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The US-China technology rivalry, once focused largely on advanced chips and semiconductor manufacturing equipment, is now expanding into a broader contest over artificial intelligence models and the future rules of global AI governance.
As Chinese developers close the gap with leading US AI systems, the Trump administration is reviewing measures to restrict US companies from using Chinese AI models, while Beijing is seeking to challenge the US-centered AI ecosystem through open-source development and international cooperation.
Axios reported Monday (local time) that Washington has begun to review measures to bar US companies from utilizing Chinese AI models following Friday’s launch of Kimi K3, Chinese startup Moonshot AI’s open-source AI model.
Kimi K3 has sent shockwaves throughout the AI sector for performing on par with flagship models released by market dominators Anthropic and OpenAI.
Some of the measures the US administration is considering are said to involve export controls to restrict the use of Chinese AI models or publicly adding pressure to US companies utilizing Chinese models.
Until now, the US has attempted to curb China’s AI development by sharply restricting semiconductors and chip manufacturing equipment exports to China, but it has not outrightly banned commercial use of Chinese AI models.
But Kimi K3 isn’t the only Chinese AI model that is causing an uproar.
Just two days after Moonshot AI released its latest model, competitor Alibaba opened up a preview version of its Qwen3.8 Max, its flagship model, to developers on Sunday.
Alibaba called the model, which has 2.4 trillion parameters, comparable to frontier models and second only to Fable 5 from Anthropic.
Considering that it hasn’t even been two full months since Fable 5’s release in early June, industry observers suggest that China may have narrowed the tech gap between it and the US from 6-9 months to 2-3 months.
Chinese AI models are also gaining ground by leveraging lower token costs. According to monthly usage rankings on OpenRouter, an AI model aggregation platform, the top six models as of Tuesday were all developed by Chinese companies, including Xiaomi, DeepSeek, Tencent, MiniMax, and Zhipu AI.
Most of those models are open-source, meaning that they make their underlying parameters publicly available, allowing them to offer lower token costs than leading closed-source models from US companies.
OpenRouter’s State of AI 2025 report, released late last year, showed that Chinese models accounted for just 1.2% of weekly usage share at the end of 2024. That figure rose to an average of 13% in 2025, reaching nearly 30% some weeks.
China is using the rapid advancements in its homegrown models as a basis to stake its place in the competition for AI dominance and norm-setting.
During a keynote address at the opening ceremony of the World AI Conference last week, Chinese President Xi Jinping said that AI development “should not be a solo performance by a single country, but a symphony of international cooperation,” demonstrating Beijing’s advocacy for openness and cooperation — a far cry from the US move to consider restrictions on exports of its models to China as well as curbs on use of Chinese models within the US.
When China established the World Artificial Intelligence Cooperation Organisation at the conference last week, 29 countries signed on as founding members, including Brazil and Russia.
“The remarks amounted to Xi's clearest articulation yet of China's ambition to shape global AI governance, framing its open-source models as a global public good and positioning Beijing as an alternative to Washington at a pivotal moment in the race for technological leadership,” Reuters said of the Chinese leader’s speech.
By Kang Jae-gu, staff reporter
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