China’s AI race is heating up as accusations fly over model distillation, with the White House blaming Moonshot AI for allegedly copying Anthropic’s tech — echoing past claims against Alibaba. Meanwhile, open-weight Chinese models are spreading fast across platforms, bypassing safety controls and sparking a fierce debate in Silicon Valley. Big players like OpenAI and Anthropic fear loss of control and IP, but hundreds of startups — including YC-backed firms — argue restricting these models would stifle innovation and empower monopolies. Investors like Bill Gurley and Chamath Palihapitiya back the open-source movement, calling out U.S. tactics as protectionist, warning that framing China as the villain may just be a way to shield big AI labs’ profits. The core question: who wins when innovation is pitted against control?
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