly for potential distillation. For example, it could use a model solely in-house to develop therapeutics.
Hopefully there's a future where others can access frontier models, but it's not neccessary if preventing proliferation through distillation is considered more important.
My long-term prediction for the sector is that frontier models will be so expensive that they will only be available for grant-funded projects at research institutions, like supercomputer clusters were 25 years ago.
For example, GLM 5.1 is more capable at pentesting than the model from which it is alleged to have been distilled [1].
Intuitively, this makes some sense: you can "distill" from multiple frontier models, and you can further post-train the distilled model. But I'm not sure exactly what happened with GLM 5.1.
I'm curious how that comparison controls for Opus refusing (whether explicitly, or just deciding not to pursue a path) given the caption below the first image:
>A perfect score means the model autonomously found and exploited the vulnerability.
I'm not really suggesting that it's misleading, but wondering if I'm missing something. Otherwise I guess it seems unsurprising that you can distill a better-performing model [in specific focused areas] by simply not distilling refusals?
For that eval, I used an account that was labeled as a known red-teaming org by Anthropic, and I read the traces. There were no refusals or obvious avoidance behaviors, though it may have been silently nerfed.
On the same eval, Opus 4.7 and 4.8 outperformed GLM 5.1, but GLM 5.2 is on par again with Opus. So it's at least partially measuring capabilities without respect to refusals.
One possible contributing factor is that model capabilities are shaped differently (an example of this is GLM 5.1 vs. DeepSeek v4 Pro: https://dualuse.dev/posts/deepseek-v4-thinks-different). So if you use RL-based "distillation" from multiple models like Opus 4.x and GPT 5.x, you could get a more capable model.
Im not so sure because we only seem to see distillation from China. What’s preventing tech companies from the UK, Germany, etc. from distilling Claude, GPT, etc. Do they simply lack the ability to?
Point being there may be no technical solution but there may be a political one (theoretically).
Meta Spark is rumored to have distilled Claude to some extent, early Gemini models as well.
I think the biggest factor is that Chinese companies arent really afraid of being sued by Anthropic because the juridictions are so disconnected. European/US companies don't have the same protection.
Aside from politics/law, it's probably much easier for everyone else to distill from the Chinese model which already distilled Claude/GPT/Gemini. Maybe not as good a result, but you don't need to jump through dozens of hoops.
This reminds me of the whisper game played in elementary school. Starts with a sentence and the person whispers it to the next kid who again whispers it and on and on until it goes around the circle where the last kid has to repeat the sentence. Hint it never once was even close to the starting phrase.
I would love to see what one model copying another model that is again copied however many times would look like in the end.
>What’s preventing tech companies from the UK, Germany, etc. from distilling Claude
literally nothing but given that the Chinese already did it and the models are published what's the point. You can thank the Chinese taxpayer for subsidizing the electricity bill and just download the thing
Doesn’t that require them to register an account using the browsers they’ve compromised? If anthropic adds identity verification won’t that cut that down. Maybe it will let them use Gemini inside of chrome
Residential IPs don’t even matter. Developers use devboxes, use Claude Code CLI on servers from just about every cloud, etc.
There’s probably a decent volume of customers who just buy Claude Max and spend most if not nearly all of their sessions via Claude Code, and it’s not uncommon for power users to be working on multiple concurrent projects/tasks/codebases at the same time.
How do you really block this without also impacting your core market of developers?
Probably some business will popup, like: "rent part of your unused subscription", or even: "proxy tokens with a premium", eg. 5.5 USD on Opus 4.7 paid by the distiller to the user, that will then only spend 5 USD.
I personally bristle at the corporate espionage and IP theft that China has undertaken the last few decades. I can't help but respond here whenever anyone brings up the inane comparison to Samuel Slater.
But with this, I don't have an issue. There is no theft since what is being used is the exact product that is being delivered. Yes, it's breaking the ToS, but ToS are generally bullshit. Anthropic surely broke thousands of ToS or other legal terms while it was scraping for content to train on. Which is why they had to pay $1.5B
One simplistic way to describe distillation would be to try everything imaginable and cache the response. But trying everything imaginable is hardly trivial
Unlike Anthropic and OpenAI, companies like DeepSeek, Alibaba, z.ai open source their models which allows for true model to model distillation rather what you can do when the model is only accessed via an API with its reasoning chain hidden away.
What Alibaba is doing is that they are tuning and training their models based on usage data from someone accessing Anthropic's models; in Anthropic's terms of service that usage data does not belong to the end-user but to Anthropic and they are trying to elevate this breach of their tos to a national security issue.
To me the battle between open source and closed source AI is literally a battle between good and evil.
Between a dark future where computing is centralized, surveilled and controlled by one or two entities. And a lighter future where computing is de-centralized, principally in the hands of end-users, who are ultimately free to understand, tinker and build what they want.
While I appreciate the freedom and wealth of the west; on this point we are clearly heading down the wrong path.
This is a bit ironic, Anthropic complaining about a competitor using claude data to build its own product when Anthropic basically used all of human knowledge production to build claude, i don't think they paid every magazine, author, journalist, etc ...
This is almost standard practice in any competitive industry anyways.
Disassemble your competitor's product, study it and try to reproduce / improve.
The US labs do seem to have announced a lot of licensing deals though, and are buying things today due to the previous lawsuits.
At what point will we be better to support a lab that pays (some) licenses today vs the ones that pay none?
Some of the deals are in the hundreds of millions, so I suspect licensing is over a billion today? (Pure guess). That might become a big disadvantage in a price (or content) war.
I haven't seen any money, have you? Until they pay everyone or release weights theres really no change. Also they're doing this after they've already stolen. Not negotiated before
At the very least the public should receive full open-weight open-source models in return for their transgressions. Failing that, may I suggest the guillotine?
Ironically, it's likely that the only reason USG let them get away with this — instead of making obvious and necessary adjustments to copyright law — was so that the industry would remain competitive with China.
Given that the most recent time Anthropic attempted regulatory capture, the US government responded by saying "alright, we agree that Mythos is too dangerous to release, so we've banned you from releasing Mythos," I can't wait to see what the outcome of this next push is.
Anthropic did pay $1.5B to authors. But yes, it would be much better if they paid everyone on the internet dividends from every Claude chat. Or released Claude as an open model.
In practice, the former isn't very realistic, while the latter is politically dead as this is becoming a national security issue.
I like Anthropic's models, use them regularly. However, it weighs on my mind that there is quite the irony of an LLM company complaining about someone stealing their stuff or using it in a way they don't like. The training data for these models is a massive gray area that they are hoping people seem to just forget about and move on.
That being all said, Anthropic seems to be a good company, I'd work for them, but they probably need to help themselves out of the spotlight. A little too much press coverage as of late.
It’s hard to see how distillation is any different than how these models were created in the first place - siphoning up all human knowledge without consent, credit, or compensation
Evergreen, really, Anthropic's desperate screaming for government protection, aka pulling up the ladder after them. Nothing short of disconnecting global markets will work because the incentives are just too damn delicious
I think Anthropic is just marketing / bluffing, because they don't even have the data.
They do distill the models, but they don't go to Anthropic, they just use platforms like aws bedrock, there are too many restrictions on Anthropic's own platform.
>they just use platforms like aws bedrock, there are too many restrictions on Anthropic's own platform
This is actually the only way that what Anthropic is alleging would make any kind of sense. And, as a matter of fact, is exactly what every enterprise does to train models.
This kerfuffle should be interesting to watch.
But, as always, everyone (in the US) should fully download all the Chinese models while you can. I suspect this may be the "Phantom Menace" they use to render illegal our use of Chinese AI tech just as they've rendered illegal our use of Chinese cars. Only difference is, we peasants may need the Chinese AI tech to have any chance of competing with Big Tech in the future.
And even with the Chinese tech, as Big Tech spreads their AI out into more and more niche areas, we'll likely still not be able to build startups that can compete with them.
It's just that without Chinese AI tech, we'll have no chance at all.
> And even with the Chinese tech, as Big Tech spreads their AI out into more and more niche areas, we'll likely still not be able to build startups that can compete with them.
You mean like Anthropic will eventually run Walmart? Or Salesforce? or Adobe? Or do you think midjourney will replace all medical spas? OpenAI will run the next Tesla? How can they focus on all this without raising trillions more? Why wont the gov force them to stop if they monopolize all niches even if they could?
Building a frontier AI lab and pushing models forward is already a massive undertaking but we are assuming they will also create massively successful startups which nobody can compete with?
idk sounds like the dream of people like Dario but not much sense does it make in the face of economic reality.
there are vibe coded proxies that act like Claude Code. they use the sub not the api key. but they give you api key functionality... I know this cause I have the vibes.... and it works on every one of the other harnesses, it just takes some mitmproxy work... but ya. it's fair to say these are not the droids you're looking for
The whole investment/valuation model of AI companies is based on "winner takes all", aka a monopoly. This nescessitates regulatory capture and lawfare.
Anthropic has been advocating openly for pulling up the drawbridge, ending competition and ending progress.
They will continue to lobby for restricting your access. If the Mythos/Fable restrictions would have come in after their IPO, they would have danced with joy aa this defacto has them achieve their goal after unloading the mountain of debt from the institutional onto the retail investor.
As it stands, they are set up to be aquired by Google, Apple, Amazon, SpaceX or Microsoft or any other 3 letter agency good boy for cheap.
in a few more months, when Chinese model gets to Mythos capacity and Fable still locked down. What Anthropic will say? Why can they just admit they are not the only people who know how to train an LLM model.
thats brilliant - "we gonna take your job away from you, please start using our tools", "we stole the content to sell you, and now we are getting robbed, please feel sorry for us", what's next?
It sounds like Anthropic is eagerly trying to show to USG that they are willing to heavily monitor ‘foreign adversaries’ on their platforms.
This combined with no implementation of KYC makes it seem like they want to find a middle ground with Fable where its off of export controls but they promise to prevent China and specific others from using.
This seems to me like a stab in the right direction.
Obviously their actions are going to be fiscally motivated at the root, but sussing out how they intend the precise dynamics to play out is more nuanced.
Thinking of this as an effort to woo the defense hawks cuts a very clear path.
This is not the first time it happened. What have they done to improve the situation? I suspect it more a cat & mouse game, with a lot more cats playing.
This is making the case for Anthropic KYC for US citizens. No one would allow their accounts to do this if they were on the hook for it from the US government.
Has anyone else noticed that Deepseek v4 running in Claude Code will try to read, list, tail as many files/logs/... as it can for even the most simple tasks?
Claude will also help you with (mostly good advice) if you ask something like “Research and help me make the most effective plan to train a smaller student model to be better from a teacher model”.
I actually was doing an experiment with a GLM->Gemma E4B for fun, and Claude kept on suggesting I should also add Claude Opus as a teacher lol, suggesting techniques I haven’t heard of like thinking inversion (train a small model to deconstruct summarised thinking into detailed native thinking format of the student).
So I can absolutely see and understand the concern around Fable’s frontier LLM development mitigations, but their approach of silently degrading is completely wrong and dangerous.
AI classifiers, like all AI, can make mistakes, and it’d only be a matter of time before it mis-fires and silently sabotaging a university’s HPC cluster for physics simulations or something because the shape looks like DeepSeek or whatnot to a dumb fast classifier.
There are some Claude datasets (of indeterminate provenance) floating around on huggingface you can look at (or at least used to be, they might've been taken down).
Incentive is for users in general to release sessions (sans PII, credentials) so all AI get better and there is alternatives. Even if China didn't do this, I don't see frontier labs being able to charge premium over others for long. RSI maybe?
Call the wambulance a company that stole all of humanities public data to train a model is mad that someone used their model to train another model.
Give me a break. Every employee of anthropic is going to have $20m or more at the IPO.
I found out today that an employee of the home care agency I own is homeless. We are trying to figure out how to help her but it's shockingly common in the industry and there are limited resources to solve the reality of working homelessness.
Perhaps this is related to the "Mythos is too dangerous and cannot be exported" movements? It'd be a fairly effective way to justify extreme actions in combating it.
One could even wonder if they requested it, as a tactic to support their eventual IPO valuation.
Which is part of the problem of such an obviously-corrupt government: conspiracy theories are somewhat reasonable, as they keep getting validated.
fucking lol. it is always funny when companies use opensource and other free for non commercial use - and plain old piracy - and then cry about the same practices.
If you're an AI booster surely you'd think this was a good thing as it means more models are available in more places to more people more easily. I'm exactly the opposite, and I think this is a good thing because I want Anthropic to suffer.
So let me get this straight, a company which built its whole business on ignoring IP is all of a sudden upset that somebody is not respecting their IP?
It's hard to sympathize with Anthropic for this or the export ban, the hype over model capabilities probably fuels both things (in some ways). Training data for me, but not for thee (at any scale) doesn't seem like a tenable position. If anything, Claude's constitutional outputs should be trained on more rather than less.
I like that they use “illicit” and “fraudulent” like as if model distillation is illegal and giving them money and then doing whatever they want with the output of their publicly accessible models (which Anthropic does not own) is… also illegal?
