Why China is giving away its best AI models

Silicon Valley has spent much of the past week on red alert, digesting the arrival of Moonshot AI’s Kimi K3, a Chinese AI model that can allegedly beat some of the best systems built by US companies at a fraction of the cost. Why China is giving away its best AI models Chinese labs like Moonshot are forcing OpenAI, Google, and Anthropic to rethink what they lock away. Chinese labs like Moonshot are forcing OpenAI, Google, and Anthropic to rethink what they lock away. Its performance alone would have been enough to intensify the rivalry between the US and China. But Moonshot’s plan to release the model’s weights for free — and its clear targeting of US users — has fueled deeper unease about whether closed American models can continue to dominate as increasingly capable open alternatives enter the market. Open-weight models give developers far greater control than proprietary systems, allowing them to inspect how the AI functions, run the AI locally on their own infrastructure, customize the systems, and build new products without depending on a single provider. They’re often a lot cheaper, too. That raises an obvious question: Why would an AI company spend vast sums of money training an AI model, only to give away some of the most valuable parts? Kimi K3, like other open-weight AI models, isn’t fully “open.” In software, “open source” has a settled definition: Source code is publicly available to use, modify, and redistribute freely, only requiring that this is also done openly. AI systems are more complicated, and very few are truly open in the traditional software sense. Most companies instead release something called model weights — the numerical parameters learned during an AI’s training period — while keeping other crucial components, including training data, code, model architecture, and configuration methods, private. Most also come with restrictive licenses limiting how they can be used or redistributed. Together, this means open-weight AI cannot be re-created from the ground up in the way true open-source software can. But it does provide enough power and flexibility that a company can make money off of it. “A free set of weights is not a free AI service.” “A free set of weights is not a free AI service,” said Fordham Law School professor Chinmayi Sharma. “A company can give away the model weights while making money elsewhere in the stack.” There are ample opportunities to do so. Running a model still requires computing infrastructure, engineering, security, maintenance, and support, all of which companies can charge through hosted access or other arrangements. For some companies, the payoff may be broader, such as an increased demand for cloud computing services or advanced computer chips. Openness can also be a powerful strategy for gaining a competitive edge. Releasing a model’s weights can encourage more companies and developers to use it, which in turn can lead to an entire ecosystem of tools and infrastructure being built around it.…