The release of a near-frontier AI model by Chinese AI startup Moonshot has rattled the big US AI labs. What was supposed to be a significant lead is now measured in a handful of months, if not weeks. It is harder to claim export restrictions are working, and it is clear China will soon be able to replicate the entire AI supply chain all the way down to lithography. From there, it is already well positioned to accelerate into robotics and the physical world faster than we can.
Necessity is the mother of invention, and as it turns out, China is increasingly great at innovating in AI.
Of course, benchmarks are highly imperfect, and some would claim we lack neutral and useful benchmarks to begin with. They saturate fast, and some of the institutions advancing them have their own political, if not philosophical, agendas about AI safety.
But early reactions confirm Moonshot’s model is a solid one, even if more jagged than Anthropic's Fable or OpenAI's Sol in some applications.
The frontier labs’ lobbying is in full motion. And multiple flavors of cope have emerged. The classic is the distillation theory: China is stealing, and it needs to be stopped. The irony, of course, is that the frontier labs trained on all sorts of copyrighted material, so they were the first to distill.
But increasingly, you cannot explain China's progress through distillation attacks alone (or through training on model output, to be more precise). And we may soon have to live through a "Sputnik moment" where the United States becomes the follower in the AI race.
Following is not necessarily a bad thing, assuming the government does not listen to the lobbyists and instead plays to the United States’ comparative advantage. Historically, our economy wins when we embrace openness and competition. That was true for the internet, it's what's unfolding with dollar-denominated stablecoins globally, and it will be true for AI.
Now, what’s confusing is that on the surface it looks like China is playing our own game. President Xi Jinping has reinforced his strong commitment to an open-source ecosystem. Of course, open-source AI plays into China's strengths, as it owns the complement in robotics and manufacturing. Furthermore, as Hollywood taught many countries throughout the 20th century, if you own the content, your values travel with it across borders. And there are real security risks in relying on open-weights models from abroad.
Intelligence is the most critical infrastructure countries and firms will rely on going forward. So using open-weights models as a way to advance a Chinese stack is no different than the US using the dollar and SWIFT to project (soft) power in the financial system.
The lobbyists for the US frontier labs have a recipe for the US government to win:
"You don’t need to 'ban open source' (one of the dumber motifs of AI policy discussion). You just need to direct every agency to issue soft law that creates FUD. 'A Federal Reserve Advisory Bulletin found that there may be backdoors in Chinese AI models.' It needn't be that well justified. You just create enough regulatory risk that every regulated enterprise backs off." — Dean Ball
Except it's a recipe that only serves them, not the country. The actual response to Chinese competition in open weights is US open-weights models. That's what Thinking Machines delivered to all of us on Wednesday, and we need more labs, in the US and beyond, to follow.
Intelligence is too important to land in the hands of a few. We need a wide variety of models, approaches, and values. Frontier intelligence will only thrive and serve us if we can drive enough competition. That is what American capitalism is all about. Not protecting incumbents.
Ironically, as frontier labs increasingly encroach on the businesses of other firms, those firms have gotten louder along the same lines. From Microsoft to Palantir and Salesforce, CEOs are realizing that on the current path, the labs will absorb your talent, context, and IP and displace you.
The company-sovereignty and country-sovereignty questions are therefore deeply intertwined. A world where frontier AI is only in the hands of a few big labs is a world where too much market and political power gets concentrated. A world with multiple options is one where human creativity and ingenuity can thrive.
The lobbyists from the big AI labs will keep saying that the only path to safe AGI is through them. The reality is that we all need to own the upside and the responsibility for it to actually work.
While China is playing the US strategy of openness to undermine our leading centralized players, the reality is that it's also enabling a massive wave of American ingenuity and entrepreneurship. Those same open-weights models redistribute power to the many. And that's always been America's strength.