Behind China's rapid AI ascent

Deirdre Bosa explains AI model distillation and how it helped Chinese AI labs catch up. She reports that Chinese open-source models have surged in usage from 20% to 50% while US models declined, driven by innovation and open-source dynamics. The piece highlights Anthropic's accusation against Alibaba and the broader fight over using models to train others, as open-source from China challenges the dominance of closed AI systems. - AI distillation allows smaller models to learn from bigger ones - Chinese labs used distillation to close the gap with US frontier models - Chinese open-source model usage share rose from ~20% to ~50% from June 2023 to June 2024 - US model usage share fell from 74% to 32% in the same period - Anthropic accused Alibaba of using its models for distillation, but legal recourse is limited - Open-source AI from China challenges the idea that only costly closed models capture value - Industry insider says Chinese AI research is competitive or ahead regardless of distillation