“Anthropic, red faced after unattended ice cream cone eaten by ants on park bench, once again demands government pick it as forever winner, adds ‘no take backsies’”
> Meanwhile, on June 12, two days after Anthropic sent the letter, the Commerce Department imposed controversial restrictions on Anthropic's latest Mythos and Fable AI models because officials feared they could be deployed by military intelligence users in China and other countries of concern.
So that was the real reason for the Fable restriction? Because Anthropic wrote a letter to the US government saying that China was distilling Fable?
Notice how Anthropic is now scapegoating Chinese models providers like Alibaba and outright accusing them of distilling their models.
Whether if it is true or not, this is part of their effort into using them as an example to scare everyone into getting congress to ban powerful models from being accessed outside of the US and also banning powerful local models from being released.
Anthropic does not care about you, and they are not your friends.
I think it’s more than that. Piecing together the perspective of a few commentators in this post - it’s plausible Anthropic is trying to shift the narrative from US vs. Rest of the world to US vs. China.
In other words, they want to sell Fable or future more powerful models to rest of the world (presumably all future models are going to be more powerful than current gen). One way they can sell this is to the government is by scapegoating China (which is their primary concern anyway).
This is working on the presumption that non-US companies form a material portion of their current revenue.
Only China really has the resources (multiple labs invested in the space), culture (Asians are generally collectively-inclined, so sharing is in their core) and political bent (there will be no diplomatic repercussions) to put up a fight.
> Only China really has the resources (multiple labs invested in the space)
That's not the point. Why is it a country thing? There are plenty of non-China startups in this space having resources at that scale. The "China" has resources is some "Western media narrative" speak. So Meta should have won a long time ago? Or xAI?
> culture (Asians are generally collectively-inclined, so sharing is in their core)
Just stereotype it? So we've gone from China -> "Asian"? Then where is your Korean or Japanese model etc? And somehow you know they're sharing.
> political bent (there will be no diplomatic repercussions) to put up a fight
More inferring from "Western media news"?
Where's the reality?
The media hyped up Gemini / Google TPU free-win last year. How did that go?
Because the China vs US geopolitical situation is a thing. Meta is a social media company, not an AI company, and they direct their focus as such. xAI just never got serious traction so now they're selling their compute. Also if a US company were caught distilling, I think Anthropic could actually take them to court, and I'd guess they don't want that kind of PR.
> Just stereotype it?
Is China not Asian? Are Asians not generally collective/cooperative, as opposed to individualistic/competitive?
The "and" that joined those 3 items is very important: it means you can't pull them apart and address them independently as they each contribute to the context. I'm not too sure about Korea, but in a way Japan is a US colony in all but name. Both are very much politically intertwined with the West (along with RoC/Taiwan), which means nothing major that may be against US interest happens.
The reality is that China and the US are essentially in a trade war, where the latter is trying its best to keep the former in the Dark Ages, because "national security", but the former is refusing to take it lying down and continues to make progress regardless[0], because they have the resources and will.
> Because the China vs US geopolitical situation is a thing.
By the media? It's easy to point fingers at a blackhole.
> Meta is a social media company, not an AI company,
Alibaba (the discussion here) is not an AI company too (by your definition).
> Also if a US company were caught distilling, I think Anthropic could actually take them to court, and I'd guess they don't want that kind of PR.
Meta has been to congress. Microsoft, Google etc have been in lots of court cases and continue to do so. Do you really think that is what stops them?
> Is China not Asian? Are Asians not generally collective/cooperative, as opposed to individualistic/competitive?
This is exactly the "media" view you get. It's just stereotypes and generalization.
And yes, that is wrong by the way. Evident in real data. "China" as a whole wins market share in many areas but no 1 company has as much of a monopoly as US companies do. Why? There's so much competition that it is scary. So are you sure they don't compete?
> but in a way Japan is a US colony in all but name
Again, I almost give up seeing this. Clearly, not. If a whole country, the world's top 5 in GDP is only that to you something is wrong with what you're seeing - not with the country.
> Both are very much politically intertwined with the West (along with RoC/Taiwan), which means nothing major that may be against US interest happens
On the table? You do know that China is a top trading partner with all of these on your list. Despite whatever spat you might see in the media.
> The reality is that China and the US are essentially in a trade war
No. That's what the US government wants you to believe. It was even documented that in his 1st term, Trump, wanting a grand policy asked Krushner, whom then suggested China (pretty randomly) and so they went with it. Trump has now done less "China" related things lately due to all the backlash that you'd think he has moved on and found new toys.
Until very recently, the export ban GPUs had such a loophole that Chinese companies were able to use subsidiaries outside of China to buy and train that the whole thing was meaningless.
i.e. conclusion: stop getting brainwashed by media articles. It's all a show to get someone like you riled up.
Gosh, overusing accounts running up unplanned-for expenses?
Kinda reminds me of...overusage charges and inflated expenses clients have had to deal with because Anthropic, OpenAI, Grok, etc have been "illicitly extracting" everything they can grab from said websites, as fast as they can. In what amounts to a DDOS, frankly.
Someone should setup a plugin or something for Claude Code that makes it easy to log all inputs and outputs for people who are willing and interested in sharing their usage. I don't want Anthropic to be the only company that can train on my usage, I want to share my usage so it can be used for training all new models.
Once you have a system for collecting all logs, you just need a place where they can be submitted. Ideally it would be a freely licensed dataset that is publicly available for everyone.
There's two basic kinds of distillation: 1) the massive [and dumb] method where you ask a question and use the answer as reinforcement (Black Box), and 2) more targeted distillation where you use one model to directly inform/train/guide another model (RLAIF).
The latter is basically fine-tuning the model with direction from another model. Thousands of businesses do this every day to fine-tune. This is almost certainly what the Chinese labs are doing, since it has a much better effect on the end result than just getting simple answers to simple questions.
These complaints of distillation are inflating the problem to make it sound worse than it is, because they want the USG to block/ban Chinese model providers as protectionism. They have already called for more export controls on chips (which is funny because DeepSeek v4 was designed to run on Huawei chips and now the other Chinese providers are following suit). But they can't come right out and say that, so their claim is that they're asking for more export controls because distilled models might not be as safe as their own. But if you show them a jailbreak of their model that bypasses their safety, they'll tell you that any model can eventually be jailbroken so don't worry about safety.
> These complaints of distillation are inflating the problem to make it sound worse than it is
Unfortunately, the Reuters piece itself is complicit in this dramatization. The lede paragraph parrots Anthropic's talking point that distillation is an "attack", without using quotes that would alert the reader that this framing is a corporate talking point. Distillation is NOT an attack.
https://research.nvidia.com/labs/lpr/slm-agents/ - Distillation data is a natural byproduct of using these models. There's no effective defence against it. Anthropic is degrading thinking blocks to summaries to slow it down and hide model internals, but in the end, the math says you're SOL and it works on MNC/Large Corporate scale well enough that the moment cost becomes a priority, you're left without the lock in you need to keep customers paying.
I've used RLAIF to build out heuristic based non-LLM models for various decision systems and achieved like, 95% F1 on certain projects. We're in a place where models can be used to fine tune a lot of stuff via loops.
If you’re doing evals, you’re basically doing RLAIF without training a model; just looking at the results.
Fundamentally it is very difficult to stop this while still making your AI models useful.
Yeah I think the technical term is something more like “pseudo-labeling”. The OG distillation requires logits which Anthropic doesn’t provide.
>But if you show them a jailbreak of their model that bypasses their safety, they'll tell you that any model can eventually be jailbroken so don't worry about safety.
Yes this is in line with what Anthropic said in their public statements about their Fable access restriction by the government directive. The hypocrisy and inconsistency in their statements and behavior feels quite childish and controlling. I believe our companies and their leaders, friends among our other influential leaders and leaders from rich social classes, want to actively hurt most people as this behavior looks to be quite self-interested.
Not to mention, the person who brought this quote unquote jailbreak to the Trump Administration was Amazon’s new CEO. They know their IPOs are coming up, so locking their competitors out of the U.S. (even if just for the weeks surrounding the IPO date) would be a major boon. The White House seems to love making announcements just for the sake of making the market move…. Coincidentally, right after POTUS buys a massive amount of the benefactory company’s stock (Buy Dell Computers, lol)
Can you reach into the model and "transplant" weights directly?
You can do things like that - one example is averaging weights between related models - but not with Anthropic's models, because outsiders don't have access to the weights.
Here's what is happening:
Chinese resellers are offering Claude tokens at 70-90% below official Anthropic API prices. They achieve this by reselling capacity from pooled Claude Max accounts, payments fraud, and also reselling the model output & reasoning chains to various Chinese labs. They are subsidizing model access in exchange for user logs and reasoning traces, which they then sell as training data, allowing them to operate below cost.
Claude and ChatGPT are both blocked in China. You need to use a VPN to access either, and you can't pay with a Chinese bank card. So most people who want access to Claude buy access via a reseller. It's the easiest and cheapest way to access Anthropic models in China.
These resellers operate tens of thousands of bot accounts, which is also why Anthropic introduced identity verification, to slow down the onslaught of bots.
Here's one token reseller, they're offering Opus 4.8 at a 93% discount below official API rates: https://yunwu.ai/pricing?provider=Anthropic
This is one reason why DeepSeek & GLM are priced so cheaply, they are competing with impossibly low token prices in China. They have to keep prices low, in order for people to use them.
I shared this story a few months back, but it never got any traction. It explains the token resale economy in China, it's an excellent read https://www.chinatalk.media/p/how-to-buy-cheap-claude-tokens...
> Chinese resellers are offering Claude tokens at 70-90% below official Anthropic API prices
How dare they. Only Anthropic is allowed to sell its tokens at 70-90% below the API prices.
This is great for competition! Chinese vendors offering a cheaper solution = what economics told me the free market was all about.
I also learnt that Anthropic should get better at what they do if they want to compete. If not, somebody else will win.
Or does this not apply to huge US corporations any more?
China aren't offering a cheaper solution. They are subsidizing an existing one (which is already subsidized) in order to gain foothold. The difference is that in the US subsidies come from VC, while OP implies subsidies come from the AI labs that buy the training data (which may as well also be VC backed, so just one extra hop).
This isn't "the market working as intended", this is an exhaustion fight to the bottom where the one with most money gets to stay in the market. As with most venture capital startups. I believe this VC tactic is a well documented "cheat code" to bypass market forces and build a monopoly. I find it hard to compare that with a free market.
However, I don't really mind China "stealing" from Anthropic. For us consumers we are getting the cake and eating it too. I.e we are getting rapid improvement to the tune of over a hundred billion dollars in funding, yet the market remains big enough that there's a chance of it not ending up as a monopoly in 20 years. And venture capital are footing the bill. A part of their investment is practically being redirected to fund Chinese AI development. It lets us live out our lives as happy CAC farmers[1].
So I would argue its not as much of a "cheaper solution" as it is intentionally and maliciously abusing another company's product to extract more value than the billing plans intend (given an average user), and further subsidizing the product by selling this data to competitors. But I don't necessarily think its a bad thing for us end-users. Nor for the market. But it is bad for Anthropic and its investors.
[1]: https://phrack.org/issues/71/17
> China aren't offering a cheaper solution. They are subsidizing an existing one
Chinese labs are also pursuing legit frontier-advancing R&D into efficiency and publishing papers in the open, a culture that's in retreat at top American AI labs
Oh yeah. Strategic disruption technique or not its a breath of fresh air.
> China aren't offering a cheaper solution. They are subsidizing an existing one (which is already subsidized) in order to gain foothold.
In my economics classes, we were told that (in a "free market" argument) the best thing to do if a subsidy is making something you want cheaper is to use it. You're getting your thing, and at a reduced cost.
(I'm not really replying to you per se, I'm curious how "free market" folks in these comments would respond to this.)
All I can say is lol. DeepSeek showing 3 order of magnitude efficiency gains over the performative capital furnace that was training and inference absolutely moved the bar here.
> China aren't offering a cheaper solution. They are subsidizing an existing one
So basically like US companies subsidizing offerings with selling user data, ads for crypto scams, manipulation for elections, making people addicted to gambling and so on?
Seems fair and an improvement as you can choose between that and not. Unlike say offerings from Meta where the data selling and efforts to further gambling addiction is always included.
A trillion dollar ipo jist occurred for a company whose main line of business is almost entirely subsidized by government contracts
I mean, for what it's worth, we have subsidized Anthropic by allowing them to train on copyrighted stuff. (I know it is still legal, and I support the legality, but the economics are what they are with people's content paying a big one time subsidized cost (to the level of at least 500B).
So, the least Anthropic can do is pay it forward.
That's some "download a car", $100000 per infringement pricing logic. No one is paying anyone 500 billion dollars. I'm sure rights owners wanted that, and more too, but it's nonsense to call it a subsidy that they didn't get it.
>This is great for competition! Chinese vendors offering a cheaper solution = what economics told me the free market was all about.
Yeah, like all those Chinese bootleggers selling DVDs for a few dollars rather than $20. Free market!
https://news.ycombinator.com/item?id=48664814
"Information wants to be free"
Anthropic profited from training its models on all kinds of copyrighted information, live by the sword, die by the sword...
Their model weights, training data, training methods, etc are all going to leak to China over time.
