Chinese AI models narrow gap with US, Businessweek says

China is quickly closing the artificial intelligence gap with the United States and, by some key measures, has already pulled ahead, Bloomberg Businessweek reported on October 15. Its main example is Moonshot's Kimi K3, released in July, which came close to matching Anthropic's most advanced model at a fraction of the cost. The report lands as experts argue over whether the race can be won at all, and whether US pessimism about AI could cost the country its lead.elfinanciero.com.mx

Cheap open models gain share

On OpenRouter, a platform that gives developers access to hundreds of models, usage of Chinese models passed US platforms for the first time in June and topped 60% of the market in July, according to Businessweek. Chinese models also made up 41.4% of generative-model downloads on Hugging Face. In a website-building test the magazine ran with Vals AI, building the site with Kimi K3 cost $11.91 and with Alibaba's ↘ 1.82% Qwen 3.7 Max $4.08, compared with $48.99 for Anthropic's Fable 5.elfinanciero.com.mx

Airbnb ↘ 0.33%, DoorDash ↘ 2.02% and Coinbase ↘ 5.79% have adopted Chinese models hosted on local servers, the report said. The US still has a large compute advantage. Saif Khan of the Institute for Progress estimates American computing capacity at about 10 times China's. Analysts cited by Fortune via Yahoo put the best Chinese models only four months behind top US releases, down from seven months at the start of the year.ca.finance.yahoo.com+1

Marcus sees a stalemate

New York University professor Gary Marcus said the US-China race will end in a tie, Bloomberg reported. Speaking at the Bloomberg New Economy Forum in New Delhi, he compared the rivalry to Coke and Pepsi. "The tragedy of our era is that these two countries are putting in so much effort to try to win what is I think an unwinnable war," Marcus said, adding that Chinese models are "not quite as good as the very best US models but they're arguably cheaper".bloomberg.com+1

Warning on US pessimism

Paul Sracic, a senior fellow at the Hudson Institute, made the opposite case in an opinion piece. He cited a Gallup poll in which 93% of people in China said AI would benefit their country, compared with 37% of Americans. He wrote that opposition to new data centers has already delayed or canceled more than a hundred projects. Sracic warned that if developing countries come to rely on subsidized Chinese open-weight models, Beijing could gain long-term influence. "If we continue to let our fears outpace our interests, we risk delivering a devastating blow to the most innovative sector of our economy," he wrote.yahoo.com

The policy pressure is also growing. Treasury Secretary Scott Bessent has raised the possibility of sanctions if Chinese developers are found to have stolen intellectual property through "distillation," a method of training new models on the outputs of existing ones, Businessweek reported. US companies that depend on cheaper Chinese tools are warning against broad restrictions. "You don't need God to write your emails," said Flo Crivello, founder of the AI assistant Lindy.elfinanciero.com.mx