China is reportedly planning to require government approval before its leading AI startups can accept US investment, mirroring existing US outbound investment restrictions on Chinese tech. Simultaneously, the Trump administration announced a crackdown on Chinese firms using US AI models for model distillation — training their own systems on accessible US models like Meta's Llama. Together, these moves represent a 24-hour escalation in the US-China AI rivalry, extending the conflict from chip export controls into capital flows and model training practices. Chinese AI startups such as Moonshot AI, Zhipu AI, and MiniMax face growing uncertainty, while DeepSeek's latest model claims near-frontier performance using Huawei chips, suggesting export controls are not closing the capability gap as intended.
Sort: