Makes sense about the panic over Chinese AI

The launch of the latest AI model from a Chinese company—Moonshot AI’s Kimi—sparked the debate about American competitiveness and open versus proprietary AI.

While there was plenty of conversation on social media, the debate also appears to be happening behind the scenes in Washington, DC, where OpenAI and Anthropic have reportedly lobbied regulators with concerns about open Chinese models.

On the latest episode of TechCrunch’s Equity podcast, Kirsten Korosec, Sean O’Kane, and I discussed why this seems to be such a hot button issue. Besides suggesting that certain people should “move grass” instead of spending their weekends arguing about X, Sean noted that this “in many ways feels like we’re seeing repeats of past freakouts,” with everyone in Silicon Valley “expecting that something will arrive and blow everything else away.”

And Kirsten noted that placing heavy restrictions on Chinese AI models could primarily benefit a handful of companies: “Do we accelerate and ensure that the Americans win the AI ​​race, or do we ensure that certain frontier labs do better than others?

Continue reading for an excerpt of our conversation, edited for length and clarity.

Anthony Ha: For people who have been following the discourse around Chinese AI, this will probably be very, very familiar from the launch of DeepSeek, where essentially a Chinese model is coming out; on some benchmarks it does too, or at least seems competitive with some of the Frontier models; and a certain part of the tech industry is losing its mind.

Some of this [debate] got extra scrutiny because one of the people who wrote about it was [an executive] at OpenAI. But generally there [is] this recurring question of: Can Chinese companies beat American companies, at least in some aspects, and do it much cheaper and in a much more open way?

Sean O’Kane: Yes, there are many elements of this that feel like we’re seeing repeats of past freakouts. I think one of my favorites is: Everyone is so ready [for] and then expect something to come along and blow everything else away. And I think my favorite example of that this past week was people showing that “my god, Kimi did in 30 minutes a full replication of macOS.” And yes, it made a pretty impressive graphical rendering of what macOS looks like, but it’s not an OS.

We keep seeing these things happen over and over again where everyone is so nervous in the tech industry. And I think especially with some of the Chinese models coming out, there’s this expectation, and I think this gets to the heart of why people reacted the way they did last weekend. (Also, by the way: Get outside, touch the grass, it’s the weekend. Everyone in the industry traded barbs on Twitter all weekend.) But this creepiness is really interesting to me because we’re now a week out, and I don’t think anyone feels like the end is near like they were a week ago.

Kirsten Korosec: We have a really good story by one of our reporters, Tim Fernholz, who tries to unpack the psychosis surrounding this here in the US. He points to a number of reasons. And concludes — and I don’t want to conclude it for him, but I think there is one who rises to the top more than others.

There is concern that these Chinese open weight models may have an implicit bias towards China, there is another concern about security risks and guardrails. But there’s also a pretty big idea here, which is protectionism, and who wants to quote-unquote “win the race”? Should it be the US or China? And that seems to be the driving force behind what the fear is.

I don’t know, Anthony, do you agree with that?

Anthony: I completely agree. I think the China aspect always adds this certain level of hysteria. And that’s not to say that people shouldn’t worry about how the U.S. relates to China across different industries. But it is then amplified.

The other thing it reminds me of is the discussion around TikTok a few years ago. And again, it wasn’t that I thought the concerns around TikTok were completely made up, but that the level of panic people got – it seems that as soon as you add the word China to any discussion, things just escalate dramatically. And so in this case it’s linked to this discussion of open [weights] and this idea that artificial intelligence is so powerful and so dangerous that the only way we can control it is with these proprietary models from these American border companies.

Obviously, most people say this [have] reasons why they want to say that. David Sacks, who was the AI ​​czar for the Trump administration [and] now has another role in the Trump administration, yelled at X about how, “I can’t believe people are against data centers, we’re tying ourselves in knots, there’s too much regulation.” And so it’s a way of arguing for the positions they already had around AI. “God, if China beats us, it is unthinkable, so you have to do what I want anyway.”

Kirsten: Okay, and if you were to ban open weight Chinese models – I’m not saying there aren’t real concerns here, but let’s just play it out. If we were to do that, it would benefit models created by OpenAI, for example, and it would force companies to use them as opposed to using models like Kimi.

So you really have to ask the question: Are we accelerating and ensuring that the Americans win the AI ​​race, or are we ensuring that certain frontier labs do better than others?

Sean: At this point, we have to say that a lot of this discussion was really sparked by the head of strategic futures at OpenAI, Dean Ball, who was the first to come out with this really long post mentioning some of these concerns.

Part of me thinks the reaction to this was because people disagreed with what Dean wrote. Part of me also thinks the reaction was driven by him just sort of saying things out loud. He basically said that the US should create regulatory FUD – fear, uncertainty and doubt – and destroy the opportunities for these open weight models to compete with the US. [Ball later backed away from this argument.]

And to me, I think you can read some of the responses from people as, “You’re not supposed to say that out loud, Dean.”