China's Open-Weight AI Gamble: Free Models, Expensive Reality

China’s open-weight AI push isn’t open-source software; it spreads capability but rarely generates profits because each extra user inflates costly compute and data-center needs, so model creators earn little from the models themselves. Firms like Zhipu (GLM 5.2) and MiniMax posted big losses on modest revenue, Moonshot paused sign-ups after launching K3 due to lack of compute, and most money comes from hosting/inference rather than selling software. Intense domestic price competition compounds the problem, shifting profits to infrastructure operators. Still, Beijing’s openness rhetoric and policy backing suggest a longer-term strategic objective, even if near-term profitability remains uncertain.