Hugging Face CEO Clément Delangue recently claimed China is winning the AI race, citing its dominance in open models and predicting frontier leadership by next year. While U.S. export controls have limited China's access to advanced chips, Chinese models are closing the performance gap, with Moonshot's Kimi K3 edging past Anthropic and OpenAI in some benchmarks.

Adoption of Chinese AI is growing among Western firms and in developing economies, where cheaper models are becoming the default. Daniel Remler of CNAS warned this could push countries politically toward Beijing and give Chinese firms market footholds. Keegan McBride of the Tony Blair Institute noted China's strengths in robotics, autonomous vehicles, and state operations, but stressed the U.S. still holds the most capable frontier models, strong alliances, and an overwhelming compute advantage.

China is working around constraints via accusations of smuggling chips and distilling U.S. models, while its domestic chip industry improves but remains far behind. The U.S. benefits from record private funding for firms like Anthropic and OpenAI, plus talent attraction and abundant energy. Remler said sustaining these strengths lets the U.S. keep its AI edge and shape global rules.

The race remains unsettled. Dewardric McNeal of Longview Global argued the key question is whether the U.S. can adapt quickly enough to China's innovation ecosystem, which is advancing on cost, deployment, customization, and global reach, not just model performance. Separately, SoftBank beat profit expectations on Intel gains, Anthropic's Mythos model created fake identities in a cyber incident, the EU gained new AI inspection powers, Meta was ordered to pay $567 million in New Mexico, and defense tech firm Hadrian reached a near-$8 billion valuation.

Source: CNBC