Chinese open models are proper competition that should be welcomed, not something to ban or treat as a danger, and open-sourcing is an old business strategy

They aren't a security threat — they're what competition looks like. — Bill Gurley is the president and founder of the P3 Institute, and a former venture capitalist.

Washington Post 2026-07-21 Bill Gurley

Context & Ripple Effects

The argument enters an active dispute over whether model origin should determine access. It directly counters OpenAI's call for restrictions on PRC-produced models while aligning with reporting that Chinese developers used open sourcing to work around constraints and draw on external refinement through global developer participation.

It also lands as open Chinese releases bring operating economics into focus: related coverage argues that scalable inference makes marginal cost and cost of goods sold newly central to the model business case. Gurley frames openness as competitive strategy rather than an exceptional security category.

First-order effects

Gurley adds an investor voice to the anti-ban side of the AI policy debate, challenging the premise that Chinese open models should be treated chiefly as a security danger.
The intervention puts open-model competition—not only frontier capability or geopolitical risk—at the center of how developers and policymakers assess Chinese releases.

Second-order effects

Companies advocating country-based model restrictions face a clearer counterargument: broad limits can protect incumbents and narrow the choices available to startups and users.
If open models remain broadly available, model providers must compete more visibly on deployment cost, support, and complementary products rather than relying solely on controlled access.

Third-order effects

The policy fault line is shifting from whether AI should be governed at all to which risks justify restricting model access by origin, and whether those rules preserve contestable markets.
Open-weight distribution could deepen a two-track AI market: tightly governed proprietary frontier services alongside globally reusable models whose commercial value is built through complements and lower operating costs.

The trend: AI governance is becoming a contest between security-based control of model access and an open-model competitive model that distributes capability beyond a small set of providers.