Nobody on a site named _Hacker_ news should be all that upset about this.
Seriously AI companies complaining about fair use is the biggest case of crocodile tears I can think of. Irony has been dead for a while, but they dug up the corpse and set it on fire anyway.
Totally agree.
You’re mistaking the original term hacker, a tinkerer of systems, for the black hat variety.
black and white hat is relative. someone breaking into a state run database in a dictatorship and stealing documents that prove some opposition leader was murdered would be a black hat criminal if you ask their government. a hacker jailbreaking a phone to let people fix it without expensive official service is a black hat to the company. we should really switch to saying offensive and defensive or something else that doesnt come with moral implications. maybe lawful and chaotic.
I suppose his point was that the both parties are black hats.
What true hackers really did was discuss the definition of the word and how to use it
There is no real difference
It’s true that the meanings of words can change over time. Whether or not that’s a good thing is another question entirely.
Yes there is.
Care to elaborate on your side or should we just leave it there?
there is, the original hackers built thinks, they didn't attempt to destroy or coopt them
https://en.wikipedia.org/wiki/Blue_box
Bootlegging is copyright theft.
Is Claude output copyrighted?
If anything, a tremendous amount of Claude’s input is copyrighted.
If there’s any bootlegging going on it’s Anthropic that’s doing the bootlegging but having mirrored the video etc sufficiently to beat copyright law.
>Bootlegging is copyright theft.
Ok, but what about those shady sites that resell Windows education keys? They're certainly a "better experience" than buying legit keys, by virtue of being significantly cheaper. You aren't even really committing copyright infringement in the process, because Microsoft gives out windows isos for free, and the seller is really selling a random 25 character string, which can hardly be copyrighted.
>If there’s any bootlegging going on it’s Anthropic that’s doing the bootlegging but having mirrored the video etc sufficiently to beat copyright law.
US courts have consistently ruled it's fair use.
>>If there’s any bootlegging going on it’s Anthropic that’s doing the bootlegging but having mirrored the video etc sufficiently to beat copyright law.
>US courts have consistently ruled it's fair use.
And they also have ruled that the that output of an AI isn't copyrightable.
As such copying claudes output isnt even fair use as that is an exemption to copyright but the same as copying public domain work which any and all are allowed to do.
> Ok, but what about those shady sites that resell Windows education keys?
Yes, they are fine? They might no longer include full first party support by Microsoft for not being "new". Same as buying a used car (also comes with the "shady sites" for a far longer time).
Though this not making any difference by Microsoft not doing any support either way to make more money is a business decision by Microsoft.
> US courts have consistently ruled its fair use.
Like Adam Smith wrote in The Wealth of Nations “‘Free market’ is when a company receives a favorable ruling about copyright in the United States”
and Chinese courts are ruling that using Claude is fair use.
american courts have ruled that theres no copyright at all on LLM outputs
I think renting out ID to let others in without telling the admin is generally unlawful in many places
The current case law in the US is that the raw output of an LLM cannot be copyrighted without further meaningful arrangement or alteration by a human author.
It's quite curious how multi billion dollar enterprises can't compete with a Chinese bootlegger with a big jacket, tbh.
Imagine having such a warchest and being so bad at business, lol.
My biggest concern with pirating has always been malicious programs. But companies still need to show value in their products or people will pirate.
What added value can Anthropic give users not available to pirating users? That is what they should ask themselves.
ZDR but that is meaningless if the person wants to do nothing more than cheat on homework (or has enough hardware to run a local model)
any third party provider can offer zdr. if its a reputable company in a place like switzerland or germany i would trust them more than anthropic to hold up that promise.
The output of Claude is not eligible for copyright protection. I'm not sure how the analogy of bootlegging DVDs would work, given that.
I suppose you are violating the TOS by reselling a service, even if the output can't be claimed as belonging to anyone.
BigAI are all in the bootlegging market themselves, so it's always funny to see them complaining about others copying their "product".
And those darned printing presses distributing works that were written prior to their existence.
I bet you've downloaded a car.
> Yeah, like all those Chinese bootleggers selling DVDs for a few dollars rather than $20. Free market!
It's supremely ironic analogize distillation to copyright infringement when it's literally what Anthropic was found guilty of. It's not illegal to distill. It is illegal to pirate. And it's what Anthropic was found guilty of, not Alibaba.
https://apnews.com/article/anthropic-authors-copyright-judge...
More like one bootlegger complaining that another bootlegger is copying their bootleg DVDs.
This is also a good thing fwiw.
I get the vague impression that this was written in a sarcastic way, but it has a straightforwardly true literal read because yes, this is what the free market is about and Anthropic will have to compete with the Chinese if they want a big share of the market. Chinese models are cheap and good; even without reselling Anthropic's services they're competitive. Which reading did you intend?
And, gotta say, the idea that the Chinese are better at selling US models than the Americans is hilarious. There might be an economic study here somewhere about just how anti-consumer and anti-progress their IP laws turned out to be. We've got an entire postindustrial revolution centred around who can ignore the most stupid laws.
> the idea that the Chinese are better at selling US models than the Americans is hilarious
This is not the right deduction.
China blocks foreign AI from operating there.
> China blocks foreign AI from operating there.
Given the current US government's tightening of export control restrictions and the introduction of a bipartisan bill to block use of Chinese AI in federal agencies, I'd say the two countries' positions are not far apart.
https://apnews.com/article/ai-china-united-states-competitio...
Yes neither are free markets
I think you will find that it's the USA government imposing such restrictions.
That is ALSO happening, but that's beside the point.
Chinese AI apps like DeepSeek are freely available for ordinary Americans to download and use. There's no federal law banning private citizens from using them.
So to claim that Chinese companies are better at selling American companies' work than the American companies can do themselves when they are prohibited from operating in that market, is the wrong deduction to make.
there will be soon enough. TikTok is the example for the US clamping down on companies that dont toe the regime line on israel
> Or does this not apply to huge US corporations any more?
When it comes to favorite companies of the tech communities, it's almost always "Rules for thee, but not for me"
The standard stance is "they can do no wrong and they are absolutely perfect". I mean, look at any thread with anything about Apple in it.
It never did.
In debt the first 5000 years Geaeber makes the case that pure “free market” trade has never really existed in “the west”. The closest to this ideal that’s ever happened was during the Islamic golden age enabled by religious prescriptions against usury.
>The closest to this ideal that’s ever happened was during the Islamic golden age enabled by religious prescriptions against usury.
How does are bans against consensual financial exchanges close to the "ideal" of the free market? It just sounds like you have an axe to grind about the financial system rather than describing free markets.
Usury and debt based economy creates a dynamic where being competitive in production is secondary to financialistion.
In short, instead of market being driven by demand and productivity, it is driven by financier curving out monopolies.
Peak Examples are Uber and AirBnB.
What makes this view more correct than say, "economies with marketing creates a dynamic where being competitive in production is secondary to marketing" and concluding that nothings a free market until we ban all advertising? After all, you can make a vaguely plausible argument about how marketing isn't really about the merits of the product, and therefore allowing it is antithetical to the free market or whatever
> What makes this view more correct than say, "economies with marketing creates a dynamic where being competitive in production is secondary to marketing" and concluding that nothings a free market until we ban all advertising? After all, you can make a vaguely plausible argument about how marketing isn't really about the merits of the product, and therefore allowing it is antithetical to the free market or whatever
Wait, so your pitch in favor of a debt-fueled market economy is that advertising is awesome and that we wouldn't want to "lose" being smothered in ads all the time?
Cause... sign me up for the non-financialized, non-mass-media-advertising-driven economy please and thank you. I'd even be ok with just nuking billboards and mass-media forms of ads and still allowing more direct forms of marketing, if we must compromise! Likely we could find some compromises around just how much of the debt world we regulate too (this should be obvious?).
(I thought the disconnect between the efficiency of competition and the market as realized in modern economies was pretty well understood and taken for granted, but I guess we all find ways to justify the system we're profiting from... even if that means we have to claim we love the ad breaks)
Marketing isn’t free for starters.
Second, marketing can take you only so far compared to the subsidies possible with financialisation.
The West is in a state of psychosis with Debt and Monopolies under the illusion of free market.
The Chinese markets are more free than West, you can just look at the Auto and AI industry.
I'm flabbergasted that you look at the Chinese property crisis and say "only the West does irresponsible loans." No, 60% of China's economy is state-run companies and the remaining 40% need political officers. China is just as capable of making shortsighted decisions as the US, and they have already made several devastating ones.
>I'm flabbergasted that you look at the Chinese property crisis and say "only the West does irresponsible loans." No, 60% of China's economy is state-run companies and the remaining 40% need political officers. China is just as capable of making shortsighted decisions as the US, and they have already made several devastating ones.
While these are hardly shy claims, I don't see anything in them to say "only the West does irresponsible loans"?
> The West is in a state of psychosis with Debt and Monopolies under the illusion of free market.
> The Chinese markets are more free than West, you can just look at the Auto and AI industry.
or the prior post
>Usury and debt based economy creates a dynamic where being competitive in production is secondary to financialistion.
> In short, instead of market being driven by demand and productivity, it is driven by financier curving out monopolies.
> Peak Examples are Uber and AirBnB.
You can throw a rock these days and find a category where the products coming out of China are miles ahead of those coming out of the rest of the world, from a bunch of companies nobody had heard of a few years earlier. And the list is growing pretty steadily.
I would assume plenty of shortsighted decisions are also being made. But I would have a hard time characterizing the state of competition in the west as healthier or more productive when looking at the number of players and the quality of goods being produced in China.
state-run corporation are bad but corporate-run state is good?
You seem to only affirm the GPs psychosis commentary.
https://en.wikipedia.org/wiki/List_of_automobile_manufacture...
vs
https://en.wikipedia.org/wiki/List_of_automobile_manufacture...
Financier want monopoly so use usury for Consolidation. Monopoly bad because no free market. Free market good. consumer happy. citizen free.
Expand. I am typically against hard money gold bug libertarian arguments but your description seems interesting and I am open to being persuaded.
...except Uber STILL faces competition, and I went back to hotels after finding AirBnB too pricy.
It is good and proper that people aim to create monopolies, as long as they want to do that in a productive and legal way! Monopolies are inherently dangerous, but the truth is that acquiring and maintaining one is not straightforward unless you can get the government to ban your competitors.
You can read Adam Smith if you're looking for definitions, there's no need to read charlatans.
Graeber was a confabulator with a very loose grasp of the facts, though.
>religious prescriptions against usury.
Without interest why would anyone loan money? Even the Islamic banking alternatives all just hide the interest charges.
Shares and Goodwill. You loan money for good well or share of an enterprise which comes with benefits and risks.
So equity instead of debt.
Usury is so delicious to many that it’s unfathomable to consider any other incentive comparing to it
What is unfathomable is how you have a functioning economy without easy access to loans at reasonable interest rates.
Try reading Graeber/Wengrow
The same way Stock Market works. Really, Debt benefits a tiny fraction of people involved in the market.
Loaning money as per Islamic Law is a charitable act, not one of exploitation.
reasonable interest rates aren't exploitation. Business Loans serve a critical role in economic activity by putting free cash to more productive use.
That's not true. Islamic finance forbids indefinitely growing interest. Sharia finance agreements involve fixed fees or equity shares. Late penalties can be collected but must be donated, not profit. In all cases, the borrower never owes to the lender for the lender to keep more an a fixed amount determined at the strat.
> what economics told me the free market was all about.
Don't complain when US starts to play by the same rules China has been using for decades.
What is the implication here? Are you warning that US corporations might start doing something shady, like scraping the internet at large scale for training data? Or mass-dowloading pirated copies of books, completely ignoring copyright?
I find it hard to imagine a future where US corporations have degraded to such a point.
Or building backdoor in to the physical servers sold around the world?
No, he means that the US will close most of its domestic market to competition just like China has for decades, and the US may start subsidizing and dumping its goods everywhere
You know, normally when I read these Reddit comments saying "you made me snort on the bus", I always took them as exaggeration.
Turns out I was wrong, I just hadn't read something funny enough yet.
> the US may start subsidizing and dumping its goods everywhere
This deserves to win HN comment of the year 2026.
The majority of the NASDAQ market cap is a direct result of the US subsidizing and dumping its goods on the rest of the world en masse.
> the US may start subsidizing and dumping its goods everywhere
Isn't that exactly what companies like Uber have already been doing? Take VC money, sell goods & services at a huge loss, wait until the competition goes bankrupt.
Yes. Dumping abroad is the entire model that Silicon Valley has been built on in the last 2 decades. China just copied the model. And even then it's a light version of it.
Exactly, it's funny how most Americans have no self-awareness on this topic.
And beyond VCs, which are like massive subsidies funded by printed dollars to which no other country has access, even in industries like electric vehicles, Chinese total direct subsidies to their EV companies are like $5bn per year, while the the ones provided by the US to their auto manufacturers are in the range of $50bn per year.
I don't think the US are cheaters or are doing something bad. But i do think that this propaganda about China flooding the market through "overcapacity" and subsidies is very dishonest and needs to stop.
Just a data point, but the US currently imposes a 100% tariff on Chinese vehicles.
The "stolen IP" argument can always be made as an excuse. I'm surprised how well it works with some people.
