How to Stop China from Freeriding on American AI– warontherocks.com

The release of the Chinese open-weight AI model Kimi K3 has compressed a year’s worth of unresolved AI policy debate into a single news cycle. On July 21, Treasury Secretary Scott Bessent threatened sanctions against Chinese labs found to have built their models on “theft,” reporting that the government is “finding watermarks of our U.S. large language models on many of the Chinese models.” The following day, White House science advisor Michael Kratsios clarified that the Chinese AI lab behind K3, Moonshot AI, had built a sophisticated platform to copy Anthropic’s Fable model while evading detection.

Industry has been vocal about its own views, with Nvidia’s Jensen Huang declaring that American companies should “absolutely” use Chinese models that outcompete American counterparts on price. In the Washington Post, investor Bill Gurley argued that treating open models as a danger to be licensed and contained runs afoul of the free-market principles that have long powered American innovation.