AI Summary
5 min read“The recipe to build these things, there’s no secret sauce,” says Charlie O’Neill, co-head of model training at Base 10. “The big labs, they don’t have anything that the open source labs don’t have.” He’s talking about Kimi K3, a model released by Chinese startup Moonshot AI that has rattled the AI industry. On some benchmarks, including front-end coding, K3 beats the best models from OpenAI and Anthropic. And it costs roughly a third of what Anthropic charges for its flagship model. The Nasdaq fell about 1.5% on the day of the release as US tech stocks sold off. But O’Neill argues the real story is not China versus America. It is open source versus closed source—and the economics of intelligence are about to change.
Open Source vs. Closed Source: What’s Actually at Stake
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What you'll learn
- 1 (02:18) **Episode Intro & Market Vitals** - Ed Elson recaps the previous day's market moves: S&P 500 and Dow down (Middle East conflict), Nasdaq flat, oil volatile.
- 2 (03:48) **Segment 1: The Strait of Hormuz Crisis - Expert Analysis Begins** - Ed introduces Matt Smith, Director of Commodity Research at Kepler, to explain the unfolding oil supply crisis.
- 3 (05:49) **The Saudi Reroute & The Houthi "Ace"** - Smith explains the Saudi pipeline to the Red Sea was rerouting ~3.5 million barrels/day, but the Houthi blockade now threatens that workaround.
- 4 (08:11) **Why Gas Prices Are Up & Why They Won't Drop** - Ed asks why prices should be expected to come down. Smith gives a blunt answer.
- 5 (09:40) **The "Paper Barrel" Distortion & The Diesel Signal** - Smith explains why the $89 crude price is misleading.
- 6 (11:20) **The Impact on the US Economy & A Price Prediction** - Ed asks how bad the impact will be if the status quo continues for months.
- 7 (15:27) **Segment 2: The DeepSeek Moment for AI - Chinese Models & Open Source** - Ed introduces a new topic: Chinese startup Moonshot AI's Kimi K3 model, which beats frontier models on some benchmarks at a third of the cost.
+ Full timestamped outline available in the app
Guests on this episode
Show Notes
Ed Elson is joined by Matt Smith to break down how the latest developments in the war with Iran are affecting oil prices and where he thinks gas prices could be headed next. Then, Charlie O'Neill joins the show to discuss China's new AI model, Kimi K3, why open-source models are gaining momentum, and what that shift could mean for the broader AI race.
Matt Smith is the Director of Commodity Research at Kpler. Charlie O’Neill is the Co-Head of Model Training at Baseten.
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