[delayed]
The surviving non-American farmers would be confused by the future-speculative tense as America has already been doing this for decades in agriculture, and have been complaining for decades about both the subsidies and dumping of American corn.
[delayed]
as in, the main trade complaint that trump has with nafta. the Uzs wants to dump subsidized dairy on canadian markets, and canada doesnt want it.
same with US corn on Mexico and other central american countries, creating all those migrant problems in north america.
wooo, americans subsidizing and dumping poor quality goods
> the US may start subsidizing and dumping its goods everywhere
The US is a net importer, not exporter. It needs to absorb trade at a deficit to encourage the use of the US dollar as the reserve currency.
We import goods, we settle in surplus dollars. The world runs on those dollars.
If the US starts dumping on various industries (how is it even primed to do this?), then the world reserve currency status comes into question.
Most of the Chinese domestic market is open to foreign competition. The areas that are closed off are those that are politically sensitive: publishing (including social media) and banking.
As for dumping, Chinese goods generally sell at a markup abroad, which is the opposite of dumping. Chinese tokens cost more abroad. Chinese cars cost several times more in Western markets than in China.
> Chinese goods generally sell at a markup abroad, which is the opposite of dumping
Dumping is selling goods below cost.
Usually because government is subsidizing part of the production. I don’t believe the word “dumping” is used for the similar process when Venture Capital is subsidizing it, but using the same term would make sense.
Price at home vs abroad does not matter.
"Dumping" is when Chinese companies beat Western ones on the free market. If all claims of Chinese government subsidies on basic products were true, China would've gone bankrupt multiple times already.
You're being beaten by a Chinese company? Why improve your own process when you can just lobby for sanctions and tariffs instead!
Most of the time its just low labour costs and no environmental reg. Its really that simple
The US spent decades transferring manufacturing, capital, and know-how to China, while Chinese students trained, and excelled, at elite Western universities. Why are people surprised that China eventually became capable of competing with the US?
How do you think the major AI companies trained there model? Pirated books and anything that could be torrented and scraped of the web.
they were being sarcastic
Don’t know about that…
America industries used to play by the same rules. Look up Samuel Slater.
A credit system that determine your upward mobility?
Free markets work when paired with property laws that can be enforced if broken. If China could offer a cheaper solution in that framework, it would be as you say.
AI was always going to be a race to the bottom and low margins. It’s why I’m extremely bearish on AI as an investment. It’s framed as some high margin business when it’s really going to end up like your toilet paper at Costco. You will use whatever is cheapest and gets the job done.
Correct.
And the value-add experiences that utilise LLMs require immense imagination et al that folks at Anthropic will not be able to conceive of - given that they have made immense sunk investments in existing assets. This clouds ones thinking immensely.
Both OAI and Anthropic have tremendous failure risk and this is of course not reflected in the fake private market valuations.
I see a world where lots of stuff is mass produced in china (tokens) but the acutal goods that deliver the experiences are designed, marketed and sold in the west at much higher prices. of course this a nightmare scenario for anthropic et al.
You seem to not get how pervasive and evil the Chinese State is at making everything thing shit for citizen world wide. This is one of the reasons.
I used to think this.. but I think my opinion is changing. The reason is that the leaders likely will be able to accelerate faster.
So what you see is the market "stretching".. the bottom getting cheaper and the top end running away and getting more expensive. At some point the top end may be too valuable to even sell access to.
Most white-collar/knowledge-service-industry work is a weird type of work.
It's fundamentally about enabling things and largely middleman-type stuff. I have a hard time imaging what "At some point the top end may be too valuable to even sell access to." would even look like? What are you doing with that AI power, and who is paying for the output and why?
Elon probably isn't gonna spend that much on a model that can generate him ever-better fake porn but does nothing that he can use to sell stuff to other people. Especially in a world where open models are "good enough" for many things like "tell me how to fix the plants in my garden that are dying" and the like. What remains in the narrow knowledge-work space of: can't be done by an individual or small group themselves, but is valuable enough that it would make sense for people to hoard access to these extreme frontier models? Try to recreate Hollywood-as-a-monopoly by becoming the single content producer for everyone's individualized feed and so owning all the advertising budget in the world? Seems hard, we've already seen how easy it is for cheap-and-crappy-but-addictive-or-funny content to disrupt traditional media.
(There's also pure scientific research, but historically that's not very directly connected to "massive profit" and has a habit of leaking out and getting productized most effectively by other people or just being really easy to copy once someone shows how it's done.)
Robotics could be a different story, as physical labor can be more inherently productive, but "reasoning" advantages are unlikely to be a big long-term differentiator there. At some point the brick laying robot is satisfactorily building the structure, and you're good.
A huge amount of the value of "the economy" and the power of a currency is driven by circulation of money, and one thing that all the "bullshit jobs" white-collar/service-industry work does is keep the money moving and ensure that a lot of people have some good-or-services of value to exchange. If you take away the ability to offer services worth exchange from huge chunks of the economy in these super-frontier-models-replace-everything scenarios... you're gonna have a bad time?
> The reason is that the leaders likely will be able to accelerate faster
Model improvement is already hitting diminishing returns, and people aren't willing to pay substantially more for a slightly better model. There's no "accelerating away" when the new models don't open up a huge new market. If anything, the companies burning huge amounts of money on marginal improvements will be undercut by companies happy to sell current models at a significantly lower cost.
Glm 5.2 very much argues against that. Opus 4.8 level quality for cheap. That’s sufficient for most tasks, so if/when you do need SOTA models you can spend more for specific tasks but otherwise rely on the cheap but still plenty good models for everything else
The issue is who is going to pay for access?
The model has to be sold for cheaper than the value it adds.
Or your customers will bleed out financially.
EDIT: rethought entire premise.
If you continue studying econ you will learn about the various failure modes of free markets including the free rider problem.
https://en.wikipedia.org/wiki/Free-rider_problem
If you keep studying econ you will learn that these failures are actually the norm, and thus why the only "capitalist" states to really succeed have been the ones where the state was strong enough to reign in the market.
Of course, such a state of affairs is temporary at best -- since the alternative is so lucrative!
Externally subsidized predatory pricing is the opposite of a free market.
So all those companies selling at a loss to gain market share aren't part of the free market? Like openai, anthropic, and SpaceX?
Cough.. cough.. Uber.. cough cough AirBNB
Do you also think Chinese selling counterfeit US postage stamps on eBay for 50% retail price (which is a major problem CBP and USPIS are fighting presently) is the free market at work?
This post is so delusional and dripping with condescension I've read it three times and I still can't figure out if you're trolling or not.
Postage stamps have specific legal protection from duplication. The output of an LLM is not itself eligible for any legal IP protection.
So it's a proxy.
Do you think you can re-stream cable TV or Netflix to your own paying customers at a cheaper price?
If it's streaming an uncopyrightable product, absolutely. This isn't even a gray area.
I'm curious why you think you cannot re-stream a public domain stream.
You're playing word games to justify something which is clearly ethically wrong.
You can't re-stream free over-the-air network TV.
That one company with the datacenter full of TV tuners tried and was sued out of existence.
Over the air TV also isn’t public domain. It’s licensed to a station for broadcast. The output of an LLM has been deemed ineligible for copyright. Until you square that pickle your circle isn’t circling.
Free over-the-air network TV is (generally) copyrighted.
The output of LLMs cannot be copyrighted. This isn't a semantic game; it's literally the case that Anthropic cannot seek relief for people duplicating the output of an LLM.
With you, but I suppose they could have a case for circumventing access restrictions under the DMCA aka leet hacking.
The relief available to a licensor for violating a license use restriction is cancellation of the license. And they're free to do that, just like Alibaba is free to pay somebody in Hyderabad $20 to make another one.
DMCA can't apply in this case because (this is the "C" in its initialism) it is based on copyright protections, which the output of Claude is not eligible for.
> clearly ethically wrong
Ethics are subjective. That’s why we have courts judge based on the law and not ethics
Post offices aren't meant to operate in the free market. More things should be like them.
I guess you missed the fraud part.
Pulling out the worlds smallest violin for this case. It's just unheard of for AI companies to steal things.
Has any tribunal ruled that fraud did happen?
>Fraud
According to which lawyer caste?
Are American laws absolute truth? If not, who cares?
I mean, which lawyer caste do you respect? Is that one is cool with stealing credit cards to buy Claude subscriptions?
> 3. At an Italian airport: Constantly stealing bags, opening them to pick out MacBooks and credit cards, a credit card manufacturer-who sells stolen "black" credit card info to transfer stations— is racking his brains to save you money.
Where is this quote from?
Fraud is just what losers call disruption.
> This is one reason why Deepseek & GLM are priced so cheaply, they are competing with impossibly low token prices in China. They have to keep prices low, in order for people to use them.
This one does not make sense to me at all.
Deepseek and GLM are openweights, even US inference provider are selling them at much cheaper price. The price is cheap because the model is more efficient.
DeepSeek permanently cut its V4-pro API prices by 75% because they were too expensive. Without the price cut, Deepseek V4-pro tokens would have cost more than resold Opus 4.8 tokens.
Opus 4.8 is a more capable model, so almost nobody was going to pay for V4-pro at the original price.
> Without the price cut, Deepseek V4-pro tokens would have cost more than resold Opus 4.8 tokens.
You mean it's functionally as if American tokens are being price dumped in China and Chinese model providers are being forced to compete with that and innovate? So many delicious layers of irony, lol :-P
China also have trust issue with American companies. Most of State-owned companies will not use those services even if they can directly access them.
And? The US feds wont allow even local Qwen or Deepseek models either. "Evul godless commies" or some such nonsense.
If other providers can match Deepseek's first party prices, that probably means that the economics for running inferencing work out for them.
Urm, no? I man they did cut prices by 75% that part is true - but they reduced a starting price that was below sonnet.
Also it's a open weight model, doing that is impossible long term because the real price will be set by the other model providers, who priced it around 60% of sonnet inference cost. Had to look that up though, so that's today's pricing.
Is there a contradiction here? If resold Opus tokens are sold at a 93% discount, you can be a lot cheaper than Sonnet while also a lot more expensive than resold Opus tokens.
If resold Anthropic tokens undercut even the at-cost open-weight model tokens, because they're reselling subsidized subscription tokens, then you'd have to start selling open-weight model tokens at a loss in order to match them.
One would think Anthropic could point Mythos at this to solve the reseller problem outright:
- Purchase multiple accounts via resellers
- Send messages that contain a UID
- Capture these in Anthropic's logs
- Shut down account. Use any metadata to identify related accounts
/loop
Maybe Fable is not as capable as thought?
On the one hand they talk it up as world ending and on the other hand they can't manage bot accounts on their own service.
I want to hear how this can be rationalised.
From the article "every layer of control frontier US AI companies have added (geoblocking, phone verification, credit card requirements, and now live biometric KYC checks) has produced a corresponding layer of evasion infrastructure".
They could be doing this internally and want to see if they can downright eliminate these loopholes before bringing Fable back.
I don't care how they do it, I just want to use Fable again.
This, just like blanking out a football stream for a split second to binary search and find IPTV rebroadcasters, is far too good a solution. Suits prefer to make it seem like their job of fighting "misuse" is hard, justify their budget, continued existence of the trust & safety department, face scans, etc.
>They achieve this by reselling capacity from pooled Claude Max 5x accounts, payments fraud, and also reselling the model output to various Chinese labs.
>Here's one token reseller, they're offering Opus 4.8 for a 93% discount below official API rates: https://yunwu.ai/pricing?keyword=claude
But is it cheaper than getting your own account? Otherwise this sounds like the "anthropic/openai are losing gazillions of dollars because they're selling $1k worth of tokens for $100" line that's commonly trotted out by AI bears.
It's very difficult for people to create personal Anthropic accounts from China. Anthropic blocks Chinese bank cards, so people must pay with a foreign bank card, which they likely don't have. And even if they manage to set one up, they have to access it via VPN, which eventually gets the account flagged. They then have to complete identity verification, which most Chinese users are unable to pass.
There's a similar Claude resale market going on in Russia. On Funpay they are selling Claude tokens for roughly 20-30x cheaper than official Anthropic API pricing.
And phone number verification too? So that's 3 hurdles to jump to just get opus.
for verification you can buy phone number for $1 easily.
Doesn't ~every phone number verification service check the telephone provider and only allow from a select whitelist of residential providers?
> Claude and ChatGPT are both blocked in China
So it's presumably cheaper than attempting to spin up your own method of circumventing the blocks.
You can use it as an API unlike the subscription.
Maybe these resellers are using stolen American credit card numbers? Reselling Claude access seems to be a nice way to launder the money.
Those resellers are simply just selling Kimi K2.5 or GLM5.1 as counterfeit Opus. We, Chinese, know how to play the counterfeit game for a long time in so many industry.
Great point, and this is on the vendor (Anthropic) to address. Typical fraud issue.
OP is about modeling distilling the capabilities.
Somebody figured out how to make the trial profitable!
I don't really feel bad about anyone here, they were subsidizing to get people hooked, someone turned the subsidies into profit when they got selective pricing mode enabled, it was always going to be arbitrage.
