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

At Y Combinator’s annual Demo Day, CEO Garry Tan explained why he's less concerned about frontier AI model distillation and the existential risk of AI.

Y Combinator’s Garry Tan says 'do nothing' about distillation as AI giants accuse China of copying their tech
Speakers from left, Brett Gibson, Initialized Capital; Jen Wolf, Initialized Capital; Garry Tan, Initialized Capital, on Venture stage during day one of Web Summit 2022 at the Altice Arena in Lisbon, Portugal.

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At a time when some Silicon Valley giants and national security experts are calling for action against Chinese companies engaged in model distillation, Garry Tan, chief executive of famed startup accelerator Y Combinator, is less concerned.

"I would do nothing" about distillation, CNBC's Kate Rooney at Y Combinator's annual Demo Day. "We could argue that there should be an American distillation regime. "

Distillation is the process of using the outputs of a more capable AI model to train a smaller or less capable one, sometimes illicitly. It has been a for frontier model developers, namely OpenAI and Anthropic. Anthropic Chinese companies such as Moonshot AI, DeepSeek, and MiniMax of the practice, while DeepSeek's V3 and R1 model architectures were distilled from its own GPT-4 and GPT-4o models.

In the midst of this, the U.S.'s National Security Agency, Cybersecurity and Infrastructure Security Agency, and Federal Bureau of Investigation released an

Tan acknowledged that this is a hard balance to strike, calling it "a tightrope. " Nevertheless, he says it's a balance worth pursuing — saying it "could result in the best possible outcome. "

Tan also touts a more restrained approach to AI safety, where recent doomsday headlines tied to the have led to from the public over the existential risks of AI.

"We need to be focused on science fact, not science fiction," he said. "We need to be responding to what is happening right now. If there was a breach and a coordinated attempt by agents to take over our infrastructure, what do we do about it? "

Cybersecurity is a risk that Tan sees as imminent. And there are other risks that are both near-term and existential. For example, on Thursday, Anthropic reported that it blocked Claude access for five cases of scientists in unspecified foreign countries who were using the models to do research on dangerous pathogens. Anthropic feared that these researchers were covertly using Claude to create bioweapons.

Other risks, however, have a longer timeline. Tan believes that AI-related job loss and economic transformation will not have an immediate impact. Rather, he foresees that over time, people will transition towards automating rote tasks and spending more of their working hours on creative pursuits.

"It will take decades for this to actually percolate into society, and that's not a bad thing," he said.

That longer timeline hasn't stopped Y Combinator from investing in AI right now. Of the 196 startups presenting at Demo Day, 149 were categorized as machine-learning and AI ventures. 

CNBC Verified Source

Reported by Kate Rooney,Isabel O'Brien · Syndicated via official news feed

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