China Gave Its AI Away

China's 15th Five-Year Plan abandoned competing in semiconductor manufacturing and instead embraced open-source AI development, with companies like DeepSeek releasing models that match Western performance at drastically lower costs—DeepSeek's R1 cost $6 million versus GPT-4's $100 million. This openness strategy proved devastatingly effective, as Chinese open-source models jumped from 1.2% to 30% of global AI usage within months, with 80% of US startups now using Chinese base models for their core operations.