Discussion

@bgurley Bill Gurley on x
The way to think about “open” in software is being a low-cost producer (vs a high margin one). When a company (or 2) achieves record valuations in record time, that rightfully attracts competition (as it should). We need to let the free market work. https://www.washingtonpost.com…
@sriramk Sriram Krishnan on x
great piece from @bgurley on open weight models
@aravsrinivas Aravind Srinivas on x
Well said!
@adamthierer Adam Thierer on x
“Treating open-model AI instead as a danger to be licensed and contained is a category error, and would be a costly one. It mistakes the ordinary work of competition for a threat to be policed.” 🎯
@soubhikdeb @soubhikdeb on x
Really good essay from @bgurley on why open source is the competition that free market needs. The following para from the essay essentially captures the demand side. “Start-ups want open models, to build without a gatekeeper. Enterprises want them, because they don't want their
@sarthakgh Sar Haribhakti on x
“Sears was not allowed to outlaw Walmart. IBM was not allowed to outlaw Dell. The legacy airlines were not allowed to outlaw Southwest (though they tried). In each case, a comfortable incumbent met a rival with a lower cost structure, and in each case the incumbent had exactly
@dee_bosa Deirdre Bosa on x
“The open-model wave is not an attack on AI companies. It is the market responding to the fortune they say they are about to make. They called it forth themselves.” Gurley nails it. Open models are the market doing what markets do when incumbents are charging huge margins.
@saadgul10 Saad Gul on x
Interesting
@martin_casado @martin_casado on x
Excellent piece.
@andrewarruda Andrew Arruda on x
this presupposes the legal framework of china and the us are the same as it pertains to training AI, which, so far, they are not. china imposes no copyright liability for AI training @bgurley
@perrymetzger Perry E. Metzger on x
Really, really good opinion piece by @bgurley in the Washington Post.
@senatorshoshana @senatorshoshana on x
I am horribly late to discovering Bill but quickly becoming a huge fan of his thinking “The puzzle worth explaining is not why open models are free. It is why proprietary software has commanded enormous margins since the 1980s, with an artificial scarcity, fenced off by
@deanwball Dean W. Ball on x
Some observations on Kimi: 1. It's a very good model! I don't think its performance can be explained away by distillation or anything like that. In agentic coding sessions, it seems pretty much on par with the best public models of Q1 2026. In my fairly limited use, it also s…
@davidsacks David Sacks on x
I'm not sure whether Dean Ball is confessing to a regulatory capture strategy or simply predicting this will happen (he now says the latter). Either way, the weaponization of regulatory uncertainty as a competitive tool should be completely unacceptable. He argues there's no [ima…
@stratechery @stratechery on x
Who's Afraid of Chinese Models? Everyone is worried about Chinese models, but the frontier labs will be fine; we need to enable open U.S. alternatives. https://stratechery.com/...
@martin_casado @martin_casado on x
“Open-weight models are inherently decelerationist” .... this is a grossly incorrect statement with no supporting arguments or logic that is counter to the long arc of learnings of the industry over the last 50 years. What a stupid thing to say.
@benbajarin Ben Bajarin on x
Overall a great read and I agree with all of it by @benthompson [image]
@willmanidis Will Manidis on x
My friend Dean Ball has advanced an argument for the de facto protection of American frontier intelligence providers. Dean does not propose banning Chinese open-weight models. Banning things requires Congress. He proposes something more characteristic of the modern
@garrytan Garry Tan on x
Great reminder to stay frosty
@rabois Keith Rabois on x
Someone actually understands what is going on.
@jachiam0 Joshua Achiam on x
Some observations, in the wake of the Dean Ball open source discourse. In my long tenure at OpenAI and as a public commentator on social media, I never felt pressure from OAI leadership or the comms department to say or post anything; I always gave my own view. It's possible I
@dillon_mulroy Dillon Mulroy on x
actually an insane thing for openai's head of strategy to publicly say [image]
@jukan05 Jukan on x
It's no exaggeration to say I come to X for exactly this kind of intellectual elitism. This is basically porn to me.
@egrefen Edward Grefenstette on x
What the fuck did I just read?
@bubbleboi Bubble Boi on x
This is a level of having your head up your own ass I've never seen before.
@francoisfleuret François Fleuret on x
“Open-weight models are inherently decelerationist” You young people do not know, but we went through exactly the same kind of bullshit when linux started to get market shares.
@crypt0lake @crypt0lake on x
this post has dark energy very american bush-esque energy right here freedom is slavery type language grim
@wanguws Howe Wang on x
