Chinese company Moonshot AI this week launched a new version of its Kimi model, generating another wave of discourse about China and open source AI.
moon shot said that although Kimi K3 “still lags behind the most powerful proprietary models, Claude Fable 5 and GPT 5.6 Sol,” the new open source model “demonstrated frontier-level performance across our entire set of evaluations, consistently outperforming other models tested.” Independent analysis of Arena.ai and Waltz AI He also suggested that Kimi is competitive with flagship frontier models.
The announcement, which coincided with a speech by Chinese President Xi Jinping at the World AI Conference in Shanghai, appears to have spooked Wall Street, with Nasdaq falls approximately 1% on Friday as investors sold shares of chip companies such as Nvidia.
Many of the resulting posts from tech industry figures will be familiar to those who remember the debate after another Chinese company, DeepSeek, released its open source R1 model in January 2025. Except now everything seems intensified after The Trump administration’s tariff war with Chinarepeated fights over the national security threat allegedly posed by Anthropicand how Top AI companies prepare to finally go public.
For example, David Sacks, former Trump administration AI czar and now co-chair of the President’s Council of Science and Technology Advisors, contrasted Kimi’s progress with a United States that is “getting tangled up: politicians and bureaucrats are banning new data centers, piling on state regulations, and pushing for new federal agencies to pre-approve frontier models. This is how the AI race is lost.” (The news also gave him an excuse do a dig in Anthropic, calling Claude an example of “woken lobotomized models”).
And the former CEO of Uber Travis Kalanick echoed the complaints that the Chinese are “distilling” (i.e. receive training on the results of) American AI models.
“If distillation is not mandated, then everyone should be able to distill from everyone else…otherwise they would have one arm tied behind the backs of American models,” Kalanick wrote. (Of course, American models have also been built on the Chinese ones, specifically kimi.)
Meanwhile, OpenAI head of strategic futures Dean Ball saying that Kimi is “a very good model” whose performance probably cannot be “explained by distillation or anything like that,” adding that he is “personally surprised that the Chinese state continues to allow open sourcing of such good models, given the potential risks.”
In fact, Ball suggested that “the likely outcome of a world dominated by an open weight model is total AI communism,” where AI is treated as “a ‘public good’ that will ultimately be provided by the state as a kind of ‘digital public infrastructure’.”
“This future seems like a dystopian hell to me, but I’ve never met an open weight advocate who wouldn’t admit that this is where things end,” Ball said. He even suggested that the Trump administration (the one I used to work for) will eventually realize that it needs to “create large amounts of regulatory risk around the use of Chinese open weight models.”
“There is no need to ‘ban open source’ (one of the sillier motifs in the AI policy debate),” Ball said. “You just have to order each agency to issue soft laws that create FUD (fear, uncertainty and doubt). ‘A Federal Reserve advisory bulletin found that there may be backdoors in Chinese AI models.’ It doesn’t have to be that well justified. It just creates enough regulatory risk that all regulated companies will back off.”
However, Shakeel Hashim, editor of the AI-focused publication Transformer, argued that Much of the concern is overblown.both because Kimi “probably does not have dangerous cyber capabilities” and because the Chinese government will face “extremely similar incentives” to restrict open Chinese models once they develop those capabilities.
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