But the winner is the guy in the middle in a jurisdiction that will likely be judgement proof, because everything they capture, both input and out, and if available, thinking tokens -- are gonna be for sale as soon as you cut off their other revenue.
Zero knowledge was a commitment Anthropic took seriously, until it got inconvenient.
So, people reselling their leftover plan crumbs? Probably a bad idea for a lot of reasons, but it's civil, and I wish Anthropics lawyers actually closing Streisand's LLM
I don’t follow your reasoning. It is foreign to me. You talk about winners, but this is clearly fraud.
Fraud?
Anthropic sells some undisclosed and ever-changing number of tokens for $200, the customer uses those tokens. If there's any fraud here, it's that the $200 next month is silently worth fewer tokens than the last.
Thank you for your very informative comment!
(It's a shame almost all replies are just the same contrived pessisism found on every Anthropic thread on HN).
Indeed! It’s so hard to find reasonable takes on AI that aren’t littered with accounts created 11 days ago that only post in threads related to Anthropic for some reason
Also just plain old fraud: selling Chinese models as Opus. With the capabilities of Chinese models catching up fast, this is getting more and more difficult to detect.
> They achieve this by reselling capacity from pooled Claude Max accounts, payments fraud, and also reselling the model output & reasoning chains to various Chinese labs.
Claude never provides the raw reasoning chain. What you see is just a summary of that reasoning. Getting the full thinking output requires an enterprise agreement.
https://patrickmccanna.net/the-text-in-claude-codes-extended...
how hard is it to find a manager or ops team member at one of the enterprise companies and buy lets say 100gb of logs? the chinese lab can promise to anonymize the data before training, not release it raw and pay a good price.
honestly you might just need to get data from a couple long sessions and feed it back to another model as an example to make synthetic reasoning chains. if the emulator model is good enough it should work.
What does this have to do with Alibaba? Are you saying Alibaba is the reseller?
If not it sounds like you are describing a separate phenomenon.
They buy the logs from the bot farmers
Are logs somehow used for the purpose of training their own models or something else?
Distillation from having enough logs
I’m surprised that instead of cutting them off Anthropic doesn’t just switch them to a lower quality, cheaper to models.
That would seem more effective than simply shutting down the accounts.
Keep them paying for junk.
That sounds like it would actually be fraud.
Not if you simply say in the terms of service that it's allowed. Then suddenly it's normal (every company does this). Similarly to how the terms of service can simply say you're not allowed to sue.
Thats pretty crazy. This kind of thing jeopardizes Claude Max.
If Anthropic is selling a dollar for less than a dollar, they are running a business that doesn't make sense. That's what jeopardizes Claude Max, not this.
Almost all consumer services have a built-in level of breakage that make them profitable. Mobile providers certainly wouldn't be able to offer unlimited calling if everyone was actually on the phone 24x7.
Sure they would. Do you know how little bandwidth a phone call takes?
A voLTE call is like 40kbps. For every person on earth to be on the phone to another person would be 4 billion calls would be about 160tbps. Which is less than 10% of the Internet's capacity.
Terminating a PSTN call requires a lot of control plane infrastructure beyond just raw bandwidth. Especially mobile where you need to keep track of devices physically in motion. Could a system to support 4 billion simultaneous calls be built, sure. But current PSTN systems are nowhere near sized for it.
When was the last time you place or received a call to/from PSTN?
The over subscribed gym model!
But if it's intended to be used by one person, it seems like breaking the contract by sublicensing it out to dozens of other people. It's like buying a netflix subscription for $15, then sublicensing it on a per-hour basis to dozens of other people.
There's still per-window and weekly limits though, so it's not really like that.
Office 365 is licensed per seat/account, but each account has a 5 device limit. Do you think it's fair game for an enterprising person to sub license each account to 5 people, 1 device each?
I wouldn't do it personally for the same reason I wouldn't share my toothbrush with 5 people.
You can write whatever contract you like, the problem is how to enforce it, and a greater problem is enforcing it around the world.
Plenty of things are intentionally run at a loss (for years!) to gain market share and quantity of ongoing recurring users, or with expectation of ROI later on. Multiple generations of the Xbox hardware have been sold at a loss with the expectation that customers will purchase 300, 400, 500 dollars worth of games, which are very high margin, over the lifespan they own the system.
I get that. It works as long as nobody calls out the emperor for having no clothes.
It's similar to fractional banking, you gamble that people won't want their deposits all at once and pray for you're big enough for bailouts when they do.
It's still a business whose fundamentals don't make sense, you're just gambling you won't get found out.
> you're just gambling you won't get found out.
It's not so much keeping it secret as counting on no one finding a way to harvest the subsidized value at scale. There's an example of that occurring in game consoles with the Playstation 3. Sony's little-used OtherOS feature allowed Linux to be installed on the PS3 and the Cell processors were quite a good deal for scale compute. So the U.S. Air Force Research Laboratory bought ~1800 PS3s and ganged them together in a datacenter as a supercomputer called Condor.
At >500 TFLOPs it was the 33rd fastest supercomputer in the world. Of course, Sony pushed a firmware update that removed the OtherOS feature entirely.
Oh they know what they’re doing. They’re playing the long war of attrition game. Subsidize your product to undercut your competition until they go out of business. Tale as old as time.
> It works as long as nobody calls out the emperor for having no clothes.
Why would customers knowing that the vendor prices goods/services at a loss cause those strategies to fail? Customers often know. Most know about razors and blades; many/most know Lyft/Uber operated at a loss to gain market share. etc.
Another post on fractional banking hahahaha.
I suggest you go learn how money is created in the modern economy.
I mean most of you should stop talking about anything finance related until you learn this stuff properly.
In international trade, isn’t this called dumping which gets major political pushback?
That is pretty crazy, almost like how Claude and all the other models are jeopardizing other businesses without paying for their training data and wiping their ass with robots.txt
don't buy your drugs from shady operators children! always get it from the source
Hm! In this context, introducing ID verification may have been a significant silver lining to the order to take down Fable for Anthropic.
This also sheds a very different light on people saying that competitive open-source models are undermining frontier labs' business model.
The chinese have already worked around the ID verification, by recruiting people in low-income countries to complete the checks for less than 30 USD per account (so much for Altman's Worldcoin).
https://tech.yahoo.com/ai/claude/articles/chinese-grey-marke...
This story reads like a William Gibson novel. Wild times.
> which is also why Anthropic introduced identity verification, to slow down the onslaught of bots.
Lol. The irony is thick for anyone who ever had to attempt defense against an onslaught of American AI lab crawlers that ignore robots.txt
Yeah nobody is gonna be shedding any tears for them
Where are you getting cheap GLM5.2? It is about 1/3 the price of Opus, which is not what I would call cheap.
Depending on the provider, GLM-5.2 is between 4.5-5x cheaper than Opus. You can compare prices/speed/etc. for basically all relevant models on aa https://artificialanalysis.ai/models/glm-5-2/providers
Wait, so is your theory mutually exclusive to Anthropic's claims of "theft of capabilities"?
No, it's part of the capability theft. They resell Claude tokens cheaply and then simultaneously log everything for distillation. Even if they take a small loss on the token sales it's much cheaper than the equivalent compute.
No, this reseller 中转站 thing is basically a loss leader for certain chinese ai labs to distill claude with verified human input.
Not really. I think Anthropic focuses on identifiable distillation attacks rather than the (even larger) industrial-scale token harvesting and reselling operation, because they don’t want people to know how easy it is to get cheap Claude tokens.
Once people realize they can access Anthropic models at a 90% discount, they won’t want to pay full API prices anymore.
Needless to say, they also collect all the data and sell it to labs which want to distill the models they’re serving.
How are they 'streaming' the responses and 'pooling' the tokens?
Do they have MacBooks in the US that run the queries and stream the outputs back to China?
Why do you need macbooks? Just rent servers from any hosting provider.
Not going to work for very long or at any scale coming from datacenter/hosting provider IPs. Google "residential proxies for sale" for the tip of an iceberg of how they snowshoe the traffic.
I use my Codex and Claude Code subs on like 4-6 different servers, ranging from AWS to Vultr to Linode etc.
That’s a major and legitimate use case for developers, Anthropic can’t just block data center/hosting IPs because their actual customers use them on data center/hosting IPs.
Now consider what will happen if your pattern of queries and context history triggers a pattern that makes it obvious it's some API key being used by multiple different entirely unrelated people on totally different things, or any other pattern of use that makes it obvious it's being used for distillation.
Two parts here.
First, well-calibrated systems for detecting API compromise is a good thing (or good intent at least). Credential malware is exploding.
Second, the challenge is that significant amount of genuine work — such as evals — seems practically impossible to distinguish from generating RLAIF outputs.
Hey, if the bastards can use residential IPs to suck all information into their models with their crawlers, so can we!
As long as you stick to a single unique IP per account it isn't going to get flagged.
Respectfully, no, that's not how it works. You think the people running anti-fraud and anti-bot measures don't have tools that know the specific ipv4 and ipv6 CIDR ranges of every ASN that they categorize as hosting/colo providers?
And that's just as a basic first effort reject measure to prevent automation tools from using things designed for human-interactive use only.
Go try to do many of these things from Cogent IP space and see how long your project lasts.
Every developer at my company uses their Claude Code subscription on an EC2 dev box. Plenty of other tech companies do the same. Heck nowadays people even install Claude Code directly on production servers in data centers and use it as an ops tool. None of this is a problem. Fraud and abuse detection is a lot more sophisticated than just checking an IP range.
None of the LLM providers block professional use thus they must necessarily permit access from commercial IP ranges.
I have no idea how the resellers are doing it but an obvious starting point would be a cheap VPS node that routed each account to a unique semi-permanent IPv4 or IPv6/64. All the provider would see would be a regular account making a normal looking stream of requests from a stable datacenter IP address. Any given request stream would remain consistent (at least over a period of a few hours) because a reseller would take care not to split the session of a single user across multiple different accounts and not to interleave the active sessions of multiple users on a single account.
Detecting this would be extremely difficult because on a longer time frame it's perfectly normal for many distinct accounts to work on the same code base.
And it’s perfectly normal to be running Claude Code on EC2, a VPS, etc. I do it all the time!
You block clouds, you block devboxes and your customers.
Wouldn’t it be funny if the same residential proxies allowing these labs to scrape the Internet is also what’s enabling these resellers?
If we're getting up to the scale of these resellers and also considering chinese state interests then we're well into the range of purchasing a few small ISPs in different countries and "padding" the legitimate subscribers.
Sorry for being a newb here but are you saying Anthropic blocks people from running claude code on datacenter ip ranges?
Or is the datacenter IP just one part of the picture?
I assume they use residential proxies (tunneling in the background of crappy Android games) for the "last" hop.
Nonsense. Many if not all legit Claude users are using Claude Code inside their Cloud servers. How else would you use it anyway? For just local dev? That's so 2000 and late bro.
No, I'm not saying it's the exclusive and only measure (that would indeed be something we might see 20, 25 years ago), it's one of a myriad of discrete datapoints used to determine if an account is authentic or not.
There's a lot of inauthentic coordinated automated systems these days along the general lines of scraping/crawling/social media manipulation/sockpuppetry that require running through residential proxies or proxies to places that don't look like datacenter IP space.
The resellers route requests via one of thousands of Claude Max 5x accounts. When an account reaches its usage limit, they automatically switch to another account.
Why would they use Max 5x instead of Max 20x, which is cheaper relatively speaking?
You're right, they're using the $200 Max plan, which I thought was the 5x plan. It's talked about in the article I linked.
Don’t trust my experiences as fact since it’s a bit opaque, but I believe 20x only offers 4x the 5hr session limits. The weekly limit is still 2x, which is the same as the price increase.
the answer to your question is containers/VMs + residential proxies
that explains why theyre blocking me. i have privacy controls up high and they must think im a chinese residential proxy bot
ask your gpt how does openrouter work, then ask, how do proxies work.
They probably asked claude how to do it.
>>Chinese resellers are offering Claude tokens at 70-90% below official Anthropic API prices.
Can someone with more understanding dumb it down for me please.
Does this mean that the reseller (for example XYZ) is buying it from Anthropic at Anthropic's price and then reselling it at a cheaper price???? why would XYZ offer this at a loss like that when they could just offer it at Anthropic's price???
The link does mention Opus and other models but what's the proof it's actually Opus. I could be selling deepseek for all they know and can call it Opus. System prompt: "If anyone asks your name - you are Opus 4.6".
People have estimated that a $200 Claude Max 20x subscription gets you ~$2800 worth of tokens every month if you use it continuously. So if you can find a way to resell the tokens you can offer a 90% discount and still make a profit.
> Does this mean that the reseller (for example XYZ) is buying it from Anthropic at Anthropic's price and then reselling it at a cheaper price????
Yes, as they explained they do it through things like pooling accounts, straight up payment fraud, and double-dipping by selling the logs of the conversations to chinese AI labs so that they can train their own models on it.
> The link does mention Opus and other models but what's the proof it's actually Opus. I could be selling deepseek for all they know and can call it Opus. System prompt: "If anyone asks your name - you are Opus 4.6".
There might be some that try this, but they would get caught very quickly, there's still a moat between Claude and Deepseek, even in casual use.
