---
title: "America sells the cake; China hands out the recipe"
description: "Washington wants the world to pick an AI side, but Beijing’s cheap open models keep winning customers"
author: "Tomasz Idle"
published: 2026-09-26T04:00:29.254Z
modified: 2026-09-26T11:47:18Z
url: https://rews.cc/a/america-sells-the-cake-china-hands-out-the-recipe-1884cf
language: en
tags: ["ai", "china", "trump", "openai", "deepseek", "tech", "world"]
publisher: "Rews (https://rews.cc)"
---

# America sells the cake; China hands out the recipe

*Washington wants the world to pick an AI side, but Beijing’s cheap open models keep winning customers*

By Tomasz Idle · September 26, 2026 · https://rews.cc/a/america-sells-the-cake-china-hands-out-the-recipe-1884cf

## In brief

- Trump launched the Pax Silica alliance last year; Xi’s rival World AI Cooperation Organization has recruited 29 countries including Russia, Indonesia and Pakistan
- Chinese models’ share of global usage rose from under 15% to over 54% in a year, led by DeepSeek, per OpenRouter data cited by CNN
- US firms including Airbnb, DoorDash and Shopify have adopted open Chinese AI models for their lower cost and flexibility
- Anthropic and OpenAI accuse Chinese labs of distilling their models; Beijing rejects the claims and DeepSeek and Moonshot declined comment
- The Trump-Xi summit produced only a formal AI dialogue channel, with analysts citing entrenched mistrust between Washington and Beijing

Imagine a bake-off between two pastry empires. One sells exquisite cake by the slice, behind a counter, at prices that make you check your bank balance first. The other stands in the street handing out recipe cards and free starter dough, asking nothing. The first empire will insist, correctly, that its cake is better. The second will feed more people.

This is roughly the state of the great US-China artificial intelligence contest, which Washington has framed as a single existential race with one winner. President Donald Trump put it plainly earlier this month: *We’re leading China in AI…and frankly, I want to keep it that way, because whoever wins AI wins.* The United States holds the obvious cards — the pioneering labs, the most advanced chips, the deepest pockets — and it has been using that dominance to press other countries to choose a side.

Last year Trump assembled *Pax Silica*, an alliance meant to reduce reliance on China for AI supply chains; more than two dozen countries and the European Union signed on. In July, Xi Jinping answered with the World Artificial Intelligence Cooperation Organization, which has recruited 29 countries, including Russia, Indonesia and Pakistan, around a competing idea: open models that anyone can download, customize and run without paying hefty fees to American firms like Anthropic and OpenAI.

The awkward part, for the side that charges admission, is that the recipe-card strategy is working. China made the turn toward openness partly out of necessity: US export controls cut off the most advanced chips, and smaller capital markets made it hard to outspend Silicon Valley on giant proprietary systems. So Chinese developers competed on access instead. According to leaderboard data from OpenRouter, a marketplace for AI models, Chinese models went from less than 15% of global usage to over 54% in the space of a year, led by DeepSeek.

The customers are not only in the developing world. American companies including Airbnb, DoorDash and Shopify have adopted Chinese models, attracted by lower costs and the freedom to customize. For a developer in the Global South, Eric Olander, editor in chief of The China-Global South Project, told CNN, an inexpensive model from DeepSeek or Moonshot is simply more useful than a slightly smarter American system that demands an expensive subscription and a foreign cloud provider.

Olander is also skeptical that the race has a finish line, or even a scoreboard. Winning by what measure? *Is Apple winning the mobile phone race? Fewer people use Apple products, but Apple eats up 90% of the profits,* he said. His guess is that AI ends the same way: the US keeps the profits, China collects the users. And the money may flow to the ecosystem rather than the models themselves — Huawei, ZTE and the other companies selling the services, hardware and support around AI, he noted, may do very well even if DeepSeek and Moonshot never do.

There is also the uncomfortable question of how much the lead is worth to an ordinary customer. Chucheng Feng, founding partner of the advisory firm Hutong Research, reduced it to arithmetic: *Do I want a model that costs 10 times as much but is six months ahead, or one that costs one-tenth as much but is only six months behind?* As capabilities converge, experts say, the gap between the frontier and the merely very good will matter less and less to most businesses.

## The recipe cards come with fine print

The appeal of China’s offer, though, depends on the recipes staying free, and that is not guaranteed. Alex Colville, an analyst at the Australian Strategic Policy Institute, expects Beijing to tighten the tap as its models grow more capable. *Beijing wants to export the country’s technology to bolster its international influence, but national security always comes first,* he said. He does not foresee total closure or total openness, but a mixture of both — possibly enforced through licensing rules that dictate where certain models, such as ones with Anthropic’s Mythos-like cyber capability, can be deployed.

Reva Goujon, a director at the Rhodium Group, put it more bluntly: China could be compelled to limit its most powerful open models to *avoid cyber anarchy*. *China’s strategy is only more compelling to the world so long as the models remain available and open,* she said. Governments pursuing sovereign AI on Chinese foundations now have to wonder how long the foundations will remain theirs to build on.

## Accusations at the summit

Washington, meanwhile, has escalated its own charge sheet, accusing China of *industrial-scale theft* of American trade secrets. Anthropic and OpenAI have both claimed that leading Chinese labs trained their models on outputs from American systems, a technique called distillation. In a report earlier this month, Anthropic detailed how DeepSeek and Moonshot allegedly forwarded some customer requests to Claude to train and improve their own models, exposing sensitive information in some of those processes. Beijing has repeatedly rejected the accusations; DeepSeek and Moonshot did not respond to CNN’s request for comment.

Goujon noted the accusation sits oddly next to the plumbing. *Since the US has a very leaky export control regime,* she said, *including a still gaping hole that allows Chinese access to US AI compute via overseas data centers, it’s very difficult to pinpoint just how much Chinese AI developers are relying on distillation.* The question, she added, is what the administration actually intends to do about it. Sanctions and restrictions on open Chinese models have been floated — and Nvidia, Meta, Microsoft and dozens of other companies responded with a July open letter warning against *sweeping restrictions* on open models. The bake-off, it turns out, divides even the American bakers.

All of this hovered over this week’s Trump-Xi summit, where AI was a stated focus, given the fears about the technology and the calls for global oversight. Xi told Trump the right thing to do was to *draw on each other’s strengths, not guard against each other* — a reference to Beijing’s complaints about US containment — and said the two sides could *continue their dialogue on AI, exchange views on its risks and benefits, and jointly prevent the misuse and abuse of AI.*

What the summit actually produced was that dialogue: a formal channel for the two sides to keep talking, a proposal that had been discussed before the leaders even met. George Chen, chair of digital practice at The Asia Group, said cooperation stays limited because trust does, adding that *Beijing continues to believe Washington seeks to contain China’s rise in AI and other emerging technologies.*

So the race that supposedly has one winner keeps refusing to produce one. The best cake in the world is still for sale, and the recipe cards are still free, and the street outside grows more crowded. History suggests that when one side sells the feast and the other hands out the flour, the smart money watches who learns to bake.