China's open-source AI rapidly closing gap with Silicon Valley

Chinese open-source AI models have closed performance gaps to four months behind US frontier models, with pricing 90% lower than Western proprietary systems. Beijing is positioning open-weight models as a strategic alternative to US-controlled AI, targeting adoption across the Global South. Your API and model costs just got undercut by 90% from a vendor your enterprise customers can now legally run themselves. The margin compression is real; the question is whether you stay on pricing or move upmarket into integration, compliance or domain-specific fine-tuning where US firms can still defend ground.