Chinese AI Models a Threat to US Interests, Market Veteran Says
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A market veteran warns that Washington's efforts to counter AI competition from China are largely ineffective.
By Samuel O'Brient
July 29, 2026, 5:46 PM GMT+2
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Chinese AI models are the latest concern for the AI industry, and investing veteran Ed Yardeni highlights the challenges US regulators face in containing them.
This summer, models like Moonshot AI's Kimi K3 have sparked Silicon Valley's vigilance. Yet, Yardeni argues, Washington might struggle to regulate Chinese tech companies' models effectively.
"Short of a ban on foreign open-weight models, Washington is using security advisories, limits on US closed-weight models, and congressional pressure on corporate adopters. But these actions have been toothless given the rapid adoption of Chinese open-weight models."
US chip stocks declined following the release of Kimi K3, reminiscent of the DeepSeek selloff in January 2025. However, DeekSeek's performance has not lived up to initial fears, and the Kimi K3 scare has subsided.
Yardeni emphasizes the risk posed by the rapid development of Chinese AI technology, stating: "Adoption is moving faster than policy." He believes US AI dominance could be threatened if regulators cannot adapt quickly.
He cites Anthropic's suspension of access to its Fable 5 model due to a dispute with the White House as a recent setback for US AI governance. While access has been restored, Yardeni argues that Chinese models have seized the opportunity to fill the gap in the market.
He highlights another challenge: Washington's difficulty in governing open- and closed-weight models equally.