> have consistently been keeping up with (albeit a few steps behind) 

    > Hardware capacity is a separate issue entirely.

> I mean, this sentence is self contradictory, no?

By benchmarks, the Chinese models are ahead of where the proprietary US models were ... something like 6 or 12 months ago. And all the benchmarks are a bit fuzzy anyway on whether a small gap is trivial or significant. The Chinese aren't having any problems keeping up on model quality. The gap isn't going to lead to any difference that matters unless the US pulls a rabbit out of it's hat.

Plus dollar-for-performance they might be leading in practice, it is hard to compete with self hosted.

You can keep up even if you’re behind. If someone is running a race and you’re constantly two seconds behind their time, you are steps behind but keeping up.