Y Combinator’s Garry Tan says 'do nothing' about distillation as AI giants accuse China of copying their tech

Garry Tan, CEO of Y Combinator, argues against taking action against model distillation (the process of using outputs from a capable AI model to train a smaller one), despite concerns from OpenAI and Anthropic that Chinese companies are copying their AI models. Instead, Tan believes regulators should focus on maintaining a balance where open-weight models (freely available AI models) give people access while frontier models (cutting-edge AI systems) retain pricing advantages to stay profitable.