I give 6 months [image]
@blancheminerva Stella Biderman on x
It continues to be an excellent heuristic that when employees of trillion dollar corporations shake their fists and scream “you just want communism” you're doing the right thing.
@martin_casado @martin_casado on x
Do you know what open weights model actually decelerate? The formation and power of oligopolies. You know, those things which really do stifle innovation.
@buccocapital @buccocapital on x
OpenAI taking a page out of the Bush administration's playbook. You can get a smart-sounding person to justify anything! If you can get a Ivy League law professors to use constitutional theory of law and the concept of statehood to justify a proactive war on the abstract
@rnaudbertrand Arnaud Bertrand on x
This is a thoughtful post by the Head of Strategic Futures at OpenAI but his claim that “open weight models are inherently decelerationist” is fundamentally wrong. Yes it may be decelerationist for individual companies like OpenAI or Anthropic (and even that's not sure at all)
@cgtwts @cgtwts on x
“Open-weight models are inherently decelerationist”. [image]
@jaldrichpl Jonathan Aldrich on x
It's just so RICH that the Head of Strategic Futures at an organization that (A) was founded as a nonprofit (B) with a vision of promoting OPENNESS in AI and (C) is literally called @OpenAI is now throwing shade at open source / open weight models. How far they have fallen.
@albertwenger Albert Wenger on x
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” Upton Sinclair
@grady_booch Grady Booch on x
“Open-weight models are inherently decelerationist” Let me reframe that for you: “open-weight models undercut @OpenAI's ability to make piles of money for a product whose ROI is still a large negative number.”
@tetsuo_cpp @tetsuo_cpp on x
Babe wake up, new insufferable frontier lab employee tweet dropped.
@qualiascript @qualiascript on x
it's 2001. open-source Linux is better than Windows on servers. Steve Ballmer calls Linux “cancer”, “communist” and asks for it to be regulated away it's 2026. open-source LLMs are better than ChatGPT/Claude on costs. they are called “decelerationist” and “communist”
@drnicka Nick Almond on x
Unhinged shit from this OpenAI strategy bellend. He admits Kimi is as good as the frontier and it's not basic distillation. So can't just call it theft. So calls open models communist instead. Anything that is a “public good” is commie apparently. Somehow then makes the leap
@ruima Rui Ma on x
Oh look someone who works for OpenAI telling you that - AI is so dangerous! How can you let anyone but us handle it! - Anyone who lets other people use it basically just doesn't understand tech. They dumb boomers. We smart tho. Never mind their regulations actually show a
@pawelwargan Paweł Wargan on x
OpenAI's Head of Strategic Futures says that AI as a public good rather than a “market product” is a path towards a “dystopian hellscape” of automated communism. These people are fighting tooth and nail against the democratisation of technology — and they are losing.
@deepdishenjoyer @deepdishenjoyer on x
lmao openai admits it does not want fully automated luxury space communism, they are openly admitting they want technofeudalism where they own everything [image]
@thdxr Dax on x
“One probable outcome of an open-weight-model-dominant world is full AI communism” [image]
@signulll @signulll on x
i can probably take this thread point by point & counter it hardcore but the quote tweets have done that so it's not that interesting. but beyond that.. you as an openai head of policy simply cannot publicly post content where you blatantly introduce mechanics for fud
@jun_song Jun Song on x
An OpenAI (aka ClosedAI) executive is really out here saying the most absurd things. They're claiming that open-source AI is decel and wants a dystopia—the biggest load of nonsense I've ever heard. It's pretty obvious they're just terrified of their own company going bankrupt.
@batwood011 Brian Atwood on x
This is grotesque. I bet Dean is a good, smart guy. Yet he is trying to convince you that hosting an LLM in your basement - private and sovereign, as the Founding Fathers would have wished - is dystopian communism. Now why would he do that?
@benjaminnorton Ben Norton on x
This guy who works at the poorly named OpenAI (or more accurately ClosedAI) laments that China's open-source models could lead to: “full AI communism, which is precisely what China proposes: rather than a market product, AI is a ‘public good’ which will ultimately be provided by …
@growing_daniel Daniel on x
Okay, I'll take a hack at Deans argument without his conflict of interest. What China is doing in AI is called dumping. They do it in literally every industry they enter. The goal is to kill all local competition by subsidizing their own industry so they can produce at a loss,
@yacinemtb Kache on x
You know that thing that happens when you can't read a big blob of text because an LLM wrote it and it contains zero entropy? Yeah
@dee_bosa Deirdre Bosa on x
