> China can keep up because it's cheaper to run a frontier lab there

Not sure if this is what you meant, but their training runs are significantly cheaper. This was one of the big shockers from the Deepseek R1 paper. US foreign policy has helped to ensure that the Chinese are compute constrained, so they literally cannot buy the most expensive and powerful training rigs.

This has led to a steady drumbeat of innovations which are not revolutionary on their own but stack together to make things much more efficient.