How is China using open-source AI to gain an advantage over the US?

China is leveraging open-source AI to gain an advantage over the US by rapidly developing and releasing cost-effective, high-performance models that rival American counterparts, such as DeepSeek's R1 model, which competes with those from OpenAI and Google [3]. This approach has led to a surge in market share, with Chinese open-source models capturing about a third of global AI usage by the end of 2025, up from near zero in mid-2024, primarily due to their affordability and accessibility, eroding US dominance [5]. By freely releasing models, China creates economic pressures on US closed-source providers like OpenAI and Anthropic, while drawing demand from the US itself and spreading adoption globally, including in Silicon Valley and via platforms like Hugging Face [2][4][12]. Additionally, policy support in China boosts development of open-source tools like OpenClaw, fostering a self-reinforcing competitive edge, though internal security crackdowns highlight some limitations [1][7][8]. Accusations from OpenAI suggest China is distilling US technology to accelerate this replication cheaply, further intensifying the rivalry [11].