Chinese AI models gain US users with lower costs

Chinese AI models are attracting US users and companies because they are cheaper, open and increasingly capable. Mozilla CTO Raffi Krikorian switched to Moonshot’s Kimi K3 for many daily tasks after using Z.ai’s GLM-5.2, while Coinbase said it is moving to Chinese models to cut costs. Developers and executives described the tools as fast and good enough for routine work such as calendars, documents, email, lead generation and sales research.

The shift is sharpening competitive and policy tensions. US restrictions block China from some advanced technologies, and the Trump administration accused Moonshot of using “covert” but not necessarily illegal methods to build K3 using Anthropic’s Fable. Some US politicians and AI firms have alleged illicit “distillation,” while Beijing rejects the claims as “groundless.”

Adoption indicators are rising. Sensor Tower estimated Kimi had more than 930,000 downloads during the week after K3’s July release, an increase of 200% from the week before; in the U.S. it was downloaded around 86,000 times, a 387% jump. Chinese startups are also pushing open-source models globally, with President Xi Jinping backing broader AI access at a Shanghai summit. Financial sustainability remains a concern: Z.ai reported revenue surged 132% to 724 million yuan ($107 million) last year, while net loss jumped 60% to 4.7 billion yuan ($694 million).