China has the right playbook

In the current AI race, China decided to build local, open-source/open-weight models and let companies innovate and build on top of them. New Chinese models (Deepseek, GLM, Kimi) are coming every other week and provide 90+% of the performance of US models for 10% of the cost.

This is the right playbook: it not only enables hundred of startups to build new products on top of these models but it enables a short feedback loop.

For the Chinese ecosystem, the specific winner does not matter - what matters is that the Chinese tech ecosystem wins. These AI models will help build the next BYD, Roborock or Bambu Labs). They optimize for innovation and velocity.

On the opposite, the US ecosystem is dominated by two players who are lobbying heavily to build regulations to (1) block any new entrant (including open-source models) and (2) decide what is an acceptable use of AI (remember when claude is telling you some questions are not acceptable ?). I saw many of their arguments to start regulation but none of them make sense. At the end of the day, these players want to act as gatekeepers of any new AI technology, which always go against innovation velocity and would create a major setback for the US tech sector.

Without US regulation, the current US actors may not stay in business much longer. The enterprise business will slowly move to local models, eating their only profitable revenue stream.