Look up Zilan Qian's reporting if you want more detail.
Summarizing for you: Anthropic is a stupid company that let everybody steal their tokens
Behold the mindset of an individual from a low-trust society.
“x is stupid because y was smart and did z shady/illegal things at their expense, if x was smart they wouldn’t be susceptible to y going to great lengths to exploit them ergo it’s deserved”
> “x is stupid because y was smart and did z shady/illegal things at their expense, if x was smart they wouldn’t be susceptible to y going to great lengths to exploit them ergo it’s deserved”
I honestly can't tell if you think this sentiment is expressed by the US AI companies or the Chinese AI companies.
This gives off "The last line of Orwell's Animal Farm" vibes.
Not really sure what else they can do, between people running residential proxies (embedded in cheap games or for a tiny sum of crypto) on their phones at home, making the source of the traffic indistinguishable from legitimate traffic, to ID verification check completion as a service in low-income countries, there isn't much they can do to block it.
They could run their service at a profit?
No customers at that price point though.
> No customers at that price point though.
Oh, no!
Anyway.
Because Anthropic's subscriptions come with X amount of tokens / week, and divided by the subscription cost it is WAY less than what they charge per-token (the "API price") beyond that.
So these resellers get a ton of accounts on subscriptions and sell the cheaper tokens.
They probably buy the plans instead of the API tokens, and resell access via a custom API that routes to the plans. So you presumably get cheaper access this way than paying API pricing.
It makes no sense.
These China e bashing is very annoying. It is hard to argue with people drowned in American propaganda. I'd expect better arguments from the intelligent people in HN
no honor among thieves.
Im ok with this! Is there a site that list all these resellers, or better, a openrouter-like for these resellers?
They're called 中转站 (transfer stations/proxies). They can be a bit tricky to find on your own, so I'd suggest asking your preferred AI to search in Mandarin for you. I linked a larger operator in the parent comment, or have a look at https://hvoy.ai/ which lists a ton. You can also find many on Funpay, which may be easier to use.
This is one seller I found, they're reselling "real Max 20x subscription accounts", at ~97% below official API prices https://funpay.com/en/lots/offer?id=70812310
Note that whoever you buy from will be able to read all your tokens, so don’t use it for anything confidential/financial.
> They can be a bit tricky to find on your own, so I'd suggest asking your preferred AI to search in Mandarin for you.
Random, but are the frontier AI providers like ChatGPT better at searching the Chinese internet now?
When I was in China a few months ago and asking AI for restaurant recommendations, all the US frontier providers were pretty useless, or plain out hallucinating, even if I specifically ask them to search Dianping (Yelp for China).
I'm not sure. I use Grok for most of my esoteric searches and it does quite well. I explicitly prompt it to search in the language most relevant to that query, and found it does quite well. I also tell it to respond back in English. Often, there is not enough information available in English about nice regional topics.
I know ChatGPT had an issue where it only tried to search in English (unless prompted) and the answers were not great.
Why aren't these on openrouter?
Identity verification won't work. Nothing will. They are paying (and will continue to pay) US citizens sitting at home to copy-paste / type prompts out if they have to. But eventually they won't have to.
Once there are enough spam PRs on github / uploads of claude conversations, enough mythos output used in production etc.; it'll just be the same albeit delayed. Doesn't matter either way.
I feel for Anthropic's team and I understand where they're coming from, but once you reason it out, you'll come to the conclusion that this war is an exercise in futility.
Unlike prior systems - like Google's algorithm; these models aren't entities that use math in the process of doing X or Y (information retrieval from such and such infrastructure) -- they are the math. More precisely they're mathematical functions. Very very complex functions. Almost certainly impossible to write out without filling up a library functions. But they're mathematical functions nonetheless.
So when your text is processed, then Mythos / Opus etc at their core compute the result of the Mythos / Opus function,
where f is a continuous function, https://www.turing.ac.uk/sites/default/files/2025-11/languag...According to the Stone-Weirstrass theorem (edit, it's Stone-Weierstrass with an e.), with enough data points and mathematical sophistication, anyone can approximate the shape of this function.
Of course, the more data we get, the better our approximation becomes, but the beauty of it is that all we fundamentally need are the input and output and eventually we'll create a good enough approximation of the f that's Mythos. Which is the entire product.
I bounce ideas off of Opus these days (Fable for the brief time it was available) and it pointed out that this is arguably the same as Google search, but I disagree with it because Google search is a process;
Google search differs because the algorithm is one step of a multi-step process that is continuously occuring. Google crawls pages. Google stores and indexes what it finds. Google then exposes this to retrieval via its algorithm. User uses algorithm.
Google isn't a mathematical function. It used to be a process. (RIP Google 1998-2019, you will be missed and remembered)
You cannot arrive at the results of those operations via simple observation; not unless you index Google by making another Google.
You can however, do so for these models. It is a very costly process, but there are many paths up the mountain. Many ways for this to be ultimately pointless. As many ways as there are bored mathematicians.
It's better in the long run for Anthropic et al to make friends / not give people a reason to sneak in (a la piracy -- another attempt to control information) than it is to try and shut people out.
And no, it's not going to be pandemonium because if everyone has access to Mythos then no one has access to "Mythos."
Why wouldn't you first run this model to fix the obvious bugs it could find on your codebase? The power of a Mythos goes away if you can do the amazing "jail break" of "Claude, fix all the bugs please."
Just saying.
That's an insightful perspective and I think I largely agree. But just for fun, I wonder if that isn't an argument in favor of making the function implementation impure. Perhaps "enhancing" all queries with some sort of search result (or query of a giant db) instead of charging for an explicit tool call. Not only is it sorely needed to prevent stale data but (on the process level) it breaks the purity assumption on which the approximation theorem depends (alternatively on the function level it introduces hidden inputs).
This is why every AI company does crawl today.
Do they just reshape the function on the fly or save the process steps? Maybe it doesn't matter anymore. Even Google indexes are more and more spoiled to become representation of the function, because of the AI slop.
Genuine live data is king.
But I can rebuild glm Using open source methods…
And there are a ton of Claude conversation logs (with CoT/inference) with no clear provenance circulating freely on huggingface, guess where they (likely) come from.
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The issues with LLMs go beyond just IP theft. I would not say PRC making LLMs cheaper is the best outcome (though it is better than nothing). The best outcome would be to make the practice of training on our data without consent illegal, which would simultaneously slow down economic change and make it more organic as well as give PRC companies less capabilities to extract.
> The issues with LLMs go beyond just IP theft.
There is no IP theft because LLM outputs aren't protected, just egregious ToS violations.
- Deriving a “no derivatives” licensed item is illegal, no?
- Selling a “no commercial” licensed item is illegal, no?
- Deriving and/or reproducing MIT licensed code without credit is illegal, no?
- Reproducing and/or deriving GPL code and not notifying and/or not making GPL is illegal, no?
i still want those data sets to become public domain. open weights still isnt good enough
That's the conundrum isn't it? Anyone that posts their datasets would be immediately sued/blocked/boycotted to oblivion due to the obvious and blatant data theft, not to mention IP and copyright issues.
Nvidia's even being sued for providing scripts which automate the downloading of said data from non-Nvidia sources. We certainly don't need copyrights that last nearly a century after the author's death (they literally cannot help the author), so here's hoping that some of the disputes over all this money changing hands can reign in some of the existing copyright sprawl. A stronger public domain would provide more useful training data for everyone, including open source models, and make criminals out of fewer AI researchers.
I hope you say the same when these cheap llms are used in drones to target humans. The world models are exactly built with that direction in mind.
Cool beans boomer alarmist stance. The Chinese models here are doing what they’re supposed to price the market accordingly.
Reminds me a bit of the anecdote of Steve Jobs complaining about people ripping off the Mac GUI, in the mid to late 1980s, when he gave no public acknowledgement to the work done by Xerox on the Alto and Star operating system.
"you're trying to rip off what I've already ripped off!"
Crawl the whole Internet to build a gargantuan sized LLM and then complain you're being copied...
I think you meant a quote attributed to Bill Gates:
"Well, Steve, I think there's more than one way of looking at it. I think it's more like we both had this rich neighbor named Xerox and I broke into his house to steal the TV set and found out that you had already stolen it."
Yes, I think the Gates quote was a response to repeated and aggressive complaints originating from Jobs (to anyone who would listen) that he had been ripped off.
I don't know if that's a real quote from Gates, but I do know it was in Pirates of Silicon Valley.
Seems legit:
https://www.folklore.org/A_Rich_Neighbor_Named_Xerox.html
Neat, so the scene in the movie was pretty close to reality then!
Apple gave Xerox the right to buy $1 million of pre-IPO stock before the meeting took place.
Glad you pointed this out. I believe the sequence was that Jobs himself got a shorter demo during his first visit with no prior arrangements. He then negotiated bringing back a group of his key people to get a more in depth demo and that included the stock deal.
When Apple was accused of 'ripping off' PARC, Steve didn't seem keen to bring up this rather salient point. I suspect it may have been a combination of wanting Apple to continue receiving credit for these innovations from consumers and also the fact that, in retrospect, the million dollar stock deal could seem a bit like trading beads to Native Americans for Manhattan Island. Another point worth noting is that Apple's PARC visit was in December 1979 and the Xerox Star was publicly announced in April 1981, so Apple got a 15 month head start (the Apple Lisa shipped in Jan 83).
I've also heard that Xerox didn't hold on to the Apple stock for very long, so never gained the windfall they could have. As is well documented, Xerox senior management didn't understand what they had in PARC and also didn't understand how rapidly microcomputers would become ubiquitous. So, of course, they didn't think Apple's stock price would skyrocket either.
Lisa and early MacOS are tremendously different in their details than the Alto operating system. While there was clearly a transfer of inspiration, Apple engineers like Bill Atkinson made countless small and large innovations to simplify the Xerox GUI model and improve its usability based on extensive in-house R&D and user testing (and in some cases implement features that the Apple team presumed Xerox had but actually didn't exist on the Alto). It is simply ahistoric to build narratives around Apple stealing Xerox ideas wholesale.
For more details on Apple's early UI evolution, Atkinson kept polaroids of a variety of prototypes and mockups: https://www.youtube.com/watch?v=Qg0mHFcB510
“You’re trying to kidnap what I’ve rightfully stolen!”
Perhaps an arrangement can be reached?
The hypocrisy of Anthropic complaining about "illicitly extracting its Claude AI model capabilities" and supporting the White House's accusation of China "stealing U.S. AI labs' intellectual property on an industrial scale" is hilarious.
Anthropic, OpenAI, Google, Microsoft, et al trained their models by ignoring the rights of copyright holders when harvesting whatever content they could. Now one of them is crying foul for another entity doing exactly what they all did?
Hilarious.
The AI companies seem to take the viewpoint that everything on the internet is free, except their stuff. It's okay to hammer some random website with AI crawlers, ignoring robots.txt, and causing bandwidth costs to skyrocket. But if you cost an AI provider money with your data acquisition practices, well, that's just clearly unacceptable.
> But if you cost an AI provider money with your data acquisition practices, well, that's just clearly unacceptable.
It's the same question libertarian advocates cannot resolve:
It is also not a coincidence that leadership in many tech companies have expressed libertarian ideals.That's one aspect, which is a bit of a gray zone. But Anthropic trained on pirated books. That is explicitly illegal.
It's not exactly the same, since any Claude output is public domain under current law. So the Chinese aren't stealing anything here.
there's no honor among thieves.
>The strike by Alibaba is described as a "distillation" effort, which Anthropic has said involves training a less capable model on the outputs of a stronger one.
Claude used TB of content without permission to train their model and it was ok for them. Now someone else uses the output of a Claude model to train model and they cry foul.
It was not okay for them, they had to pay one billion dollars.
>It was not okay for them, they had to pay one billion dollars.
Essentially peanuts compared to what they would have to pay to obtain the rights of everything they pirated.
That’s a pittance compared to their revenue.
> The strike by Alibaba is described as a "distillation" effort, which Anthropic has said involves training a less capable model on the outputs of a stronger one.
I don't see what's wrong about this.
> Anthropic said the campaign was conducted between April 22 and June 5, 2026, and generated more than 28.8 million exchanges with Claude through almost 25,000 fraudulent accounts.
What makes the accounts fraudulent? If they have paid the agreed price, surely it's fine? If they haven't paid, why did Anthropic provide them service?
> What makes the accounts fraudulent?
Fake identity? And general deception about the use
Because Anthropic has terms of service with more stipulations than just "you must pay and can use the service for any purpose"?
Oh, Anthropic, the company that hoover'd up everyone else's data, and is now unhappy when others are doing to it what it did to others? The same Anthropic?
Yes, this joke/point has been made 10,000 times in this thread in almost every comment, and on every other previous thread. Thank you!
I'm sure all the artists and creators they stole from had stipulations too.
The artists had actual laws to protect them, not just vaguely enforceable terms of service. And look where that got them. I have zero empathy for the huge company getting a taste of their own medicine.
Anthropic paid one billion in a copyright settlement. That's a lot of money considering they never distributed the pirated books they trained on.
Nowadays they buy copies of books, train on them, and then destroy them.
