Commentary: Anthropic’s retreat is a win for Chinese open-source AI

THE BEGINNING OF A PRICE WAR

The timing, meanwhile, couldn’t be worse. This is all happening in the midst of a brutal debate over AI cost and the beginning of a price war. As astronomical AI spending bills are starting to come due, more business leaders are being forced to reckon with whether the top models are worth it. One of the biggest draws of China’s AI offerings is that they are just a fraction of the top models from Anthropic and OpenAI.

More people seem to be switching over: DeepSeek, which last month said that it was making permanent a 75 per cent discount on its latest model, remains at the top of OpenRouter’s ranking of large language models by token usage (the units of data processed by an AI tool).

US AI still tops the elite benchmarks, but most companies don’t need systems that can reason through quantum physics to automate routine desk work. Good-enough and cheaper AI was already a major selling point for Chinese labs, and now they can add that they’re also looking more reliable.

Some outlets have reported that the Mythos and Fable crackdown was in part spurred by fears that it could be accessed by China (though Anthropic and former White House AI czar David Sacks have only said that it was due to potential jailbreak risks). Yet if Washington’s goal was to protect America’s AI lead with this move, it has backfired. 

The whole thing is incredibly awkward for Anthropic, a company that has long cast itself as the safety-focused AI lab that welcomes more regulation. Now that it is caught in the middle of a chaotic regulatory intervention, supposedly over risks, it’s insisting that its guardrails are enough. But this is about far more than Anthropic.  

Ultimately, Chinese AI labs are right to welcome this move, but framing this as an easy win for Beijing misses the larger failure. The rest of the world should be more worried than amused. The US-China competition lens has flattened all serious debates about AI safety.

The result is that the technology keeps moving faster than anyone’s ability to govern it. In that race, the loser may not be Washington or Beijing but everyone else.