> Their competition has the same problem. They're engaged in a giant game of chicken (or giant game of "who runs out of ability to raise more cheap capital first") with respect to overspending on training relative to inference revenue.

It's a sort of weird chicken game in that there's a meta-chicken game going on too — they are both, sort of separately, betting that the outcome of their chicken game will be too devastating for the US economy for it to be allowed to happen.

(I say "sort of separately". But the one guy used to work for the other guy. You know how people who split up from partners spend the next few years trying to shake their ex-partner's framing of the world? They know each other's thinking; they are aligned where this meta-chicken game is concerned)

They don't need it to actually be devastating. They just need sufficient fear of it.

Especially if it is finely calibrated enough that they get to continue at a slower pace, but end up with enough expensive red tape to slow down upstart competition more because of high compliance costs.

If they can't beat OpenAI etc., the second best is to near-freeze market shares in place at a lower rate of investment - hence my comparison to cloud providers where none of the big providers makes too large reductions in prices etc. because they all know they'll all lose on a price war.