Chinese open-source AI is starting to win over U.S. businesses

Welcome to Eye on AI.

Beatrice Nolan here.

In today’s issue: Google DeepMind is losing its grip on elite AI talent, new data shows DeepSeek seeks $7.4 billion at a $74 billion valuation.

OpenAI data-center head leaves amid broader exodus.

And OpenAI releases more details on the Hugging Face hack.

Enterprises are starting to look beyond America for their AI needs.

As Chinese open-weight AI models increasingly close the gap with their closed-source U.S. counterparts, more enterprises are warming to the idea of using Chinese alternatives.

It’s easy to see why: open-weight models offer companies more opportunities to fine-tune AI models, are much cheaper, and generally give enterprises more control, including more assurance that their data isn’t being used to train potentially competing products.

While Anthropic and OpenAI still dominate how American businesses buy AI, new spending data suggests that at least a minor shift is underway.

According to Ramp’s latest AI Index —which tracks token and subscription spend across its customer base—the share of businesses paying for model serving platforms, which give companies access to open source and Chinese-developed models, rose to 6.1% of total AI-spending businesses in July, up from 4.5% in January 2026.

The shift may show increased enterprise interest in open-weight models such as Moonshot’s Kimi K3, which made waves on its release for being both an unusually large open-weight model but also one that showed coding and agentic performance close to leading proprietary systems.

Z.AI, another Chinese AI lab, this week confirmed that it built Ox Alpha, a previously anonymous model that had been performing well on AI benchmarks and gained enthusiastic reviews from AI developers over the weekend.

The company has renamed it GLM-5.3-Flash and said it will charge $0.15 per million input tokens and $0.50 per million output tokens—another aggressively priced Chinese offering in a market where DeepSeek and Moonshot have already put pressure on rivals’ pricing.

Z.ai is also thought to close to releasing a larger version of GLM-5.3 that many believe will rival some of the best models from Anthropic and OpenAI in cyber capabilities, potentially a watershed event that many fear will usher in a new era of AI-powered cyber attacks for which industry is woefully unprepared.