China now holds 14 of top 20 global AI model positions

China has launched an aggressive campaign to challenge US dominance in artificial intelligence, with domestic AI models now rivaling Western competitors like ChatGPT at a fraction of the cost. The push reflects Beijing’s 2017 ambition to become the world’s leading AI power by 2030, backed by nearly $100 billion in projected spending for 2025 alone and a strategy that leverages open-source development to circumvent US technological restrictions.

The big picture: China now holds 14 of the top 20 global AI model positions according to OpenCompass rankings, with nine being open-source compared to zero from Silicon Valley companies.

• Chinese startups like DeepSeek have created large language models that deliver comparable performance to top Western brands while using less computing power and cheaper hardware.
• Major tech giants Alibaba and Tencent have launched powerful new AI models and announced global data center expansion plans, signaling serious intent to compete internationally.
• By July 2025, Chinese firms had released more than 1,500 large language models—representing 40% of the 3,755 models released globally by mid-year.

Key advantages driving China’s progress: The country’s massive online population of over one billion users provides an ideal testing ground for rapid AI product scaling and adoption.

• Chinese models are specifically designed to run on cheaper hardware, making them far more cost-efficient to deploy than Western alternatives.
• Open-source strategies give developers free access to cutting-edge tools, while Western rivals often keep theirs behind paywalls.
• “China is now moving at the same speed as the US,” Pedro Domingos, a computer science professor at the University of Washington, told DW. “They’ve caught up over the years and are now at the frontier, trying to pull well ahead.”

How US chip restrictions backfired: Washington’s export controls blocking China’s access to advanced semiconductors have inadvertently accelerated innovation rather than slowing it down.

• Beijing responded by banning imports from key US suppliers like Micron and doubling investment in domestic chip manufacturing.
• Chinese NVIDIA rival Cambricon Technologies reported a 14-fold surge in quarterly revenue, benefiting from AI startups seeking local alternatives to banned US chips.
• “US chip export restrictions to China are counterproductive. They incentivize firms like DeepSeek to optimize older hardware, advancing research,” Domingos explained.

Global market strategy: While the US leads in frontier research, China is gaining ground through international expansion and infrastructure deployment.

• Chinese companies like Alibaba and Huawei are building data centers and cloud platforms across Asia, Africa, and Europe, offering cheaper alternatives to US providers.
• Beijing is promoting AI governance frameworks internationally, aiming to shape global standards according to its national interests.
• The government wants to influence how AI systems interpret history, culture, and truth by promoting models trained on Chinese data and values.

What experts are saying: Industry leaders frame the competition as having broader geopolitical implications beyond technology.

• “Whoever controls the large language models controls the past and the future… Large language models shape reality and China wants models that reflect their version of it,” Domingos noted.
• Robin Feldman, director of the AI Law and Innovation Institute at UC Law San Francisco, described the AI race as a “new form of Cold War” that “will be won by the country that can develop and maintain the greatest lead in artificial intelligence.”
• NVIDIA CEO Jensen Huang warned against complacency, stating the US is “not far ahead” of China and noting that “Chinese society is very quick at adopting new technology.”

The challenge ahead: Questions remain about profitability and sustainability as intense competition floods the market with AI models.

• Beijing has urged the tech sector to avoid “disorderly” competition amid concerns about how many startups will achieve profitability.
• China still lags behind on advanced chip technology needed for the most efficient AI training, though this constraint is driving innovative optimization approaches.
• The authoritarian system’s tight control over freedom of expression raises questions about whether Beijing can truly win the AI race without open discourse and unrestricted information flow.