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How Much of Silicon Valley Is Built on Chinese AI?
(www.bloomberg.com)
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this post was submitted on 15 Nov 2025
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It's hard to see the economic merit in China's investments in AI, or anyone's investment in AI for that matter but the market has never really been rational. But China's investment in particular is confusing since it's open source.
I think what they're going for is to undermine the American AI market. That money flowing into big tech has strategic consequences for China, and economic advantages for America. It's in China's interest to demonstrate cheap and free AI to cut off that funding to US tech.
There are valid use cases for AI that will achieve tanglible prosuctivity boosts. The consumer-side of AI is just what takes the media focus point. The open source strategy is as you said; to undermine US capital concentration in Silicon Valley.
AI is being developed in China in a very different way from the west because the material conditions in China are different. https://dialecticaldispatches.substack.com/p/the-ghost-in-the-machine
The reason Chinese companies release LLMs as open source isn't actually confusing either. It's not being treated as a product, but rather as foundational technology that things will be built upon. Think of it the same way as the current open source infrastructure that underpins the internet. Most companies aren't trying to monetize Linux directly, rather they use it to build actual products on top of.
However, dragging the US into a tech race it can't win is also a factor whether it's done intentionally by China or not. https://dialecticaldispatches.substack.com/p/the-ai-race-isnt-about-chips-its