Also frees up more compute for recursive improvement, and gives them leverage over USG (makes regulatory & legal & other issues disappear) due to the frontier being significantly more effective for military use. There's a lot of chatter around distilled models being "close" to the frontier, but realistically they are optimized only to look good on benchmarks - and are still 6 months behind Anth / OAI models at that.
Also frees up more compute for recursive improvement, and gives them leverage over USG (makes regulatory & legal & other issues disappear) due to the frontier being significantly more effective for military use. There's a lot of chatter around distilled models being "close" to the frontier, but realistically they are optimized only to look good on benchmarks - and are still 6 months behind Anth / OAI models at that.
If the US government is a monopsony buyer, why would it choose to pay high prices?
Because (a) it prints money so why not and (b) the model actually has some capability it doesn't want anyone else to be able to access.