Silicon Valley Has Completely Divided Together with China’s AI

A great debate is brewing in Silicon Valley for the proliferation of Chinese-made smart devices, especially “openweight” AI systems that, in some ways, can compete with or even surpass some of the best US brands. My WIRED colleague Hugo Lowell you have written about the Trump administration’s internal debate over how to use these Chinese models. Among AI companies in the Valley, this issue shows a deep division.

The main concern in DC and the Valley has to do with water dilution, in which a limited AI model is trained for very powerful results. In June, Anthropic accused Chinese tech giant Alibaba of illegally stealing its IP through an attack. Then, earlier this week, the White House said it believed Beijing-based Moonshot AI had created its own version of Kimi K3 by removing Anthropic’s Fable 5 version.

Another concern is the rapid emergence and spread of Chinese brands. An open source AI has its main components exposed, so it can be modified to suit the user’s needs. But they don’t have the kinds of security that Anthropic has built its reputation on. Yasir Atalan, deputy director and data fellow at the Center for International and Strategic Studies, says the main benefit of light AI models is their speed. spreading. They can be easily deployed “through Hugging Face, GitHub, cloud providers, local deployments, and third-party platforms,” he is writing. If you’re Anthropic, and you’ve built a cult around security and charging for access to your big expensive models, you have every reason to want to improve this.

But some Silicon Valley startups, not trillions like OpenAI and Anthropic, don’t want the US government to put restrictions on these types of AI. On Wednesday, a group of 200 founders called the Little Tech Association sent a letter for Michael Kratsios, science adviser to President Donald Trump, and US Commerce Secretary Howard Lutnick are pushing to end the ban on AI-based technology. The group, which includes the well-known incubator YCombinator, has opposed other protectionist measures but says denying Americans access to AI models abroad would weaken US startups and create a monopoly among the AI ​​giants.

Bill Gurley, a well-known tech entrepreneur and longtime partner at Benchmark Capital, publicly argued against allowing “free market activity.” In a long blog which gives a good account of open source software, Gurley writes that rich models avoid lock-in, encourage real academic research, and are important for startups.

“Every AI startup, every individual developer, every team of two people building something on top of an AI infrastructure depends on having access to good models at affordable prices,” Gurley said.

Chamath Palihapitiya, one of the All-In podcast hosts, wrote on X that “persuading the US Government to protect frontier labs’s business strategy by using a Chinese boogeyman is a mistake… It is protecting the integrity of the 5,000 people who invest in OAI and Ant at the expense of anyone else. This would be a very stupid decision.” Her partner and fellow VC Jason Calacanis piled on. “Mr. Trump, protect us!!!!” he wrote on Xand an alarming number of crying-laughing emoji.

This from some of Silicon Valley’s most ruthless capitalists may at first seem like a contradiction. Why is foreign adversary technology thriving in the US? It’s like the US is just 1-0 down in the AI ​​World Cup, a little bit of a tight lead, and the crowd is calling for the opposing team to get a free kick.