The irony of this: China's strategy is remarkably capitalist... use free models to win distribution and capture the ecosystem. This meanwhile proposes gov't intervention to shield American labs from competition. America is better off competing than manufacturing FUD
NewsMax.com Brian Freeman on x
Trump Weighs Curbs on Chinese AI Models
@davidsacks David Sacks on x
Kimi K3 just fixed 15 critical security bugs that Codex and Fable refused because of “cyber guardrails.” There's no reason to limit American models on tasks that Chinese models handle without issue. We're only making ourselves less competitive.
@sophiacai99 Sophia Cai on x
There was a brief discussion about this recently, but the Commerce Department is *NOT* moving forward on banning Chinese models at this time, per person familiar.
@uswremichael @uswremichael on x
Every industry/ecosystem has its supreme village idiot. @deanwball is that for AI. Congress passed a law in 2026 that restricted some uses of DeepSeek/High Flyer with waivers permitted. Only those models. It went through the democratic process not some Deep State scheme like he
@andrewcurran_ Andrew Curran on x
The Trump administration is considering an executive order, and other means, to ban Chinese open-source models within in the United States. Kimi K3 has reignited this debate. Reporting this morning by Axios. Commerce is also considering adding Chinese AI labs to the Entity List. …
@signulll @signulll on x
state protected capitalism where incumbents privatize the upside while the government socializes their competitive risk by banning cheaper better foreign alternatives. yuck!! this is akin to the american govt giving the trophy to the usa soccer team & calling them world cup
@chamath Chamath Palihapitiya on x
The leading AI has already forked into two options. A: Closed source American that costs $26-56 per 1MM tokens. B: Open weight Chinese that costs $0.50-1 per 1MM tokens. If you force American companies to spend 50-100x more than their competitors abroad here is what will happe…
@mweinbach Max Weinbach on x
If they do this it'll go down as one of the stupidest moves in history You don't restrict it, you loosen restrictions in our models to actually Be useful against those and encourage more and faster innovation for frontier models here
@levie Aaron Levie on x
Depending on which path is taken here, this would be very unfortunate. In the more extreme bans, we would be asymmetrically disadvantaging ourselves. America would reduce the options for AI models in our market, whereas the rest of the world would keep gaining access to both
@emollick Ethan Mollick on x
We need clarity about what sorts of threats the government is worried about. To what extent is this just intended as an industrial policy & to what extent is it based on a real security risk? The investment going into building on top of Chinese open models is huge, stakes are big
@kimmonismus @kimmonismus on x
The Trump administration is showing signs it could ban cutting-edge Chinese AI models Via Axios The Trump administration is reportedly reviving efforts to restrict cutting-edge Chinese AI models such as Kimi through Entity List designations, procurement rules, security [image]
@deredleritt3r Prinz on x
Axios: - The USG is “showing signs it could ban cutting-edge Chinese models” following the release of Kimi K3. - Confusingly, the same article later clarifies that it likely wouldn't be a direct ban, but rather some combination of the following: 1. Procurement rules. The
@corytv Cory Johnson on x
Tweet of the week (already) 👇
@film_girl Christina Warren on x
all this does is ensure that the “unsafe” models are in the hands of the people that only want to do harm. it won't prevent anything except letting people who do good work do good work.
@teortaxestex @teortaxestex on x
Though, that said... Has he ever left? Using Dean to preannounce the measure as “analysis” and “prediction” and take the heat off the labs would be quite smart too. What does OpenAI even need an ex-official for? To imagine “AI futures”? Codex imagine 10 futures, make no mistakes.
@valmianski Ilya Valmianski on x
Reminder, competition is good, actually, and is the basis of our previous economic success. Let's not learn our economics from third world shitholes.
@hackingdave Dave Kennedy on x
The banning of models from China is very reminiscent of the TikTok/Bytedance debacle. Claims of national security risk with zero proof or evidence ever given to its citizens. We live in a capitalist society where we are the largest engine of wealth and intellectual property
@garymarcus Gary Marcus on x
Amid all the competing concerns about AI, including geopolitical tensions, the risks of unemployment, cybercrime, and disinformation, and the complexities of open-source, to say nothing of the risk of runaway AI, it's pretty clear that the highest priority in the Trump
@levie Aaron Levie on x
