US falls behind China in open-source AI race, prompting Trump’s response

President Trump’s AI Action Plan has elevated open-source AI to a national priority, marking a strategic shift as the U.S. seeks to counter China’s growing dominance in open-source artificial intelligence development. The move comes after Chinese models like DeepSeek-R1 gained massive adoption among American developers, highlighting how U.S. reliance on proprietary AI systems may be undermining the country’s competitive position in the global AI race.

The big picture: China has emerged as the leader in open-source AI development while major U.S. companies have increasingly moved toward proprietary, closed systems accessible only through APIs.

• DeepSeek-R1 became the most-liked model of all time on Hugging Face, a platform where developers share AI models, within days of its release, spawning thousands of variants used across American tech companies and research labs.
• Chinese research groups are now “pushing the frontiers of open-source AI, sharing not only powerful models, but the data, code and scientific methods behind them.”
• Meanwhile, flagship U.S. models like GPT-4, Claude and Gemini are “no longer released in ways that allow builders more control,” remaining locked behind proprietary interfaces.

Why this matters: The shift toward closed AI systems threatens America’s foundational advantage in artificial intelligence innovation and creates strategic vulnerabilities.

• American scientists, startups and institutions are increasingly building on Chinese open models because the best U.S. models are inaccessible for modification or independent deployment.
• Open-source AI “increases a country’s velocity in building AI” by fueling rapid experimentation, lowering barriers to entry and creating compounding innovation effects.
• Clément Delangue, CEO of Hugging Face, warns that “if the U.S. falls behind in open-source today, it may find itself falling behind in AI altogether.”

Historical context: This represents a dramatic reversal from the U.S.’s previous leadership position in open AI development.

• Between 2016 and 2020, American research labs from Google, OpenAI, and Stanford “released breakthrough models and methods that laid the foundation for everything we now call ‘AI.'”
• The transformer architecture—the “T” in ChatGPT—emerged from this open culture of sharing research and development.
• Hugging Face, the AI model-sharing platform, was created during this era specifically to democratize access to these breakthrough technologies.

Market implications: The Chinese advantage in open-source AI is creating ripple effects across financial markets and the broader tech ecosystem.

• The U.S. stock market “took a tumble” within a week of DeepSeek’s release as investors recognized the competitive threat.
• Chinese companies like DeepSeek and Alibaba are “strengthening their positions as foundational layers in the global AI ecosystem.”
• American AI products, research and infrastructure are increasingly dependent on tools and models developed overseas.

What proponents argue: Open-source AI development offers critical advantages beyond just competitive positioning.

• Open models provide transparency and auditability, allowing governments, educators, healthcare institutions and small businesses to adapt AI without vendor lock-in.
• The approach supports democratic governance by ensuring AI systems can be inspected and understood rather than operating as black boxes.
• Existing U.S. efforts like Meta’s Llama family have already generated “tens of thousands of variations on Hugging Face,” demonstrating the innovation potential.

The path forward: Industry leaders advocate for renewed American commitment to open-source AI development backed by policy support.

• Delangue calls for the American AI community to “drop the ‘open is not safe’ narrative” and return to open science principles.
• Promising developments include continued work from the Allen Institute for AI, startups like Black Forest Labs building open multimodal systems, and OpenAI’s suggestion it may release open weights soon.
• The strategy aims to “restart a decentralized movement that will ensure U.S. leadership, built on openness, competition and scientific inquiry.”