Making sense of the panic over Chinese AI

The launch of the latest AI prototype from a Chinese company — Moonshot AI’s Kimi — has reignited discussions about American competitiveness and open versus proprietary AI.

While there has been plenty of conversation on social media, the debate also appears to be happening behind the scenes in Washington, D.C., where OpenAI and Anthropic She reportedly lobbied organizers With concern about open Chinese models.

In the latest episode of TechCrunch’s Equity podcast, Kirsten Korosik, Sean O’Kane, and I discuss why this seems like a hot-button issue. Aside from suggesting that some people should “touch grass” rather than spend their weekends arguing about

Kirsten noted that imposing tight restrictions on Chinese AI models could primarily benefit a handful of companies: “Are we accelerating and ensuring that the Americans win the AI ​​race, or are we ensuring that some frontier labs perform better than others?

Keep reading for an excerpt of our conversation, edited for length and clarity.

Anthony Ha: For people who have been following the conversation around Chinese AI, this will probably be very, very familiar from the launch of DeepSeek, where essentially a Chinese model emerged; By some standards, it is, or at least seems competitive with some frontier models; And a certain part of the tech industry is losing its mind.

Some of this [debate] It got extra scrutiny because one of the people who posted about it was [an executive] In OpenAI. But in general, there is [is] This recurring question is: Can Chinese companies outperform American companies, at least in some respects, and do so at a lower cost and in a more open manner?

Sean O’Kane: Yes, there are so many elements to this that it feels like we’re seeing a repeat of previous freakouts. I think one of my favorite things is: everyone is so prepared [for] And then we expect something to come along and destroy everything else. And I think my favorite example of that last week was people showing up and saying, “Oh my God; Kimi made a complete replica of macOS in 30 minutesAnd yes, it provided an impressive graphical version of what macOS looks like, but it’s not an operating system.

We keep seeing these things happen over and over again, as everyone gets very stressed out in the tech industry. And I think in particular, with some of the Chinese models that have come out, there’s this expectation, and I think that gets to the heart of why people reacted the way they did last weekend. (Also by the way: Go outside, touch the grass, it’s the weekend. Everyone in the industry has been trading barbs on Twitter all weekend.) But this volatility is really interesting to me because we’re now a week into the break and I don’t think anyone feels like the end is as close as it was a week ago.

Kirsten Korosek: We have a really great story written by one of our reporters, Tim Fernholz, who is trying to unravel the psychosis surrounding this here in the United States. He points to a number of reasons. He concludes – and I don’t want to conclude it for him, but I think there is one person who rises to the top more than others.

There are concerns that these open-weight Chinese models may have an implicit bias towards China, and there is another concern about security risks and guardrails. But there’s also a big idea here, which is the idea of ​​protection, and who’s going to say “win the race”? Will it be the United States or China? This seems to be the motivation behind many of the concerns.

I don’t know, Anthony, if you agree with that?

Anthony: I totally agree. I think the Chinese side always adds this certain level of hysteria. This does not mean that people should not be concerned about how the United States confronts China in various industries. But it becomes very amplified.

Another thing this reminds me of is the discussion about TikTok a few years ago. And again, I didn’t think the concerns about TikTok were completely made up, but the level of panic that people have reached – it seems like as soon as you add the word China to any discussion, things escalate dramatically. And then, in this case, it ties into this discussion of openness [weights] And this idea that AI is so powerful and so dangerous that the only way we can control it is through these models owned by these American frontier companies.

Obviously most people say this [have] The reasons why they want to say it. David Sachs, who was the Trump administration’s AI official [and] Now a different role in the Trump administration, he was ranting on X about how, “I can’t believe people are against data centers, we’re tying ourselves up in knots, and there’s so much regulation.” This is a way to defend the positions they were already taking about AI. “Oh my God, if China defeats us, it’s unthinkable, so you have to do what I want to do anyway.”

Kirsten: Okay, and if you’re going to impose a blanket ban on Chinese bantamweights – I’m not saying there aren’t real concerns here, but let’s just make that clear. If we do that, it will benefit models created by OpenAI, for example, and force companies to use those models instead of using models like Kimi.

So, you really have to ask the question: Are we accelerating and ensuring that Americans win the AI ​​race, or are we ensuring that some frontier labs perform better than others?

Shawn: At this point, we should say that a lot of this discussion was actually started by OpenAI’s head of strategic futures, Dean Paul, who was the first to come out This really long post mentions some of these concerns.

Part of me thinks the reaction to that was because people didn’t agree with what Dean wrote. Part of me also thinks the reaction was driven by the fact that he said the thing out loud. He essentially said that the United States should create regulatory chaos — fear, uncertainty, and doubt — and weaken the ability of these open-weight models to compete with the United States. [Ball later backed away from this argument.]

And for me, I think you can read some of people’s responses like, “You’re not supposed to say that out loud, Dean.”