A great debate A proliferation of Chinese-made AI tools is brewing in Silicon Valley, particularly “open-weight” AI systems that, by some measures, can rival or even surpass some of the best American models. My WIRED colleague Hugo Lowell has written about the Trump administration’s internal debate over how to handle these Chinese models. Among the Valley’s artificial intelligence companies, the issue is proving even more divisive.

A major concern in both DC and the Valley relates to distillation, in which a less capable AI model is trained with the results of a more powerful one. In June, Anthropic accused Chinese tech giant Alibaba of illicitly stealing its intellectual property through distillation attacks. Then, earlier this week, the White House said it believes Beijing-based Moonshot AI had developed its Kimi K3 model by distilling Anthropic’s Fable 5 model.

Another major concern is the speed with which Chinese models are appearing and spreading. An open weight AI model has its core components made public, so that it can be adjusted to meet user needs. But they don’t have the kind of barriers that Anthropic has built its reputation on. Yasir Atalan, deputy director and data fellow at the Center for International and Strategic Studies, notes that the main benefit of open-weight AI models is their speed of diffusion. They can spread especially easily “through Hugging Face, GitHub, cloud providers, on-premises deployments, and third-party inference platforms,” he writes. If you are anthropic and have created a cult around security and charge for access to your large, expensive proprietary models, you have every reason to want to regulate this.

But some Silicon Valley startups (not the trillion-dollar ones like OpenAI and Anthropic) really don’t want the US government to impose restrictions on these AI models. On Wednesday, a group of more than 200 startups called the Little Tech Association sent a letter to Michael Kratsios, a science adviser to President Donald Trump, and U.S. Commerce Secretary Howard Lutnick, pushing against an outright ban on open-weight AI models. The group, which includes the famous startup incubator YCombinator, has argued for certain safeguards, but says denying Americans access to AI models abroad would weaken American startups and create a monopoly among AI giants.

Bill Gurley, the legendary technology investor and longtime partner at Benchmark Capital, has publicly argued in favor of letting “the free market work.” In an extensive blog offering a brief history of open source software, Gurley writes that open weight models avoid lock-in, encourage true academic research, and are critical for capital-constrained startups.

“Every AI startup, every individual developer, every two-person team building a product on top of an AI infrastructure depends on having access to good models at affordable prices,” Gurley says.

Chamath Palihapitiya, one of the All inclusive podcast hosts, wrote on His co-host and fellow VC Jason Calacanis moved on. “Dad Trump, protect us!!!” he wrote in X, with an alarming number of crying and laughing emojis.

This stance by some of Silicon Valley’s most ruthless capitalists might at first seem counterintuitive. Why allow a foreign adversary’s technology to flourish in the United States? It’s as if the United States had just a 1-0 lead in the AI ​​World Cup, a slightly uncomfortable lead, and the crowd was chanting for the opposing team to get a free kick.