{"text":[[{"start":6.65,"text":"More than a year after the DeepSeek shock, another “open” AI model from China has sent a severe tremor through Silicon Valley. This time, it may be harder for the US AI companies to shrug off the challenge. That has made a response from America all the more likely — with unpredictable consequences for both the AI companies and their customers."}],[{"start":28.299999999999997,"text":"The latest shockwaves were caused by last week’s launch of Kimi K3, a model from Chinese start-up Moonshot that has come close to matching the most advanced competitors from the US frontier AI labs."}],[{"start":39.65,"text":"The angst this has induced is reminiscent of the worries over DeepSeek’s R1. Its low training costs appeared to threaten the far more expensive models being developed in the US. Wall Street came to terms with that threat, believing that US frontier models still had a meaningful lead, even if it had been cut to less than a year. But Kimi K3 — along with other Chinese models like last month’s GLM 5.2 and the Qwen 3.8 model that Alibaba announced at the weekend — have all but erased the time advantage."}],[{"start":70.85,"text":"Some US officials have been quick to accuse Moonshot of copying US rivals (using a technique called distillation) and getting around export controls on advanced US chips. There are signs, though, that innovation is playing an increasingly important part."}],[{"start":86.1,"text":"Even a top executive at OpenAI conceded that Kimi K3’s advances did not look like the result of copying, while its architectural improvements over earlier models have drawn admiration in the US. This looks like real competition, not just emulation."}],[{"start":103.5,"text":"In economic terms, the competitive effects are not clear-cut. Open-weight models (a limited form of open-source software) are cheaper because the companies that develop them do not look to recover their training costs, and because they are run either on a customer’s own systems or hosted by cloud-computing companies that compete on cost."}],[{"start":125.15,"text":"Very large models like Kimi K3, though, are expensive to run. Also, the true cost to a user is not the price of a token (the basic unit of output, on which pricing is based), but the cost of completing a task. Some models use fewer tokens to do that, or generate fewer hallucinations (meaning less human labour is needed to validate their responses)."}],[{"start":146.65,"text":"That said, the latest spate of Chinese models looks set to bring greater price competition to the most advanced forms of AI. The question now is how US AI companies, as well as policymakers in Washington and Beijing, respond."}],[{"start":160.25,"text":"The US frontier labs need to accelerate their shift from selling raw intelligence to packaging it into agents that can complete more valuable tasks. This worked with coding, but models like Kimi K3 are catching up fast on that front, forcing the labs to keep finding new uses."}],[{"start":177.15,"text":"The stiffer competition also increases the urgency for frontier labs to get closer to their users, tapping customer data and business context to improve their relevance, while embedding their models into customers’ workflows. The question for OpenAI and Anthropic is whether they can show real headway on these measures in time for their mammoth IPOs."}],[{"start":199.20000000000002,"text":"The geopolitical ramifications are harder to predict. The Kimi K3 launch came just as President Xi Jinping was promoting open source AI as central to China’s technology pitch to the world. Just days later, though, the FT reported that the country was considering export controls on some technologies — including restricting access to the most advanced models’ weights, the parameters which shape how they respond."}],[{"start":226.50000000000003,"text":"This points to an emerging tension in the tech strategy of China Inc. Alongside an export-led drive geared to wide availability and low cost, there is a growing awareness of the need to defend homegrown technologies. It is not clear how that will play out."}],[{"start":241.45000000000002,"text":"Washington, for its part, shows every sign of a knee-jerk response. Treasury secretary Scott Bessent signalled a possible crackdown on Chinese companies that use distillation — though IP leakage from models that are publicly available would be hard to prevent."}],[{"start":258.55,"text":"The US has other reasons to try to stem advanced Chinese AI, for instance the cyber risk the models might represent. Even if it succeeded in making its domestic market a protected zone for US frontier models, though, the result might be counter-productive in global terms. Companies in the rest of the world would still be able to access cheap Chinese models. And simply barring their use by US entities wouldn’t solve the cyber threat."}],[{"start":290.5,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1784902041_2977.mp3"}