AI models from Chinese labs are comparable in performance to the top systems from Silicon Valley.
But Chinese models are open-source, and are developed for a fraction of the cost and time.
They are also preferred by business users, which presents a serious problem for the valuations of firms like OpenAI, which owns ChatGPT. OpenAI’s most recent funding round valued the company at over $500 billion, which is also what is needed to develop the Stargate project. By contrast, the latest offering from Moonshot, the #2-ranked model, comes from a company valued at just $3 billion.
The investment thesis for the Magnificent 7 relies on users paying premium prices for access to proprietary systems. But even technicians working on Silicon Valley itself increasingly use Chinese models like Alibaba’s Qwen and DeepSeek, which are more up-to-date and affordable.
Closing scene, Huaxiacheng Park, Weihai
Resources and links:
Chesky Says OpenAI Tools Not Ready for ChatGPT Tie-Up With Airbnb App
https://www.bloomberg.com/news/articles/2025-10-21/airbnb-ceo-brian-chesky-says-chatgpt-integration-not-ready-for-airbnb-app
CNBC, Alibaba-backed Moonshot releases its second AI update in four months as China’s AI race heats up
https://www.cnbc.com/2025/11/06/alibaba-backed-moonshot-releases-new-ai-model-kimi-k2-thinking.html
Artificial Analysis Intelligence Index by Open Weights vs Proprietary
https://artificialanalysis.ai/
X, Deedy, Today is a turning point in AI. A Chinese open source model is #1.
https://x.com/deedydas/status/1986643204616450197
Bloomberg, Are DeepSeek Moments Now the New Normal?
https://www.bloomberg.com/opinion/articles/2025-11-17/ai-are-deepseek-moments-now-the-new-normal
Reuters, OpenAI hits $500 billion valuation after share sale to SoftBank, others, source says
https://www.reuters.com/technology/openai-hits-500-billion-valuation-after-share-sale-source-says-2025-10-02/
DeepSeek exposes a fundamental advantage of China’s system: their whole economy is open source
Tech stocks fall as China’s DeepSeek sparks U.S. worries about the AI race
https://www.nbcnews.com/business/markets/tech-stocks-react-chinas-deepseek-sparks-us-worries-ai-race-rcna189394
Investor’s Business Daily, Bursting AI Stock Bubble Gets Ugly — Erases $2.4 Trillion In Value
https://www.investors.com/etfs-and-funds/sectors/bursting-ai-stock-bubble-worsens-destroys-trillions-in-value/
