A Chinese startup, Moonshot, launched its Kimi K3 artificial intelligence model in July, which was marketed as being able to match the capabilities of US rivals, such as OpenAI's ChatGPT, at no cost. The model experienced immediate success, with new subscriptions suspended just two days after its launch due to overwhelming demand that exceeded its computing capacity.
This development is seen by some as a potential challenge to the US's dominance in AI. Edoardo Campanella of UniCredit notes that Beijing is pursuing a clear AI strategy, aiming to stay close to the technological frontier, diffuse its models globally, and set international standards. Campanella suggests that if this strategy succeeds, it could disrupt the global economy and the global balance of power.
The emergence of free Chinese AI models could also have significant implications for global markets. Until now, confidence in US technological prowess has driven massive investment in technology companies, reflected in Wall Street share prices. However, if China can develop and offer AI models at lower costs or for free, investors may begin to question whether the substantial investment in US tech companies justifies their high share prices, potentially leading to a stock market bubble bursting.