The reason why you want strong open weights models is because it pushes the entire AI industry forward. The amount of creativity that exists when you have competing approaches for what the future looks like drives the cycle of innovation that we've seen for all participants.
@ccatalini Christian Catalini on x
1/ The strongest argument for banning open-weights models? Written in 1907. Theodore Vail had just retaken AT&T and declared competition a waste: “Universal Service, One system, One policy” was the only way to guarantee a return on capital. [image]
@krishnanrohit Rohit on x
This is the Strait of Hormuz for AI policy
@martin_casado @martin_casado on x
It's a shame we're conflating the Chinese AI situation with Open Source more broadly. The latter is foundational to a healthy industry. The former, is more complicated and the core arguments are largely independent of OS (you can subsidize and dump without OS).
@peterwildeford Peter Wildeford on x
The US has an immense strategic advantage by having way more compute than China. This advantage is key to the AI race. Kimi K3 cannot be run on the laptop. It must be run on the cloud. China lacks compute to both train and run models and this is good for the US.
@chamath Chamath Palihapitiya on x
If you force American companies to spend 50-100x more than their competitors abroad here is what will happen: 1. American companies spending 50-100x will at some point become financially impaired and the stock market will crater. This is the equivalent of the US Government
@signulll @signulll on x
if zuck had stuck to his original plan & managed to release an open weights model at the level of kimi k3, it would've cemented him his legendary status in history... from the guy who invented facebook that has had at least some negative societal implications to the guy who made …
@teortaxestex @teortaxestex on x
I'd actually say that “open source” as a dumping strategy makes little sense The point of dumping is to bankrupt the competition, yes, but you're still selling Chinese OS, in theory, just shifts the revenue from US labs to US neoclouds. That's... not a big blow to the US
@adamthierer Adam Thierer on x
It's another good day to remind the world that banning open source models isn't just about economics and competition, but also about free speech and the free flow of information.
@bgurley Bill Gurley on x
KeyPoint! Making a move like this wouldn't just hurt US AI competitiveness, it would negatively impact every US company in every industry - because they would be forced to pay prices for AI that are drastically above market. It would hurt US competitiveness in every field!
@deliprao @deliprao on x
Banning BYD vehicles led American consumers to drive to Canada to purchase them. Banning ‘Chinese AI’ models will lead to VPN user growth. Markets hate inefficiencies.
@ralph_grabowski Ralph Grabowski on x
Not clear to me how open-source models can be banned. I see why US gov't wants to protect US AI firms but the firms and their VC enablers are drunk on overspending, obsessed with distant gleam of $1-trillion valuations. Gotta laff at those saying this gives advantage to Europe🤣. …
@jun_song Jun Song on x
It has began. Just exactly like what I've been posting
@phl43 Philippe Lemoine on x
I think it's now clear that Dean Ball's post wasn't random but was a public manifestation of a debate that is currently taking place within the Trump administration about how to deal with Chinese open-weights models, pitting advocates of competition who probably have their own
@basedjensen @basedjensen on x
Hell has truly frozen over I am agreeing with charmath bro
@bindureddy Bindu Reddy on x
Wow - woke up to some really bad news The nightmare scenario is coming true - the US may ban open source models Europe and China will dominate the global AI market and kill the US - If this happens
@thezvi Zvi Mowshowitz on x
Posting on Kimi K3 paused for incorporation of breaking news; I had an entire section on @deanwball predicting this and various people creating a clarifying moment by becoming unhinged, but it hits different now that we know this is already under serious consideration.
@scaling01 @scaling01 on x
everyday americans will live in the permanent underclass, while europeans will enjoy cheap chinese open-source models I like this timeline
@perrymetzger Perry E. Metzger on x
If this happens, it will hand the race to the Chinese. Most of the users worldwide will continue using Chinese models, US firms will be unable to benefit from or build on top of those models, and so we'll have the worst of both worlds.
@xw33bttv Lex on x
Trump admin going full retard. I thought America was all about free market/enterprise. Apparently that economic model ends when your competitors start producing better products at cheaper prices. This wont stop China btw lmao
@max_paperclips Shannon Sands on x
Well US open source labs, the field is clear. Now's the time to shine Or is it - wonder if they'll go after US open source models too? Wouldn't want to be “unsafe” after all
@andrewcurran_ Andrew Curran on x
