Former Google CEO Eric Schmidt has issued a stark warning that Chinese open-source artificial intelligence models could become the global standard, not because of superior quality, but because they are free.
Speaking on the Moonshots podcast released Tuesday, Schmidt said he worries most countries will adopt Chinese AI systems like DeepSeek and Alibaba’s Qwen simply due to cost constraints. “This produces a bizarre outcome where the biggest models in the United States are closed source and the biggest models in China are open-source,” Schmidt said. “The vast majority of governments and countries who don’t have the kind of money that the West does will end up standardizing on Chinese models not because they’re better, but because they’re free.”
The concern is more than theoretical. According to Bloomberg, downloads of Chinese models on developer platform Hugging Face have already surpassed U.S. alternatives. Alibaba’s Qwen models have accumulated roughly 385.3 million downloads compared with 346.2 million for Meta’s Llama. Chinese-origin derivatives now account for more than 40 percent of new language-model releases on Hugging Face, while Meta’s share has fallen to about 15 percent.
Silicon Valley Adopts Chinese Models
The shift is already influencing American companies. Airbnb CEO Brian Chesky revealed in October that his company “relies heavily” on Alibaba’s Qwen models for AI-powered customer service, calling them “very good, fast and cheap”. Venture capitalist Chamath Palihapitiya said on his podcast that a company he works with moved major workloads to Chinese startup Moonshot AI’s Kimi K2 model, citing cost advantages.
Sovereign AI Debate Intensifies
The growing debate over “sovereign AI” a country’s control over its AI technologies, data, and infrastructure has gained urgency. Nvidia CEO Jensen Huang told officials at the World Governments Summit in Dubai earlier this year that countries must build their own large language models to preserve cultural and technological independence. In November, Huang warned that “China is going to win the AI race,” before clarifying that China was “nanoseconds behind” the U.S.
Schmidt, who led Google from 2001 to 2015 and now runs aviation startup Relativity Space, called the open versus closed-source divide a potential geopolitical fault line. The trend raises concerns about data privacy, national security, and America’s competitive edge in AI.
Source: Business Insider,
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