E-Paper
Americans switch to Chinese AI as cheaper models challenge ChatGPT and Claude despite Trump crackdown
Americans are switching to Chinese AI models like Kimi and DeepSeek as lower costs challenge ChatGPT and Claude despite Trump's crackdown on China.
Chinese artificial intelligence (AI) models are becoming increasingly popular in the United States, even as the Trump administration takes a tougher stand against Chinese technology. Many Americans are switching from popular US AI tools like ChatGPT and Claude to Chinese AI models because they are cheaper and work well for many everyday tasks.
San Francisco-based Raffi Krikorian, the chief technology officer at Mozilla, said he started using Chinese AI startup Moonshot's Kimi K3 just days after it launched. Krikorian said he uses Kimi K3 for many daily tasks instead of Anthropic's Claude chatbot. He said, "It just seems snappier," while comparing K3 with Anthropic's Claude Fable chatbot, as quoted by AP.
Why Americans are choosing Chinese AI
Before switching to Kimi K3, Krikorian had been using another Chinese AI model, Z.ai's GLM-5.2, for routine work like managing his calendar, documents and emails. Krikorian is not alone. A growing number of Americans are now adopting Chinese AI systems because they offer good performance at much lower prices. US cryptocurrency exchange Coinbase has also started using Chinese AI models to reduce its operating costs.
Chinese AI models are becoming more attractive to software developers because they are affordable, even though some US tech companies are unhappy about their growing popularity. The report says that unless the US completely bans these AI models, they are likely to remain popular among developers in America and other countries. The US already blocks China from buying some of the world's most advanced AI chips and other key technologies.
Trump crackdown on Chinese AI
US Treasury Secretary Scott Bessent has warned that the Trump administration could impose even more sanctions to protect American intellectual property.
On Wednesday, the Trump administration accused Moonshot of using "covert" methods to build Kimi K3 using Anthropic's Fable model, according to AP. The administration said those methods may not necessarily have been illegal. Several US politicians and AI companies, including Anthropic, have accused Chinese AI startups of using "distillation" to copy technology from American AI models.
China has rejected those accusations, calling them "groundless." The competition between the US and China in AI has become much stronger since Chinese startup DeepSeek surprised the tech world earlier this year. DeepSeek gained attention by offering an AI model that performed similarly to top US models but at a much lower cost. Since then, Chinese companies have launched several advanced AI models, including Z.ai's GLM-5.2 in June and Moonshot's Kimi K3 in July. Alibaba also introduced a preview of its Qwen3.8 Max AI model in July.
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DeepSeek also released previews of its latest V4 model in April to compete with OpenAI's GPT and Google's Gemini. Experts told AP that these latest Chinese AI models are now nearly as capable as the most advanced AI systems built by OpenAI and Anthropic.
Technology executive Curt Meinhold, founder of LilyList from North Carolina said he now often prefers DeepSeek for business tasks like finding sales leads. Meinhold believes most people do not need the most powerful and expensive AI models. He said, "At the end of the day, most of us, the vast majority of us, 90 plus percent, don't need (Anthropic's) Mythos or Fable", as quoted by AP. He added, "Like, we just don't need it, we need something good enough."
Chinese AI grows around the world
Investment bank Goldman Sachs said in a July research report that Chinese AI models are reaching a "critical stage" for wider global adoption. Goldman Sachs said demand for cheaper AI models is increasing as more companies use AI agents that perform complex tasks automatically. According to analysts including Alex Colville from the Australian Strategic Policy Institute, AI pricing is based on the number of tokens processed, making cheaper models much more attractive for businesses.
Meinhold said, "The Chinese models, you know, I find them to be pretty close on code and research", quoted by AP. He added, "If I can pay a handful of cents per million output tokens versus 30 bucks or 40 bucks or 50 bucks, then it's good enough."
Data from AI platform OpenRouter showed that the five most popular AI models over the past month were all Chinese. Market intelligence firm Sensor Tower estimated that Kimi was downloaded more than 930,000 times in the week after K3 launched. That represented a 200% increase compared with the previous week.
In the United States alone, Kimi recorded around 86,000 downloads, a 387% jump from the previous week. Kimi K3 became so popular that Moonshot temporarily stopped accepting new subscriptions because demand was too high. Despite their rapid progress, experts say Chinese AI models still trail the best US AI systems when it comes to overall capabilities, as per Anastasios Angelopoulos, Arena CEO, cited by AP.
Can Chinese AI beat ChatGPT?
Experts also say US AI companies are working on cheaper versions of their own models to remain competitive, according to Yasir Atalan, Center for Strategic and International Studies, cited by AP. One major advantage for China is that most Chinese AI models are open-source, allowing anyone to inspect, modify and build on them. By comparison, leading US AI models from companies like OpenAI and Anthropic remain closed-source.
Technology research firm Omdia expects Chinese companies to use open-source AI to expand their global presence. Krikorian said, "the open frontier is becoming increasingly Chinese-built", as quoted by AP.
While the US debates restricting Chinese AI models, companies including Microsoft, Meta and Nvidia signed an open letter supporting open AI models. The report says some US government policies may unintentionally help Chinese AI companies gain more users. For example, after the Trump administration placed export controls on Anthropic's Fable and Mythos models, they remained unavailable for more than two weeks, while China's Z.ai launched its GLM-5.2 model during that period.
Arena CEO Anastasios Angelopoulos said, "Restricting an American model can immediately create an opening for a Chinese competitor", as quoted by AP. Inside China, businesses and consumers have quickly adopted AI products with strong government support. Chinese technology companies including Huawei and Tencent are adding AI features to smartphones, AI glasses and humanoid robots.
China pushes AI growth around the world
China is also trying to expand its AI influence globally. At a major technology summit in Shanghai, Chinese President Xi Jinping promoted open-source AI and said China wants to help developing countries improve their AI capabilities. Strong competition inside China is pushing AI startups to expand into overseas markets. Many leading Chinese AI companies are raising new funding, including through public share offerings, to support their global expansion.
Chelsey Tam of Morningstar said both the US and China want more countries to adopt their AI ecosystems while protecting technologies that could help strategic rivals. Angelopoulos said competition is no longer just between the US and China because Chinese AI companies are also competing aggressively with one another.
Some experts also warn that heavy spending on AI raises questions about whether Chinese AI startups can remain financially sustainable over the long term. For example, Z.ai reported that its revenue increased 132% to 724 million yuan ($107 million) last year, but its net loss also grew 60% to 4.7 billion yuan ($694 million).
Despite political tensions, trade restrictions and concerns over technology theft, experts believe Chinese AI models are likely to continue gaining users in the US because they offer strong performance at much lower prices. Krikorian encouraged others to try Chinese AI models, saying, "I would highly recommend anyone doing any serious AI load to at least evaluate it", as quoted by AP.
