Cheaper, open and intelligent: Chinese AI models gain ground, as they make inroads in the US

China has a hot new product in the United States: artificial intelligence.

San Francisco-based Raffi Krikorian, the chief technology officer at Mozilla, which runs the Firefox browser, switched to Chinese AI startup Moonshot's Kimi K3 for many of his day-to-day activities within days of the new, powerful model's launch more than a week ago.

"It just seems snappier," he said of K3, comparing it to the acclaimed and more expensive Claude Fable chatbot from San Francisco company Anthropic. Earlier, he had been using another high-performing Chinese model, Z.ai's GLM-5.2, for routine tasks such as managing his calendar, documents and email.

Krikorian is one of a growing number of Americans adopting Chinese AI systems, which are gaining ground around the world because they are more affordable and increasingly efficient. U.S. companies like cryptocurrency exchange Coinbase said they're switching to Chinese AI models to help trim costs.

Their popularity has frustrated some U.S. tech giants, but short of an outright ban, they're likely to continue to appeal to independent software developers in the U.S. and elsewhere.

American-led restrictions block China from accessing some of the world's most advanced technologies including cutting-edge AI chips and U.S. Treasury Secretary Scott Bessent has warned more sanctions could be coming to protect American intellectual property.

U.S. President Donald Trump's administration on Wednesday accused Moonshot of using "covert" but not necessarily illegal methods to build K3 off the back of Anthropic's Fable. Some U.S. politicians and AI companies including Anthropic have accused Chinese startups of illicit "distillation" of their models to extract their technologies, a claim that Beijing rejects as "groundless."

Most Chinese AI models are open-source - meaning anyone can examine and build on them - at a time when frontier models from U.S. companies like Anthropic and OpenAI are closed-source.

Chinese model vendors are expected to leverage open-source software to promote their global usage and adoption, said Lian Jye Su, of the technology research and advisory group Omdia.

As Chinese open-source models are increasingly almost as good as closed systems made by leading U.S. companies, said Mozilla's Krikorian, "the open frontier is becoming increasingly Chinese-built." While the U.S. weighs restricting Chinese AI models, a group of American tech firms including Microsoft, Meta and Nvidia signed an open letter published Friday backing "open" AI models.

Other U.S. tech policies also at times give China an upper hand, some experts say. China's Z.ai released its GLM-5.2 model in mid-June, not long after the Trump administration put export controls on Anthropic's Fable and Mythos models, keeping them offline for more than two weeks.

"Restricting an American model can immediately create an opening for a Chinese competitor," said Arena's Angelopoulos.

At a flagship technology summit in Shanghai, Chinese President Xi Jinping championed open-source AI models and the importance of promoting greater global equity, while pledging Chinese involvement in raising AI capabilities especially in developing nations.