American investors are confronting an uncomfortable reality in artificial intelligence: the most powerful open models in the world are no longer being built in the United States, but in China. Over the past year, a growing chorus of technologists and financiers has warned that the U.S. is quietly surrendering the open-weight AI market to Chinese labs like DeepSeek, Moonshot AI and Z.ai.

By one widely watched measure, the concern is no longer theoretical. The top six best open models are all developed by Chinese firms, according to independent AI benchmarking outfit Artificial Analysis’ AI leaderboard. They’ve been steadily gaining traction: Chinese open models’ weekly usage as a share of total AI usage was 1.2% in late 2024 but surged to nearly 30% in December, according to a report published by OpenRouter and the venture capital firm Andreessen Horowitz.

"Roughly 20% of AI startups use open source models, and of those companies, I would say roughly 80% are using Chinese open models,” Andreessen Horowitz general partner Martin Casado told Forbes.

San Francisco-based Arcee AI thinks it can buck that trend. The company, a foundation model lab........

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