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Nvidia is acquiring Hugging Face and absorbing Poolside's engineering team in a major open-source consolidation. Jason Calacanis argues this positions Nvidia as the dominant US open-source AI champion, directly competing with Chinese labs like Kimmy and DeepSeek.
Dmitri Alperovitch claims Chinese AI developments remain perpetually six to nine months behind US technology. For example, China's prominent Kimmy model cannot compete with the US's Mythos model, which was trained in February 2024.
Jason claims major customers are abandoning frontier AI labs for open-source models like Kimmy, citing costs up to 90% cheaper and concerns about intellectual property theft, while Sacks notes leading labs still show strong revenue growth.
The debate intensified with the introduction of Kimmy, a powerful Chinese AI model, which performs comparably to leading closed models despite being open-source software.
Ben Horowitz states that various software companies, customer support services, and specialized applications benefit from cheap intelligence offered by open-source models like DeepSeek and Kimmy, with virtually all AI application providers utilizing some open-source component.
Moonshot AI, maker of Kimmy, is preparing a Hong Kong IPO within six months after its K3 model outperformed many rivals, driving its annual recurring revenue to $300 million in June. Bitcoin's price is reportedly trading as a proxy for the AI capital cycle.
Kim observes M&A is rising as overvalued private companies use their stock as currency for acquisitions, similar to Cisco in the 90s, while legacy SaaS firms trade at low multiples due to AI fear.