The Brookings Institution released commentary on Jul. 30 highlighting Washington and Silicon Valley’s growing concerns about the rise of Chinese open-source artificial intelligence models, particularly following the release of Kimi K3 by Moonshot. In an explainer for The Beijing Brief podcast, Kyle Chan, a fellow at the Brookings Institution, discussed how the competition between Chinese and American AI companies is evolving into a broader contest between nations.
Chan said, “Everyone’s focused on the race between OpenAI and Anthropic, but there’s arguably a bigger AI race going on, the race between the U.S. and China.” He described how open-source AI models from Chinese companies such as Kimi, DeepSeek, and z.ai are gaining ground globally due to their accessibility and lower costs compared to proprietary American offerings.
According to Chan, “Chinese models are getting more popular around the world, including in the United States,” because developers can download them for free or at much lower prices than American counterparts. He noted that these models deliver approximately 90% of the capabilities of leading U.S. products but at a fraction of the cost—a trend that is challenging established business strategies in Silicon Valley.
The release of Kimi K3 has narrowed what was thought to be a significant gap between top-tier U.S. AI systems and those developed in China. Chan said this development surprised many observers: “A lot of people had thought that China would take months, if not more than a year, to get to a Mythos level capability.”
Chan also addressed technical strategies like distillation—where less powerful models are trained using outputs from stronger ones—and said that while this practice raises policy questions in Washington about intellectual property protection and global competitiveness, it does not fully explain China’s rapid progress: “There’s something real going on beneath the surface here, and that is a lot of talent and a lot of resources in China going towards AI development.”
The John L. Thornton China Center is part of the Brookings Institution; it focuses on producing independent analyses related to U.S.-China relations and international affairs through research publications such as blogs and monographs as well as collaborations with institutions like Tsinghua University for joint dialogues, according to its official website.