• Chinese open-source AI models dominate global rankings.
• DeepSeek and Alibaba outperform Google and Meta.
• Strategy forcing reconsideration of closed-source AI approach.

Just over a year ago, OpenAI blocked Chinese developers – including those in Hong Kong and Macau – from accessing its GPT models, yet still allowing access by its developers based in countries from Afghanistan to Zimbabwe. The message was unmistakable: American AI innovation needed protection from Chinese competition.

Less than a year later, that strategy has spectacularly backfired. China’s open-source AI models now dominate global rankings, with Chinese companies DeepSeek and Alibaba delivering world-class performance that rivals – and in some cases surpasses – that of their Silicon Valley counterparts.

The rankings tell a story

Chinese open-source AI models have achieved top rankings in a global list on a benchmarking platform created by researchers at the University of California, Berkeley, according to LMArena. The rankings placed China’s Kimi K2, MiniMax M1, Qwen 3, and DeepSeek R1 variants ahead of models from Google and Meta.

This represents a turnaround from that day in July 2024, when OpenAI’s sent the implicit message that OpenAI’s valuable models needed to be safeguarded against potential misuse by China.

The open-source advantage

The tide has turned. With the December 2024 launch of DeepSeek’s free-for-all V3 large language model (LLM) and the January 2025 release of DeepSeek’s R1 (the AI reasoning model that rivals the capabilities of OpenAI’s O1), the open-source movement started by Chinese firms has sent shockwaves through Silicon Valley and Wall Street.

Open-source AI models – whose source code and model weights are available for anyone to use, modify, and distribute – encourage a collaborative approach to AI development.

Kevin Xu, founder of tech investment firm Interconnected Capital, explained the rationale to South China Morning Post (SCMP): “For Chinese start-ups like DeepSeek, adopting an open-source approach was an effective strategy for catching up, as it allowed them to use contributions from a broader community of developers.”

The results speak for themselves. As of mid-July, DeepSeek’s models held a 24% share in OpenRouter, a global marketplace for AI models, making it the second-most popular model developer, just behind Google’s, which commanded a 37% share.

Meanwhile, Alibaba’s Qwen family of models has become the world’s largest open-source AI ecosystem, with over 100,000 derivative models built on it, surpassing Meta Platforms’ Llama community, according to Hugging Face, the world’s biggest open-source AI community.

The momentum continues with Alibaba’s latest release of Qwen3-Coder, launched just this week as its most advanced agentic AI coding model. The open-source model has 480 billion parameters and is designed for high-performance software development.

Industry recognition and validation

The quality of Chinese open-source AI models has not gone unnoticed by industry leaders. Nvidia founder and CEO Jensen Huang has been particularly vocal in his praise, describing LLMs developed by Chinese firms – including DeepSeek, Alibaba Group Holding, Tencent Holdings, MiniMax and Baidu – as “world-class.”

At the China International Supply Chain Expo in Beijing this week, Huang said China’s open-source AI movement serves as a “catalyst for global progress,” and provides “every country and industry a chance to join the AI revolution.”

Strategic positioning and competitive response

The success of Chinese open-source models has prompted strategic re-calibrations in the industry. In contrast to the rapid pace at which Chinese companies are releasing their open-source models, OpenAI founder and CEO Sam Altman announced last weekend a delay to the company’s open-source LLM, originally slated to launch in the next few days, citing safety concerns and the need for additional testing.

Since OpenAI launched ChatGPT in November 2022, Chinese open-source AI developers have made strides in advancing their models. “Most open-source AI models from China are now at or close to frontier-level capabilities,”, rivalling proprietary systems from top US players, Xu said in the SCMP.

Government support and ecosystem development

China’s success in open-source AI isn’t accidental – it’s part of a broader national strategy. Its 14th five-year plan stressed the importance of open-source development, outlining plans to build local open-source AI communities, export open-source innovations internationally, and build AI to collect public data.

The ecosystem benefits extend beyond technology. One reason Alibaba opted to open-source its Qwen models was that it “democratises the use of AI” and “proliferates applications,” which would contribute to the company’s cloud computing business, chairman Joe Tsai said last month.

Real-world applications and cost benefits

The practical advantages are compelling. Liu Zhi, founder and CEO of Chinese headphone brand Oleap, provides a concrete example: With DeepSeek’s low pricing, Liu said the cost of using AI to generate meeting summaries on Oleap’s smart headphones dropped over 80% after it integrated an application programming interface (API) based on DeepSeek’s R1 model in February.

Chinese home appliance manufacturers like Midea Group and Haier, for example, are integrating DeepSeek technology into their televisions and refrigerators, while US companies like Nvidia and Amazon.com offer users access to DeepSeek’s models.

Challenges and geopolitical considerations

However, China’s open-source AI leadership faces significant headwinds. DeepSeek’s chatbot, for example, has been banned or restricted in countries including South Korea, Australia, Germany, Italy, and the Czech Republic because of data security concerns.

Interconnected Capital’s Xu said these moves were politically motivated rather than based on technical merit. “Putting a national label on open-source code or weights makes no technical sense,” he said.

The future landscape

The transformation appears irreversible. “The collective shift towards open source among Chinese AI companies is more than symbolic; it reflects a growing consensus that open source accelerates iteration, builds trust, and expands global influence,” said Adina Yakefu, an AI researcher at Hugging Face.

While open-source operating system Linux hasn’t replaced proprietary competitor Microsoft Windows on the world’s desktops, analysts said that this time around, China’s free-to-use AI models pose a serious challenge to US counterparts.

As Jensen Huang noted: “Don’t forget that open source has many global implications. Not only did the open-source models help the Chinese ecosystem; they are helping ecosystems around the world.”

The question is no longer whether open-source AI will challenge proprietary models, but whether the West can compete with China’s collaborative, accessible approach to artificial intelligence development. The future of AI may indeed be open – and increasingly shaped by Chinese innovation.