The U.S. wants to contain China’s AI. Silicon Valley keeps using it

Rest of World · 1 month ago · 40 ● 74 sources

Anthropic warned that Chinese AI developers are distilling capabilities from American frontier models, but hours later Thinking Machines revealed its new foundation model incorporated Chinese models DeepSeek-V3 and Moonshot AI's Kimi K2.5, exposing the contradiction in U.S. containment efforts. Major AI laboratories worldwide including OpenAI, Anthropic, Google DeepMind, Meta, and Chinese firms all routinely use teacher-student model training and synthetic data generation, meaning the competitive question is now whose models become teachers rather than whether distillation occurs at all. As Chinese frontier models like Qwen and Ernie become embedded in global infrastructure—including Apple's China-specific AI stack using Alibaba and Baidu models—the U.S. faces a policy paradox: tightening controls on its own closed models while confronting openly distributed Chinese alternatives that remain beyond regulatory reach.