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Sequoia warns: The US may win closed-source models but could end up losing the open foundation base

MeNews
ME News, July 17 (UTC+8). According to Beating monitoring by 动察, Sequoia partners Dean Meyer and Konstantine Buhler said in a post that the United States holds leading closed-source models, while Western companies are increasingly relying on China’s open-weight models. Qwen, Kimi, GLM, and DeepSeek are being used as product foundations, to train teacher models, and as sources of synthetic data. ATOM’s report shows that Qwen’s share in newly added monthly fine-tuning and adaptation models rose from 1% in January 2024 to 69% in February 2026. Thinking Machines’ Inkling also used synthetic data generated by open-weight models such as Kimi K2.5 during the early post-training stage. However, this portion only accounts for a small amount of training compute. The article argues that the issue lies in the “distillation” rules. Distillation uses a strong model’s outputs to train another model. OpenAI and Anthropic restrict customers from using model outputs to train competing products, yet American companies can legally learn from China’s open models. The two suggest that U.S. frontier labs should sell qualified companies controlled, delayed, and auditable training rights. Otherwise, the U.S. may continue to lead with closed-source models while handing the open-weight model base to China. China has recently discussed limiting overseas access to some advanced models, but no final policy has been formed yet. The article warns that even if existing models can still be downloaded and used, Western companies may gradually fall behind because they can’t get subsequent versions. (Source: BlockBeats)
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