Open models and practical propagation: China’s strategy for AI supremacy

AI competition between the United States and China has been presented as a race that will be won by whoever has the most advanced models. Nevertheless, China has opted for a different strategy, which is to create open models and practical AI applications to achieve greater immediate economic impact and international influence.

In Silicon Valley conferences, discussions, and corridors, the magic formula now being repeated everywhere is AGI (Artificial General Intelligence). For the giants in the field, like OpenAI, DeepMind, Anthropic, and xAI, developing AGI—an intelligence that performs better than humans in reasoning ability and broad skills—is the ultimate goal they aspire to, and to which they devote enormous efforts and epic levels of spending. Developing ever more advanced and innovative AI models is believed to be a way of moving one step closer to this goal. Whoever leads in AGI, it is repeatedly stressed, will have an unmatched economic, military, and social advantage. The United States government itself, in both Biden and Trump administrations, also considers that achieving AGI is the great national objective in the AI field, and that the USA must manage to do this before China does. The AI competition tends to be compared with the nuclear arms race. Indeed, the US Administration has named its current AI plan the new “Manhattan Project”.

However, the promise of AGI is based on a questionable premise. From the US standpoint, the power that produces the most advanced technologies, for example the one that leads in developing state-of-the-art AI models, will automatically gain geopolitical supremacy. Researchers in the field like Jeffrey Ding, for example, note that history shows that the power that gained most geopolitical influence because of major geopolitical transitions linked to General Purpose Technology (for example, the steam engine, electricity, and the Internet) was not the one that invented them but, rather, the one that was best able to disseminate them, to find practical applications for them, and to extend widely them in their economies, thus assuring the greatest impact in terms of growth and productivity. The effects of these types of technology usually appear after ten or twenty years, so the economic and subsequent geopolitical results tend to be long-term.

Unlike the United States, Beijing approaches AI competition more as a matter of widespread adoption and creation of practical applications than as an AGI race. As economist Keyu Jin has pointed out, in recent decades China has focused less on trailblazing technology (from 0 to 1) than on questions of scale and seeking to be more effective when bringing already existing technologies into the market (from 1 to n). It plans to pursue this strategy in the field of artificial intelligence as well. A few months ago, the Chinese government launched the “AI+” diffusion plan, which aims to disseminate and integrate AI by applying it in sectors including manufacturing, governance, healthcare, social welfare, and consumption. In a Chinese Communist Party Politburo AI study session last April, Xi Jinping emphasised the “deep integration” of artificial intelligence in the economy and society, and also the government’s “focus on the application aspect of AI technology”. Chinese scholars in the technology sector, Huang Ping for example, have also stressed the need to prioritise “innovative resilience” over “breakthrough innovations”. Although there are obstacles hindering the spread of AI in the Chinese economy, among them economic problems of local governments and the paucity of Chinese private investors, efforts are clearly moving in this direction.

In promoting this dissemination, China has pursued “open models” of artificial intelligence, which have the advantage of being free-of-charge, open source, and highly flexible. In the field of open AI models, Chinese companies currently outperform those in the United States, with products like the famous Deepseek and Qwen, which is developed by Alibaba Cloud, leading the rankings. These Chinese open models are especially useful for startups with limited resources, and are widely used by new ventures in both the United States and Japan. Models like Qwen stand out for their flexibility and efficiency, and the fact that they offer different sizes that can be integrated into everything from tiny drones to industrial machinery, as well as functioning as generative models along the lines of ChatGPT. Unlike the chip industry, which has benefited from large Chinese government subsidies, these open models have emerged from a network of competitive private companies and startups with origins in technological ecosystems of cities like Hangzhou, where local authorities have nurtured an environment of innovation and flexibility for the private sector.

The Chinese government itself has repeatedly presented its model for AI development as an alternative to the course chosen by the United States, arguing that AI should be a “global public good” that can aid the development of the Global South, rather than being wielded in a zero-sum competition like that promoted by Washington. Besides decreasing its reliance on models coming from the United States, the Chinese advancement of free, open-source AI models and practical applications is the mechanism by means of which Beijing is attempting to influence the development and governance of artificial intelligence on a worldwide scale. As Chinese analysts like Liu Shaoshan have indicated, the idea is that, if the world embraces Chinese models ahead of American ones, Beijing could lead the way in setting standards and values around this technology. Academic Di Dongshen describes this approach in terms of the Maoist strategy of “encircle the cities from the countryside” (农村包围城市) which, in this new context, implies expanding in the Global South before conquering western markets. On the international scale, propagation may once again matter more than the most ultra-modern innovation.

Widespread adoption of open Chinese models can contribute to the integration of AI in the world economy with productivity gains that are greatly needed by economies like Europe’s. However, these models raise concerns about built-in censorship of politically sensitive topics in China, for example about whether they could be extensively used in education or decision-making, and there are suspicions that they might present “backdoor risks”, although the very nature of open models, which offer more transparency and controls than closed systems, does to some extent allay these fears. In the long term, the fundamental challenge is that large-scale adoption of open Chinese models could position China as a leader in this technology with the consequent power to influence the standards, development, and values intrinsic to them. Technological innovations are not neutral and the path they take depends on political decisions. The evolution of the open Internet we now take for granted came about because of the influence and economic and political interests of the United States. An artificial intelligence globally led by Beijing would, for better or worse, be an AI with “Chinese characteristics”, with all the ensuing geopolitical implications.

Keywords: AI, United States, China, open models, AGI, Silicon Valley, technology, geopolitics

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E-ISSN 2014-0843