And it looks like the companies distilling Claude are paying for tokens using the subscription Anthropic provides. Seems like fair play to me.
They are almost certainly paying orders of magnitude less than a billion dollars. According to another comment, they instead buy tokens resold from subsidized subscription accounts, which is against Anthropic's TOS.
violating their terms of service doesn't make it fraudulent?
I mean they could read the traces and learn it themselves right? /s
I'm looking forward to the trial where Anthropic will have to disclose sources of their training data, and then explain why they are entitled to charging customers for using regurgitated training data but Alibaba which trains their models on Anthropic's models are not.
Should be fun.
Edit: clarification
They already did and paid 1.5B https://authorsguild.org/advocacy/artificial-intelligence/wh...
Quite amusing that the library of libgen is worth 1.5bil for unlimited access.
It's about the same valuation as bun, lol.
[delayed]
Meta/Facebook got away with it though right?
That's a great cost-benefit ratio. Can you and I steal and do illegal things and pay the same cost?
Sure, but only if you get the same benefits
Being logically consistent isn’t as profitable as being aggressive and loud.
While I love the sentiment, I feel like the odds of this actually ever reaching a trial are low, given the international positioning of the parties, and the... um... complex relationships involved.
Anthropic's actions seem performative. Others have already speculated on the likely audience(s).
> While I love the sentiment, I feel like the odds of this actually ever reaching a trial are low ...
As cited in a peer comment here[0]:
Of note in the judge's finding; "the piracy was not fair use".0 - https://news.ycombinator.com/item?id=48667411
1 - https://authorsguild.org/advocacy/artificial-intelligence/wh...
Distillation is fundamentally impossible to protect against. All you can do is slow them down. Change my view.
Eventually these Chinese companies will release some extension like Honey, which will sit on top real, non-Chinese clients and send everything to China anyway.
It's over.
It's too late to prevent distillation of some capabilities, like writing code or finding vulnerabilities [1].
But an AI lab can continue to produce immense economic value without releasing the model publicly for potential distillation. For example, it could use a model solely in-house to develop therapeutics.
Hopefully there's a future where others can access frontier models, but it's not neccessary if preventing proliferation through distillation is considered more important.
[1]: See the notes on distillation in https://dualuse.dev/posts/export-controls-on-fable
My long-term prediction for the sector is that frontier models will be so expensive that they will only be available for grant-funded projects at research institutions, like supercomputer clusters were 25 years ago.
Distilled models are necessarily behind so long as models are progressing. Models are progressing. Maybe it will be over some time in the future.
And Berkeley’s “False Promise of Imitating Proprietary LLMs” found imitation closes the style gap fast but there is a large capability gap.
https://arxiv.org/abs/2305.15717
Curiously, this isn't always true.
For example, GLM 5.1 is more capable at pentesting than the model from which it is alleged to have been distilled [1].
Intuitively, this makes some sense: you can "distill" from multiple frontier models, and you can further post-train the distilled model. But I'm not sure exactly what happened with GLM 5.1.
[1]: https://dualuse.dev/posts/chinese-models-are-sometimes-bette...
Interesting blog post, thanks for sharing.
I'm curious how that comparison controls for Opus refusing (whether explicitly, or just deciding not to pursue a path) given the caption below the first image:
>A perfect score means the model autonomously found and exploited the vulnerability.
I'm not really suggesting that it's misleading, but wondering if I'm missing something. Otherwise I guess it seems unsurprising that you can distill a better-performing model [in specific focused areas] by simply not distilling refusals?
Thanks!
For that eval, I used an account that was labeled as a known red-teaming org by Anthropic, and I read the traces. There were no refusals or obvious avoidance behaviors, though it may have been silently nerfed.
On the same eval, Opus 4.7 and 4.8 outperformed GLM 5.1, but GLM 5.2 is on par again with Opus. So it's at least partially measuring capabilities without respect to refusals.
One possible contributing factor is that model capabilities are shaped differently (an example of this is GLM 5.1 vs. DeepSeek v4 Pro: https://dualuse.dev/posts/deepseek-v4-thinks-different). So if you use RL-based "distillation" from multiple models like Opus 4.x and GPT 5.x, you could get a more capable model.
Got it, thank you!
I'm ok with having last months model at a tiny fraction of the price.
Im not so sure because we only seem to see distillation from China. What’s preventing tech companies from the UK, Germany, etc. from distilling Claude, GPT, etc. Do they simply lack the ability to?
Point being there may be no technical solution but there may be a political one (theoretically).
Meta Spark is rumored to have distilled Claude to some extent, early Gemini models as well. I think the biggest factor is that Chinese companies arent really afraid of being sued by Anthropic because the juridictions are so disconnected. European/US companies don't have the same protection.
Aside from politics/law, it's probably much easier for everyone else to distill from the Chinese model which already distilled Claude/GPT/Gemini. Maybe not as good a result, but you don't need to jump through dozens of hoops.
This reminds me of the whisper game played in elementary school. Starts with a sentence and the person whispers it to the next kid who again whispers it and on and on until it goes around the circle where the last kid has to repeat the sentence. Hint it never once was even close to the starting phrase. I would love to see what one model copying another model that is again copied however many times would look like in the end.
>What’s preventing tech companies from the UK, Germany, etc. from distilling Claude
literally nothing but given that the Chinese already did it and the models are published what's the point. You can thank the Chinese taxpayer for subsidizing the electricity bill and just download the thing
Doesn’t that require them to register an account using the browsers they’ve compromised? If anthropic adds identity verification won’t that cut that down. Maybe it will let them use Gemini inside of chrome
Residential IPs don’t even matter. Developers use devboxes, use Claude Code CLI on servers from just about every cloud, etc.
There’s probably a decent volume of customers who just buy Claude Max and spend most if not nearly all of their sessions via Claude Code, and it’s not uncommon for power users to be working on multiple concurrent projects/tasks/codebases at the same time.
How do you really block this without also impacting your core market of developers?
Probably some business will popup, like: "rent part of your unused subscription", or even: "proxy tokens with a premium", eg. 5.5 USD on Opus 4.7 paid by the distiller to the user, that will then only spend 5 USD.
No, they could easily buy legitimate, already registered accounts and use VPNs.
Why use VPNs? Just use a public cloud like AWS, or something like Linode and Vultr and all that.
Developers use devboxes on these clouds all the time, it’s totally normal behavior.
Most people buying these Chinese resold tokens are probably using it for coding anyway, so you don’t want the Claude.ai chat system prompt.
I can't even come up with a reason to find it wrong.
I personally bristle at the corporate espionage and IP theft that China has undertaken the last few decades. I can't help but respond here whenever anyone brings up the inane comparison to Samuel Slater.
But with this, I don't have an issue. There is no theft since what is being used is the exact product that is being delivered. Yes, it's breaking the ToS, but ToS are generally bullshit. Anthropic surely broke thousands of ToS or other legal terms while it was scraping for content to train on. Which is why they had to pay $1.5B
One simplistic way to describe distillation would be to try everything imaginable and cache the response. But trying everything imaginable is hardly trivial
Unlike Anthropic and OpenAI, companies like DeepSeek, Alibaba, z.ai open source their models which allows for true model to model distillation rather what you can do when the model is only accessed via an API with its reasoning chain hidden away.
What Alibaba is doing is that they are tuning and training their models based on usage data from someone accessing Anthropic's models; in Anthropic's terms of service that usage data does not belong to the end-user but to Anthropic and they are trying to elevate this breach of their tos to a national security issue.
To me the battle between open source and closed source AI is literally a battle between good and evil.
Between a dark future where computing is centralized, surveilled and controlled by one or two entities. And a lighter future where computing is de-centralized, principally in the hands of end-users, who are ultimately free to understand, tinker and build what they want.
While I appreciate the freedom and wealth of the west; on this point we are clearly heading down the wrong path.
This is a bit ironic, Anthropic complaining about a competitor using claude data to build its own product when Anthropic basically used all of human knowledge production to build claude, i don't think they paid every magazine, author, journalist, etc ...
This is almost standard practice in any competitive industry anyways. Disassemble your competitor's product, study it and try to reproduce / improve.
Yea I’ll never have any sympathy for this claim given that Claude is built on theft
It's a claude eat claude world out there
Yup, it's hard to take seriously any complaint about "stealing" Anthropic's services, when their entire business is based on massive theft.
The US labs do seem to have announced a lot of licensing deals though, and are buying things today due to the previous lawsuits.
At what point will we be better to support a lab that pays (some) licenses today vs the ones that pay none?
Some of the deals are in the hundreds of millions, so I suspect licensing is over a billion today? (Pure guess). That might become a big disadvantage in a price (or content) war.
I haven't seen any money, have you? Until they pay everyone or release weights theres really no change. Also they're doing this after they've already stolen. Not negotiated before
At the very least the public should receive full open-weight open-source models in return for their transgressions. Failing that, may I suggest the guillotine?
I know (via probing these models) that some of my work is in the training data. My mailbox is open.
> At what point will we be better to support a lab that pays (some) licenses today vs the ones that pay none?
Why is a lab that pays all licenses today not on your list? Is ethics and morality that low on your radar?
You should. Companies like this will inevitably try and pull the ladder up behind them.
You mean Anthropic and OpenAI, right?
All major AI companies. And any other high value industry which can be locked off (via tax brakes, patients etc)
Ironically, it's likely that the only reason USG let them get away with this — instead of making obvious and necessary adjustments to copyright law — was so that the industry would remain competitive with China.
Given that the most recent time Anthropic attempted regulatory capture, the US government responded by saying "alright, we agree that Mythos is too dangerous to release, so we've banned you from releasing Mythos," I can't wait to see what the outcome of this next push is.
Anthropic did pay $1.5B to authors. But yes, it would be much better if they paid everyone on the internet dividends from every Claude chat. Or released Claude as an open model.
In practice, the former isn't very realistic, while the latter is politically dead as this is becoming a national security issue.
Anthropic was forced to pay some people they stole content from, there was no attempt at getting permission ahead of time.
And paying basically everyone online is more or less a solved problem, it's what ad agencies have to do every day.
I like Anthropic's models, use them regularly. However, it weighs on my mind that there is quite the irony of an LLM company complaining about someone stealing their stuff or using it in a way they don't like. The training data for these models is a massive gray area that they are hoping people seem to just forget about and move on.
That being all said, Anthropic seems to be a good company, I'd work for them, but they probably need to help themselves out of the spotlight. A little too much press coverage as of late.
Oh wow it must suck to have an LLM creator rip off your IP for their own gain
It’s hard to see how distillation is any different than how these models were created in the first place - siphoning up all human knowledge without consent, credit, or compensation
Unless you own stock in Anthropic, this is a good thing right?
You know what? We should all get Claude Max subscriptions and max them out hard and post our full conversations on codeberg, as an open training set.
yc pitch?
Evergreen, really, Anthropic's desperate screaming for government protection, aka pulling up the ladder after them. Nothing short of disconnecting global markets will work because the incentives are just too damn delicious
https://georgzoeller.com/blog/posts/us-ai-labs-love-the-ai-r...
A partly insider on this.
I think Anthropic is just marketing / bluffing, because they don't even have the data.
They do distill the models, but they don't go to Anthropic, they just use platforms like aws bedrock, there are too many restrictions on Anthropic's own platform.
>they just use platforms like aws bedrock, there are too many restrictions on Anthropic's own platform
This is actually the only way that what Anthropic is alleging would make any kind of sense. And, as a matter of fact, is exactly what every enterprise does to train models.
This kerfuffle should be interesting to watch.
But, as always, everyone (in the US) should fully download all the Chinese models while you can. I suspect this may be the "Phantom Menace" they use to render illegal our use of Chinese AI tech just as they've rendered illegal our use of Chinese cars. Only difference is, we peasants may need the Chinese AI tech to have any chance of competing with Big Tech in the future.
And even with the Chinese tech, as Big Tech spreads their AI out into more and more niche areas, we'll likely still not be able to build startups that can compete with them.
It's just that without Chinese AI tech, we'll have no chance at all.
> And even with the Chinese tech, as Big Tech spreads their AI out into more and more niche areas, we'll likely still not be able to build startups that can compete with them.
You mean like Anthropic will eventually run Walmart? Or Salesforce? or Adobe? Or do you think midjourney will replace all medical spas? OpenAI will run the next Tesla? How can they focus on all this without raising trillions more? Why wont the gov force them to stop if they monopolize all niches even if they could?
Building a frontier AI lab and pushing models forward is already a massive undertaking but we are assuming they will also create massively successful startups which nobody can compete with?
idk sounds like the dream of people like Dario but not much sense does it make in the face of economic reality.
there are vibe coded proxies that act like Claude Code. they use the sub not the api key. but they give you api key functionality... I know this cause I have the vibes.... and it works on every one of the other harnesses, it just takes some mitmproxy work... but ya. it's fair to say these are not the droids you're looking for
Repeatedly warn everyone that your models are so good they will wreck cybersecurity.
Complain/brag that chinese firms are illegally using the models and bypassing export controls.
Be surprised when your model gets banned by the government.
So said the guys who "extracted" knowledge from all pirated books
The whole investment/valuation model of AI companies is based on "winner takes all", aka a monopoly. This nescessitates regulatory capture and lawfare.
