Cheap Chinese AI models are quickly gaining customers across the US market: This changes things

A flood of high-powered, cheap-to-use Chinese AI models are quickly amassing customers across the US – and experts are sounding alarms that America’s lead in artificial intelligence could be in danger.One such new open-source model, dubbed GLM-5.2, was released by China’s z.AI on June 16 and specializes in coding projects.The company claims that GLM-5.2 is about as advanced as some of the best models offered by Anthropic, OpenAI and Google.“Genuinely impressed, almost shocked, at how good GLM 5.2 by @zai_org is at coding,” Guillermo Rauch, the CEO of US-based AI firm Vercel, wrote on X.

“This changes things.”Mat Velloso, an AI executive who formerly held senior roles at Meta and Google DeepMind, wrote that he had spent “all day” using GLM-5.2.“First open model that passes the bar as a daily driver,” Velloso wrote on X.“Things are not going to be the same.”The Trump administration has been increasingly wary about China’s breakneck pace in AI development – with officials warning as recently as recently as April that China was engaged in “industrial-scale” efforts to rip off AI technology.OpenAI and Anthropic have accused Chinese firms of using a technique called “distillation” to extract data from American models.Chinese AI is gaining a foothold in the US market.

Of the 10 models included on AI marketplace OpenRouter’s most popular rankings, six were developed by Chinese tech firms, including DeepSeek, Tencent, Xiaomi and MiniMax.Z.AI’s leadership has begun to burnish its public profile.When SpaceX CEO Elon Musk predicted last week that a Chinese firm would catch up to Anthropic’s frontier models in “probably Q1” of next year, z.AI founder Jie Tang replied that it “won’t take that long.”Unlike subscription-based US models, many of the leading Chinese models are open-source — meaning they are readily available to the public and much cheaper to use for major projects.

In fact, the cost of AI tokens, a measure of...