China’s AI Heist | Foreign Affairs

https://www.foreignaffairs.com/china/chinas-ai-heist

Publish Date: 2026-05-29 00:00:00

Source Domain: www.foreignaffairs.com

Technological advancements have enabled the distribution of AI models directly onto consumer devices, which is democratizing access and reducing costs.
Open-weight AI, which is downloadable and modifiable, is displacing cloud-based systems and expanding the AI competition between the U.S. and China.
Chinese companies are utilizing technological practices like distillation to extract and compress advanced U.S. AI models for use in cost-effective, local hardware, gaining an advantage in this market.
Asymmetry is increasing as Chinese firms dominate the open-weight local AI market, while U.S. firms face legal restrictions that prevent them from doing the same, potentially allowing China to become influential in the global AI landscape.
The U.S. risks losing its technical AI leadership to China as Chinese AI models are becoming the default on a global scale, posing security risks and creating geopolitical dependencies.
To counteract this, the U.S. must adapt its containment strategies against China’s anticompetitive practices while supporting U.S. companies’ development of alternatives to Chinese models.
Export controls and regulatory policies are critical tools that Washington could employ to disrupt Chinese distillation efforts, alongside fostering U.S. open-weight AI innovation.
Coordination with international allies is necessary to harmonize and enforce policies that would create a more level playing field, ensuring that U.S. AI systems have a competitive edge in the global market.