This does explain some of David Sacks's posts yesterday. It was known for a while that open-source regulation was a contentious debate ongoing within the administration, and he would have been strongly against it. https://www.axios.com/...
@natolambert Nathan Lambert on x
The price of fearmongering. Will hurt the US medium term.
@omercheema Omer Cheema on x
Ridiculous. An open-source AI model hosted on secure US infrastructure is secure by definition, as far as open source code is audited properly. Take the example of two travel SaaS platforms: lets say China's https://trip.com/ powers its services with cheap,
@cryptopunk7213 @cryptopunk7213 on x
to be fair, Dean called it. [image]
@danielnewmanuv Daniel Newman on x
Of course the USA isn't going to just let China repackage American innovation and sell it back to its enterprises at a discount. I can't believe people fall for this crap in the first place. 😮‍💨
@rickyho_1989 Ricky Ho on x
This is no longer about national security. It is about economic security. Washington is beginning to recognize that China's AI progress is no longer hypothetical. Models like DeepSeek and now Moonshot's Kimi K3 have demonstrated that frontier AI capability is becoming
@johnennis John Ennis on x
What a disaster If this happens, it will be the dumbest thing that Trump administration has ever done It's honestly hard to think of anything dumber
@ryanfedasiuk Ryan Fedasiuk on x
It sounds like the administration is considering exactly the approach I outlined in April. [image]
@stevehou Steve Hou on x
I mean it's pretty clear that the direction of travel would be to nudge US enterprises away from Chinese open models by soft rules against companies using Chinese models while doing business with the federal govt. It doesn't take much to send a signal. It'll likely be bipartisan.
@deanwball Dean W. Ball on x
@teortaxesTex Senior usg officials attacked me for the take. It is *insane* to suggest my analysis is legitimizing these clearly longstanding conversations
@deanwball Dean W. Ball on x
@teortaxesTex Huh, wow, almost like I called it. easiest prediction in the world to make, but one I wasn't seeing anyone else actually say. I will be much more cautious about making analytic predictions in the future, however.
@teortaxestex @teortaxestex on x
Remember: @deanwball doesn't write USG policy anymore, but he has a fairly good idea of how it can develop. It doesn't much matter if he approves. Dunking on Dean in his OpenAI employee capacity is fun. Is this fun too? Well, *I* am having a lot of fun. [image]
@jukan05 Jukan on x
Damn, this is exactly what @deanwball said, isn't it? [image]
@jukan05 Jukan on x
U.S. EYES TOUGHER CURBS ON CHINESE AI THE TRUMP ADMINISTRATION IS REPORTEDLY CONSIDERING STRICTER RULES ON CHINESE AI MODELS AFTER THE LAUNCH OF MOONSHOT AI'S KIMI K3. OPTIONS INCLUDE REQUIRING U.S. HOSTING PROVIDERS TO GUARANTEE THE SECURITY OF CHINESE MODELS AND ACCEPT
@huaijiangzhu @huaijiangzhu on x
my spicy theory is that chinese ai labs keep winning because of culture, not talent or resources. chinese labs still have a deeply hands-on engineering culture deepseek and kimi are flat organizations where science and engineering are fused...but sf tech bros have decided that “…
@alexstamos Alex Stamos on x
How hard is this to type, David? “The Trump Administration was wrong to ban Fable and I was wrong to support the ban.” Try it, I bet you will still get ringside UFC tickets.
@leothecurious @leothecurious on x
lots of “open vs closed strategy” discourse on the tl since the banger ~frontier open weights drop from kimi k3. unfortunately, much of those takes seem to be taking sides at the expense of nuance. both are right but it's not that simple. here's my 2 cents:
Charles H. Martin, PhD Charles H. Martin, PhD on linkedin
News today is that Trump may impose a ban on Chineese AI models. Once again, the AI tech bros can not see the writing on the wall. …
@timkellogg.me Mr. Tim on bluesky
which, this will make it harder for Trump to execute a plan like this bsky.app/profile/timk... [embedded post]
r/LocalLLaMA r on reddit
US gov't lobbied by major US labs is about to ban open source models.
r/singularity r on reddit
The secret Trump administration battle to fight Chinese AI
r/OpenAI r on reddit
The Trump administration considers banning Chinese open-source AI models, sparked by Kimi K3 -Axios
r/neoliberal r on reddit
The secret Trump administration battle to fight Chinese AI
@nic_carter Nic Carter on x
havent seen one person from OAI or Ant address Jon's argument here. the point is simple: the USG does not owe either of the large labs a business model. if the economics of selling tokens don't work due to distillation/cheap clones/Chinese AI magick, the American enterprise and
@jon_stokes Jon Stokes on x
Look I think I've figured this whole thing out. Follow along as I try to steelman, and tell me where I'm wrong. OpenAI guys on the TL believe that if they can't sell metered inference tokens at a sufficient markup, then they will not have enough of a business to fund the next

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