Distillation debate: is Chinese AI pricing 'involution' or rational catch-up?

teortaxesTex · x · 2026-10-30

Economist jingyanghk argued that hyper-competitive pricing pushes Chinese labs toward shortcuts like distillation — the 'involution' dynamic. teortaxesTex pushes back hard, calling 'involution' a thought-terminating cliché: distillation is the natural response to international competition, since US labs lead on compute and data quality, and Claude remains popular in China. Screenshots show a Go subscription dashboard where monthly limits were exhausted on DeepSeek V4.1 Flash (28,030 requests, 6.884B tokens), plus a Claude plan value breakdown: Max 5× delivers 6× Pro's session limit and 8.33× weekly credits, worth 13.5× its $100 price in Opus-rate API equivalents, with free cache reads sweetening agentic workloads.

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