China’s AI Rise: Open-Source Diplomacy and Engineering Culture - IRIS
China’s rapid progress in AI challenges US leadership and the narrative of its “financial exceptionalism” that underpins the asset bubble. It demonstrates what can be achieved when open-source collaboration, technical expertise, and industrial strategy align. Rather than a genius breakthrough, this advancement is rooted in engineering skills, rational investment and industrial organisation. China’s weak domestic demand also means it will increasingly include AI models and semiconductors as part of its mass export strategy. At the same time, China is pursuing a geopolitical ambition. By positioning itself as a champion of open-source AI, the country is leveraging technology as a tool for global influence, offering an alternative framework to proprietary systems built on unsustainable funding. This is striking given that open-source is ubiquitous in western digital technology and can even be seen as its foundation. Many U.S. AI labs, like the ill-named OpenAI, have drifted away from this logic amid the hype and financial excesses. Current developments rely on globally-shared engineering skills. The path to technological competitiveness is open to any nation – including those in Europe – that chooses to support broad scientific education, empower its younger generations, and reward inventiveness over bureaucratic inertia. With determination, resources, and industrial realism, catch-up remains within reach. Analysis by Rémi Bourgeot, economist and engineer, Associate Fellow at IRIS. The AI Race and the Open-Source Strategy The global AI landscape has been undergoing a shift far beyond Silicon Valley’s hyped labs since last year’s “Deepseek moment”. The United States still leads to some extent in cutting-edge AI models, which continue to set benchmarks in reasoning, coding, and multi-modal tasks. However, the rise of Chinese AI models like Moonshot AI’s Kimi K3 or DeepSeek V4 has introduced a new dynamic, with performance that rivals US models at a fraction of the cost. China is challenging […]
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