The dominance of China’s open-source artificial intelligence (AI) is creating a "self-reinforcing competitive advantage," allowing it to challenge US rivals despite restricted access to advanced AI chips, a US congressional advisory body said yesterday.
Driven by their cheaper cost, Chinese large language models from firms including Alibaba Group Holding Ltd (阿里巴巴), Moonshot AI Technology Co (月之暗面) and MiniMax Group Inc (稀宇科技) now dominate worldwide usage rankings on platforms like HuggingFace and OpenRouter.
Beijing’s push to deploy AI throughout a wide range of sectors to upgrade its manufacturing base, factories, logistics networks and robotics is generating real-world data that feeds back into model improvement, the report said.
Photo: Maxim Shemetov, Reuters
"This open ecosystem enables China to innovate close to the frontier despite significant compute constraints," the US-China Economic and Security Review Commission (USCC) wrote in a report.
"Chinese labs have narrowed performance gaps with top Western large language models," it added.
US lawmakers have imposed successive rounds of export restrictions on China since 2022, banning them from acquiring the most advanced AI chips, though Washington approved exports of Nvidia Corp’s second-most advanced chip in December last year.
US companies including ChatGPT developer OpenAI and Anthropic PBC, creator of Claude, as well as traditional tech giants have invested billions of dollars to remain at the forefront of the new technology.
But their position could be under threat.
"Open model proliferation creates alternative pathways to AI leadership," the report said.
Some estimates suggest that around 80 percent of US AI start-ups now use Chinese open-source AI models.
DeepSeek’s (深度求索) groundbreaking R1 model launched last year quickly overtook ChatGPT as the most downloaded model on the US App Store. And Alibaba’s Qwen family of models has surpassed Meta Platforms Inc’s Llama in global cumulative downloads, according to HuggingFace.
As AI’s frontiers shift from large language models toward agentic AI and physical, or embodied, AI, China may be better positioned to capitalize on its mass data collection efforts to boost development of humanoid robots, autonomous driving software or even dual-purpose technologies, the report said.
"There’s a bit of a deployment gap in the embodied AI space between the US and China. That’s something that over time compounds itself ... We’re starting to see that compounding now," USCC vice chairman Michael Kuiken told Reuters in an interview.
The commission is also watching how China uses AI in sectors like biotech, quantum computing and advanced materials, he added.
Beijing has designated embodied AI as a core future strategic industry, and many leading Chinese humanoid robotics firms plan public listings this year.
Despite warnings from some Western research organisations of the potential security risks of an over-reliance on Chinese open-source AI models and their political bias toward Chinese government positions, many companies are adopting them anyway.
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