Making sense of the panic over Chinese AI

The launch of a Chinese company’s latest AI model – Moonshot AI’s Kimi – has reignited debates over American competitiveness and open versus proprietary AI.

While there has been plenty of discussion on social media, it appears the debate is also taking place behind the scenes in Washington, DC, where OpenAI and Anthropic have been running their campaigns. reportedly lobbied regulators with concerns about open Chinese models.

On the latest episode of TechCrunch’s Equity podcast, Kirsten Korosec, Sean O’Kane and I discussed why this seems to be such a hot topic. In addition to suggesting that certain people should “touch grass” instead of spending their weekends arguing about

And Kirsten noted that imposing heavy restrictions on Chinese AI models could primarily benefit a handful of companies: “Do we accelerate and ensure that Americans win the AI ​​race, or do we ensure that certain border labs do 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 discourse around Chinese AI, this will probably be very, very familiar from the launch of DeepSeek, where a Chinese model is actually coming out; on some benchmarks it does, or at least seems competitive with some of the frontier models; and a certain part of the tech industry is going crazy.

Some of this [debate] got extra attention because one of the people who posted about it was [an executive] at Open AI. But overall there [is] this recurring question: can Chinese companies beat American companies, at least in some respects, and do it much cheaper and in a much more open way?

Sean O’Kane: Yes, there are a lot of elements of this that make it feel like we’re seeing repeats of previous freakouts. I think one of my favorites is: Everyone is so ready [for] and so expecting something to arrive and blow everything else away. And I think my favorite example of that this past week was people showing off, “My God, Kimi created a full replication of macOS in 30 minutes.” And yes, it made a pretty impressive graphical recreation of what macOS looks like, but it’s not an operating system.

We see these things happen over and over again, with everyone being so nervous in the tech industry. And I think especially with some of the Chinese models that are coming to market, there’s this expectation, and I think it goes to the heart of why people reacted the way they reacted last weekend. (Also, by the way: go outside, touch grass, it’s the weekend. Everyone in the industry was trading barbs on Twitter all weekend.) But this nervousness is really interesting to me because we’re a week into it and I don’t think anyone feels like the end is near like they did a week ago.

Kirsten Korosec: We have a really great story from one of our reporters, Tim Fernholz, trying to explain the psychosis around this here in the United States. He points to a number of reasons. And concludes – and I don’t want to conclude it for him, but I think there’s one that rises to the top more than others.

There is concern that these Chinese open-weight models might have an implicit bias towards China; there is another concern about safety hazards and guardrails. But there’s also a pretty big idea behind this, which is protectionism, and who’s going to quote and unquote “win the race”? Will it be the US or China? And that seems to drive a lot of the fear.

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

Anthony: I completely agree. I think the Chinese aspect always adds a certain level of hysteria. And that’s not to say people shouldn’t worry about how the US compares to China in various sectors. But it’s so ramped up.

The other thing this reminds me of is the discussion around TikTok a few years ago. And again, it wasn’t that I thought the concerns about TikTok were completely made up, but that the extent to which people were panicking – it seems like as soon as you add the word China to a discussion, things just increase dramatically. And in this case it’s tied to this discussion about open [weights] and this idea that AI is so powerful and so dangerous that the only way we can control it is through these proprietary models of these American frontier companies.

Obviously most people say this [have] reasons why they want to say that. David Sacks, the Trump administration’s AI czar [and] now has a different role in the Trump administration, yelling at And so it’s a way to argue for the positions that they already had around AI. “My God, if China beats us, it’s unthinkable, so you have to do what I want to do.”

Kirsten: Right, and if you were to impose a blanket ban on Chinese open weight models – I’m not saying there aren’t real concerns here, but let’s just play that out. If we did that, it would benefit models created by OpenAI, for example, and it would force companies to use them instead of using models like Kimi.

So you really have to ask the question: do we accelerate and ensure that Americans win the AI ​​race, or do we ensure that certain border labs do better than others?

Sean: At this point we should say that a lot of this discussion has really been started by the head of strategic futures at OpenAI, Dean Ball, who first came out with this very long post that mentions some of these concerns.

Part of me thinks the backlash to this was because people didn’t agree with what Dean wrote. Part of me also thinks the reaction was caused by him just saying the thing out loud. He basically said that the US should create regulatory FUD – fear, uncertainty and doubt – and ruin the ability of these open-weight models to compete with the US. [Ball later backed away from this argument.]

And for me, I think you can read in some of people’s reactions like, “You can’t say that out loud, Dean.”