Axios: U.S. AI vs. China AI

Posted on June 21, 2026 by michelleclarke2015
U.S. AI vs. China AI
 
An area chart showing the weekly share of token consumption on OpenRouter from Jan. 1, 2025, to June 10, 2026. In January 2025, the share of token consumption by Chinese models was about 7%. The share grew significantly to over 50% by June 2026.Data: OpenRouter. (Includes the top 50 models.) Chart: Erin Davis/Axios VisualsThis intelligence for AMers is adapted from a special takeover issue of Jim VandeHei’s new weekly newsletter for CEOs:

Cheap, powerful, mostly Chinese open-source AI models are seeping into American companies, often unnoticed.

Why it matters: Unlike closed models such as Anthropic’s Claude or OpenAI’s ChatGPT, open-source AI is free to download, cheaper to run, and dominated by China.

Even the richest software company on Earth can’t hold the line on closed American-only models:

Axios’ Ina Fried scooped this week that Microsoft is considering using the Chinese AI model DeepSeek as a cheaper option to power Copilot Cowork, the company’s agentic assistant and the most compute-hungry part of Microsoft 365.

So the open-source question is shifting from if to how.

The big picture: The debate over closed vs. open models is also a U.S. vs. China battle. Dominating open-source AI is China’s national strategy.

“Open-source models are dominated by the Chinese — they’re like nine months behind the state of the art,” a top tech exec tells Mike. “And they’re significantly cheaper to run. If you had to buy the frontier models from the top labs, a lot of people would be priced out. We’re talking about a 10x, sometimes a 100x, price difference.

“The issue is more urgent than ever, as companies debate heavy reliance on America’s dominant and expensive closed models: Claude, ChatGPT and Google’s Gemini.

How we got here: “Open source” means the model weights — the actual trained intelligence — are public. Anyone can download, modify and deploy them. The best-performing, most-used ones are Chinese.

The U.S. incentivized its frontier AI labs to optimize for revenue — with their eyes on trillion-dollar IPOs. That pushed them toward subscriptions and closed ecosystems where every use can be metered.

The performance of DeepSeek V4 and other leading Chinese models lags U.S. models. But the gap is closing fast.

Behind the scenes: Some companies are already running Chinese models, unbeknownst to their CEOs, because vendors and engineers chose them on price.

The AI agent platform Lindy switched 100% earlier this month to DeepSeek V4, citing millions in savings and better performance.

The bottom line: Open-source Chinese models are good enough for most work at a fraction of the price. But they come with security risks that many companies aren’t grappling with: Beijing has a potential backdoor into many companies, posing a regulatory threat as U.S.-China competition escalates.📈 If you’re a CEO or on a CEO’s team: Ask to join Jim’s new weekly Axios C-Suite newsletter.
Share on Facebook Tweet this Story Post to LinkedIn 
Unknown's avatar

About michelleclarke2015

Life event that changes all: Horse riding accident in Zimbabwe in 1993, a fractured skull et al including bipolar anxiety, chronic fatigue …. co-morbidities (Nietzche 'He who has the reason why can deal with any how' details my health history from 1993 to date). 17th 2017 August operation for breast cancer (no indications just an appointment came from BreastCheck through the Post). Trinity College Dublin Business Economics and Social Studies (but no degree) 1997-2003; UCD 1997/1998 night classes) essays, projects, writings. Trinity Horizon Programme 1997/98 (Centre for Women Studies Trinity College Dublin/St. Patrick's Foundation (Professor McKeon) EU Horizon funded: research study of 15 women (I was one of this group and it became the cornerstone of my journey to now 2017) over 9 mth period diagnosed with depression and their reintegration into society, with special emphasis on work, arts, further education; Notes from time at Trinity Horizon Project 1997/98; Articles written for Irishhealth.com 2003/2004; St Patricks Foundation monthly lecture notes for a specific period in time; Selection of Poetry including poems written by people I know; Quotations 1998-2017; other writings mainly with theme of social justice under the heading Citizen Journalism Ireland. Letters written to friends about life in Zimbabwe; Family history including Michael Comyn KC, my grandfather, my grandmother's family, the O'Donnellan ffrench Blake-Forsters; Moral wrong: An acrimonious divorce but the real injustice was the Catholic Church granting an annulment – you can read it and make your own judgment, I have mine. Topics I have written about include annual Brain Awareness week, Mashonaland Irish Associataion in Zimbabwe, Suicide (a life sentence to those left behind); Nostalgia: Tara Hill, Co. Meath.
This entry was posted in Uncategorized and tagged , , , , . Bookmark the permalink.

Leave a comment