Kai-Fu Lee, AI entrepreneur and former president of Google China, estimates that U.S. restrictions on advanced chips have helped Chinese companies develop open-weight models that now trail some American counterparts by only six to 12 months. He says profitability, rather than the pursuit of artificial general intelligence, is the primary objective of Chinese companies, as demonstrated by DeepSeek, Pinduoduo, Meituan and ByteDance. According to him, the shift toward open-source technology is driven mainly by market competition and investors rather than an organized government strategy, although government-linked investors took part in more than 140 Chinese AI deals in 2025. Lee adds that Chinese developers’ greater frugality can reduce costs to one-tenth of those of U.S. competitors, while the United States retains its lead in top-tier models, high-impact patents and company valuations, with OpenAI and Anthropic leading the sector.
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