Irrespective of whatever the UK, France, India, or Germany say, currently the world of AI is firmly divided between two countries — The US and China. It is these two countries that are locked in a contest to win the future, and the road to that, obviously, runs through the present. 

In the fog of AI war, some things are not yet clear, and some viewpoints may seem misguided. So, take this one too with some scepticism. But I believe the last few weeks, and the last week in particular, show that the Chinese AI startups have not only caught up to the giants like OpenAI and Anthropic, they are in some ways surpassing them. This is very different from what we have heard all this time, the one in which most AI experts confidently claim the Chinese are 6 to 12 months behind the frontier models like the latest Claude or the latest ChatGPT. 

Last week the mystery of Ox Alpha was solved. As many had predicted, including this newsletter, it turned out to be the next-generation model from Zhipu AI, a startup that has heavy involvement of Tsinghua University. Ox Alpha, now revealed as GLM-5.3-Flash, is not exactly a frontier model, although it is no pushover. But then that is by design. It is actually a Flash AI model, which means a small model with parameter size of around 300 million, almost 3 to 6 times smaller than the frontier models like Claude Fable. It uses some new tricks in the way it organises and delivers its intelligence, which makes it clear that the next full model from Zhipu AI, which should have around a trillion parameters, would probably beat anything that Americans currently have. 

The release of GLM-5.3-Flash reveals something even more alarming, at least to American tech giants and those who are firmly in their camp. It is apparently powered entirely by Huawei chips. In a deliberate show of strength, Zhipu AI announced that for one week it would serve the GLM-5.3-Flash for free with capacity to handle 100 trillion tokens per day. This is some serious capacity and that it has been achieved without using Nvidia hardware means China has effectively bypassed the hardware ban that the US imposed on it to cripple its AI development. 

The overall change that the Chinese have brought to the AI world is beginning to make its mark. Last week, this newsletter talked about Qwen 2.8 27B and how that changes the game. This week it is GLM-5.3-Flash. Both models, as it has been the case until now, are available as open-weights. That means they can be run by anyone in the world locally, without using Chinese hardware. The cumulative effect of the Chinese approach has been that for the first time open-source AI models are now in the lead in terms of use. Running Chinese models, either locally or through services like OpenRouter, is much cheaper than using Claude or ChatGPT. 

The results are in. For example on Vercel, more users are now accessing tokens from open-source AI models. Companies like Thomson Reuters are taking open-weights Chinese models — in this specific case Qwen — and retraining them to create their own AI systems instead of relying on ChatGPT or Claude. Similarly Harvey, a US-based legal tech company, recently used Kimi K3, a Chinese model, to build its own local AI system and cut down reliance on Anthropic and OpenAI. 

It is, as if for the first, the Chinese AI companies are now ahead of the US tech giants in the AI race. Of course, the race itself is far from over. And given that OpenAI and Anthropic have sort of gone silent about their next models, we do not clearly know what they have in store. 

The silence can indicate two things: either OpenAI and Anthropic are recalibrating their entire AI strategy in the face of competition and price pressure from Zhipu, MoonShot and Alibaba. Or they have the next-gen AI models that are so good, something Sam Altman hinted at, that releasing them in public would be giving up on the advantage they hold. Irrespective, until OpenAI and Anthropic reveal their hands, it is safe to say that the Chinese are now no longer behind. They are right up there with the best that the US companies are putting out.