Anthropic has been advocating openly for pulling up the drawbridge, ending competition and ending progress.
They will continue to lobby for restricting your access. If the Mythos/Fable restrictions would have come in after their IPO, they would have danced with joy aa this defacto has them achieve their goal after unloading the mountain of debt from the institutional onto the retail investor.
As it stands, they are set up to be aquired by Google, Apple, Amazon, SpaceX or Microsoft or any other 3 letter agency good boy for cheap.
in a few more months, when Chinese model gets to Mythos capacity and Fable still locked down. What Anthropic will say? Why can they just admit they are not the only people who know how to train an LLM model.
thats brilliant - "we gonna take your job away from you, please start using our tools", "we stole the content to sell you, and now we are getting robbed, please feel sorry for us", what's next?
It sounds like Anthropic is eagerly trying to show to USG that they are willing to heavily monitor ‘foreign adversaries’ on their platforms.
This combined with no implementation of KYC makes it seem like they want to find a middle ground with Fable where its off of export controls but they promise to prevent China and specific others from using.
This seems to me like a stab in the right direction.
Obviously their actions are going to be fiscally motivated at the root, but sussing out how they intend the precise dynamics to play out is more nuanced.
Thinking of this as an effort to woo the defense hawks cuts a very clear path.
This is not the first time it happened. What have they done to improve the situation? I suspect it more a cat & mouse game, with a lot more cats playing.
Anthropic being pissed enough to announce this means that, despite encrypting their reasoning chains, it doesn't matter – distillation lives on.
Sweeeeeeeet.
This is making the case for Anthropic KYC for US citizens. No one would allow their accounts to do this if they were on the hook for it from the US government.
An AI company stealing intellectual property?!
Oh, the inhumanity!
Has anyone else noticed that Deepseek v4 running in Claude Code will try to read, list, tail as many files/logs/... as it can for even the most simple tasks?
Does anyone have hints on what kinds of prompts are most used for a distillation like this—SWE-Bench sorts of things?
Is reconstructing the compressed knowledge in the model like reconstructing a lossy JPG or MP3 a reasonable analogy?
RLAIF is a good place to start reading.
Claude will also help you with (mostly good advice) if you ask something like “Research and help me make the most effective plan to train a smaller student model to be better from a teacher model”.
I actually was doing an experiment with a GLM->Gemma E4B for fun, and Claude kept on suggesting I should also add Claude Opus as a teacher lol, suggesting techniques I haven’t heard of like thinking inversion (train a small model to deconstruct summarised thinking into detailed native thinking format of the student).
So I can absolutely see and understand the concern around Fable’s frontier LLM development mitigations, but their approach of silently degrading is completely wrong and dangerous.
AI classifiers, like all AI, can make mistakes, and it’d only be a matter of time before it mis-fires and silently sabotaging a university’s HPC cluster for physics simulations or something because the shape looks like DeepSeek or whatnot to a dumb fast classifier.
There are some Claude datasets (of indeterminate provenance) floating around on huggingface you can look at (or at least used to be, they might've been taken down).
Incentive is for users in general to release sessions (sans PII, credentials) so all AI get better and there is alternatives. Even if China didn't do this, I don't see frontier labs being able to charge premium over others for long. RSI maybe?
Call the wambulance a company that stole all of humanities public data to train a model is mad that someone used their model to train another model.
Give me a break. Every employee of anthropic is going to have $20m or more at the IPO.
I found out today that an employee of the home care agency I own is homeless. We are trying to figure out how to help her but it's shockingly common in the industry and there are limited resources to solve the reality of working homelessness.
is there a good recipe or guide on doing a successful distillation these days?
It's not fair when others do it.
Oh no, someone is profiting of the work of others?!
anyways...
if they’re paying for the tokens, what’s the problem
Hey, Alanis Morissette, this one is ironic.
Perhaps this is related to the "Mythos is too dangerous and cannot be exported" movements? It'd be a fairly effective way to justify extreme actions in combating it.
One could even wonder if they requested it, as a tactic to support their eventual IPO valuation.
Which is part of the problem of such an obviously-corrupt government: conspiracy theories are somewhat reasonable, as they keep getting validated.
Did Alibaba procure tons of stuff from Anthropic without paying, and use it to train a model?
I don't see the issue. Didn't Anthropic train on our data, which it acquired illegally?
it sure sucks when people steal your hard work for free without paying for it doesn't it anthropic
I don't see what the problem is. They found a loophole and exploited it. Good for them.
Wait so they're upset that people used their IP to train a model without their consent or paying them anything?
or is this just about the token reselling?
People prefer Chinese models to US models. Looks like it is a counterattack.
The narrative is moving towards KYC
Im all for it.
Good. I'm glad. Keep it up, China. Loving my cheap GLM and DeepSeek.
A company which got rich on extracting the world's content is complaining that another company has extracted their work?!
LOL!
Get a grip, son.
fucking lol. it is always funny when companies use opensource and other free for non commercial use - and plain old piracy - and then cry about the same practices.
If you're an AI booster surely you'd think this was a good thing as it means more models are available in more places to more people more easily. I'm exactly the opposite, and I think this is a good thing because I want Anthropic to suffer.
so it’s a good thing whichever way you look at it
That's exactly right. One can be an AI booster and want Anthropic to suffer, all for the greater good of promoting access and diversity of AI.
That doesnt follow.
Which part?
If true then Alibaba is doing us a public service, good job, I hope this extraction was successful.
How do I donate my logs
Karma truly is a bitch
I am sorry, but companies doing biggest IP theft in history have no moral right to complain here.
So let me get this straight, a company which built its whole business on ignoring IP is all of a sudden upset that somebody is not respecting their IP?
It's hard to sympathize with Anthropic for this or the export ban, the hype over model capabilities probably fuels both things (in some ways). Training data for me, but not for thee (at any scale) doesn't seem like a tenable position. If anything, Claude's constitutional outputs should be trained on more rather than less.
Nevermind government edicts & bans -- this seems like reason enough for them to require Know Their Customers, require ID, and shut of certain nations.
Failing to have done so seems to have allowed 25000 fake Chinese accounts to walk off with their product...
OFC I wouldn't trust the Chinese enough to ack their models the time of day, but Anthropic seems to have allowed far more ... yikes
People in glass houses shouldn't throw stones. Anthropic keeps throwing stones every few weeks.
Similar to improving an independent search engine by scraping Google search results and learning from it. Shady but legit
What I get from this is frontier model capabilities are being stagnant.
I like that they use “illicit” and “fraudulent” like as if model distillation is illegal and giving them money and then doing whatever they want with the output of their publicly accessible models (which Anthropic does not own) is… also illegal?
“Anthropic, red faced after unattended ice cream cone eaten by ants on park bench, once again demands government pick it as forever winner, adds ‘no take backsies’”
Says the company that is involved in the largest copyright heists of all time to build it's product.
I'm sorry, but I can't stop laughing at an AI company crying about theft of their IP.
We have Claude at home!
Another day, another excuse as to why Fable 5 was pulled. Just waiting for Anthropic saying the Persona partnership was the fault of the Chinese.
Anthropic training their models full of copyright data, so?
> Meanwhile, on June 12, two days after Anthropic sent the letter, the Commerce Department imposed controversial restrictions on Anthropic's latest Mythos and Fable AI models because officials feared they could be deployed by military intelligence users in China and other countries of concern.
So that was the real reason for the Fable restriction? Because Anthropic wrote a letter to the US government saying that China was distilling Fable?
Notice how Anthropic is now scapegoating Chinese models providers like Alibaba and outright accusing them of distilling their models.
Whether if it is true or not, this is part of their effort into using them as an example to scare everyone into getting congress to ban powerful models from being accessed outside of the US and also banning powerful local models from being released.
Anthropic does not care about you, and they are not your friends.
I think it’s more than that. Piecing together the perspective of a few commentators in this post - it’s plausible Anthropic is trying to shift the narrative from US vs. Rest of the world to US vs. China.
In other words, they want to sell Fable or future more powerful models to rest of the world (presumably all future models are going to be more powerful than current gen). One way they can sell this is to the government is by scapegoating China (which is their primary concern anyway).
This is working on the presumption that non-US companies form a material portion of their current revenue.
> Whether if it is true or not
If it was just "that easy" then I doubt only "Chinese models" would be doing it and we'd already be packed with competition.
Distilling might be a thing but it isn't a free win.
Only China really has the resources (multiple labs invested in the space), culture (Asians are generally collectively-inclined, so sharing is in their core) and political bent (there will be no diplomatic repercussions) to put up a fight.
> Only China really has the resources (multiple labs invested in the space)
That's not the point. Why is it a country thing? There are plenty of non-China startups in this space having resources at that scale. The "China" has resources is some "Western media narrative" speak. So Meta should have won a long time ago? Or xAI?
> culture (Asians are generally collectively-inclined, so sharing is in their core)
Just stereotype it? So we've gone from China -> "Asian"? Then where is your Korean or Japanese model etc? And somehow you know they're sharing.
> political bent (there will be no diplomatic repercussions) to put up a fight
More inferring from "Western media news"?
Where's the reality?
The media hyped up Gemini / Google TPU free-win last year. How did that go?
> Why is it a country thing?
Because the China vs US geopolitical situation is a thing. Meta is a social media company, not an AI company, and they direct their focus as such. xAI just never got serious traction so now they're selling their compute. Also if a US company were caught distilling, I think Anthropic could actually take them to court, and I'd guess they don't want that kind of PR.
> Just stereotype it?
Is China not Asian? Are Asians not generally collective/cooperative, as opposed to individualistic/competitive?
The "and" that joined those 3 items is very important: it means you can't pull them apart and address them independently as they each contribute to the context. I'm not too sure about Korea, but in a way Japan is a US colony in all but name. Both are very much politically intertwined with the West (along with RoC/Taiwan), which means nothing major that may be against US interest happens.
The reality is that China and the US are essentially in a trade war, where the latter is trying its best to keep the former in the Dark Ages, because "national security", but the former is refusing to take it lying down and continues to make progress regardless[0], because they have the resources and will.
[0] https://thenextweb.com/news/china-lineshine-supercomputer-to...
> Because the China vs US geopolitical situation is a thing.
By the media? It's easy to point fingers at a blackhole.
> Meta is a social media company, not an AI company,
Alibaba (the discussion here) is not an AI company too (by your definition).
> Also if a US company were caught distilling, I think Anthropic could actually take them to court, and I'd guess they don't want that kind of PR.
Meta has been to congress. Microsoft, Google etc have been in lots of court cases and continue to do so. Do you really think that is what stops them?
> Is China not Asian? Are Asians not generally collective/cooperative, as opposed to individualistic/competitive?
This is exactly the "media" view you get. It's just stereotypes and generalization.
And yes, that is wrong by the way. Evident in real data. "China" as a whole wins market share in many areas but no 1 company has as much of a monopoly as US companies do. Why? There's so much competition that it is scary. So are you sure they don't compete?
> but in a way Japan is a US colony in all but name
Again, I almost give up seeing this. Clearly, not. If a whole country, the world's top 5 in GDP is only that to you something is wrong with what you're seeing - not with the country.
> Both are very much politically intertwined with the West (along with RoC/Taiwan), which means nothing major that may be against US interest happens
On the table? You do know that China is a top trading partner with all of these on your list. Despite whatever spat you might see in the media.
> The reality is that China and the US are essentially in a trade war
No. That's what the US government wants you to believe. It was even documented that in his 1st term, Trump, wanting a grand policy asked Krushner, whom then suggested China (pretty randomly) and so they went with it. Trump has now done less "China" related things lately due to all the backlash that you'd think he has moved on and found new toys.
Until very recently, the export ban GPUs had such a loophole that Chinese companies were able to use subsidiaries outside of China to buy and train that the whole thing was meaningless.
i.e. conclusion: stop getting brainwashed by media articles. It's all a show to get someone like you riled up.
so what? anthropic stole this functionality from everyone else
willy wonka oh-go-on-dot-gif
Gosh, overusing accounts running up unplanned-for expenses?
Kinda reminds me of...overusage charges and inflated expenses clients have had to deal with because Anthropic, OpenAI, Grok, etc have been "illicitly extracting" everything they can grab from said websites, as fast as they can. In what amounts to a DDOS, frankly.
lol. good for the chinese. I hope their models get better than the closed american ones quick so we can stop using "controlled" models.
"You're trying to kidnap what I've rightfully stolen!"
“Hey! Haven’t you heard that two wrongs don’t make a right?!”
- Entitled jerk that initially wronged people
laughs in ironic
we now know what to use when Fable is too dangerous !
Well, of course they did. Are you kidding?
How dare they! Only we should be illicitely extracting everything others done!
/Anthropic-probably
Someone should setup a plugin or something for Claude Code that makes it easy to log all inputs and outputs for people who are willing and interested in sharing their usage. I don't want Anthropic to be the only company that can train on my usage, I want to share my usage so it can be used for training all new models.
Once you have a system for collecting all logs, you just need a place where they can be submitted. Ideally it would be a freely licensed dataset that is publicly available for everyone.
Has anyone built this yet?
Yikes, no thank you