FULL DISCUSSION: Alibaba Chairman Joseph Tsai Debate on AI Economics, Open Source, Power & Profit

Don't you think the issue is the economics? You're spending billions of dollars to build this model and if you open source them you're not really monetizing it in the way that you can potentially monetize it. So that's why most of the companies are focusing on closed source to try to generate as much profit from the model and then they open source the older versions. We've seen that with Grok for example, we've seen that with even Llama and other models in the US where the frontier ones are closed source until they're able to generate some revenue or at least some advantage whether it's getting market share or otherwise. Do you think that is the main reason or is there more of an ideological shift and can China sustain making all these models open source especially the frontier ones?

I mean, I think the reality is that when you adopt an open-source model, you're going to need, as Joe said, all of these other things. You're going to need power, you're going to need infrastructure, depending on the solution that you use. You're going to need a lot of natural resources, specialty chemicals, you're going to need battery systems, and then you're going to need all the know-how. And then on top of all that, you're going to need the capital and the financing. And so, I think the reality is that the business model becomes more at the governmental level almost because if you take an open source alternative, but then the infrastructure of the government can come in and help you with all of these other things, you're going to take it. And so I think that is yet to play out but I think that's the real opportunity. Similarly in the United States it's all private. So the alternative is you can't really take a spin of Grok or take a spin of Gemini and implement it on your own for the needs of your own population. But yet you still have to bear the cost of all of these other things. So if all of this was packaged and financed and turnkey and in a box I think that's the ultimate best solution. That's probably where international finance organizations and development banks probably need to play more of an evolving role over these next 10, 20 years.

Many of the conversations that I currently have and interviews that I would do and I'm sure that you guys will go through the same thing. People talk about the AI bubble and the bubble in a sense of is it sustainable? Can we keep seeing the numbers that we're seeing? We've recently seen the issue with memory and memory availability and not being able to produce memory enough. And when it comes to bubbles I think there are two types of bubbles. There's the tulip mania bubble which was completely made up. It blew up. People lost their money and there was nothing left except the legacy of the bubble. And then there's the train and railway bubble of the UK of the 19th century where people went and invested in railway tracks which gave the UK the legacy of being one of the most connected places on earth through railway. So there was actually a tangible legacy that was left behind. In terms of tangible legacies for artificial intelligence, if and I'm not saying it is a bubble but let's assume that there was a set of bubbles along the way of the progress of artificial intelligence, do you think that energy infrastructure is that, so is the safe bet investing in energy infrastructure, is a safe bet investing in chips?