> And how second movers (open Chinese labs) can disrupt them

Yes, I will concede this point. But how are the Chinese labs going to thrive with giving the weights away for free? Will they suffer the same fate open source database companies did at the hands of AWS?

For the companies it's not clear.

For the state, like BVD, the goal is to be a loss-leader for Chinese infrastructure + manufacturing.

If the model is commoditized then the AI race becomes competition over building infrastructure to support it. China is very good at building infrastructure.

They don't need to run a business, they are a Chinese state enterprise. The tax dollars of Chinese workers covers the cost. China is a communist country with mock free enterprise, it is not the team blue version of the US.