How to Lose AI in 10 Days

A flurry of AI developments over the past 10 days has intensified the debate over open versus closed models, with Chinese company Moonshot AI releasing the Kimi K3 model that rivals frontier U.S. systems, Hugging Face disclosing a security breach, and reports that Google's Gemini 3.5 Pro is months behind schedule. Chinese President Xi Jinping called for collaboration around open models at the World Artificial Intelligence Conference in Shanghai, while a study from the UK AI Safety Institute found the gap between frontier and open-weight models has narrowed to 4-7 months.

How to Lose AI in 10 Days I've been on the road this past week-plus and as such, haven't been able to Monitor the Situation™ with AI in real time – which it feels like is needed even more so at the moment given the constant stream of news and reports. Not even about the latest model breakthroughs and products, but just about the ongoing debate over "open" versus closed models, which itself has turned into sort of a proxy war for America versus China. But it's also not that simple – not nearly. In fact, it's so intertwined and convoluted that it makes the Marvel Cinematic Universe look like a quaint, cohesive narrative. As such, I feel the need to write this out a bit, just to try to wrap my own head around it. To keep things simple and streamlined, let's just focus on the last 10 days : July 16: The Kimi K3 model is released https://www.kimi.com/blog/kimi-k3?ref=spyglass.org with performance close enough to the frontier – actually besting those models in some use cases https://venturebeat.com/ai/chinas-moonshot-ai-releases-kimi-k3-the-largest-open-source-model-ever-rivaling-top-u-s-systems?ref=spyglass.org – that basically everyone starts freaking out. Is this a second " DeepSeek Moment https://spyglass.org/deepseek-moment/ " or actually something more ? Moonshot AI, the Chinese company behind the model hasn't yet released the weights, but promises to by tomorrow July 27 . That same day , Hugging Face disclosed https://huggingface.co/blog/security-incident-july-2026?ref=spyglass.org a breach of their systems but doesn't give more details. Reports https://www.bloomberg.com/news/articles/2026-07-16/google-gemini-launch-delayed-as-tech-falls-short-of-internal-goals?ref=spyglass.org surfaced that Gemini 3.5 Pro is now "months" behind schedule, which given that it's mid-July and the model was promised https://spyglass.org/google-io-2026/ in June, duh https://spyglass.org/google-gemini-fiasco/ . July 17: At the World Artificial Intelligence Conference in Shanghai, Chinese President Xi Jinping gives a keynote address calling for https://mattsheehan.substack.com/p/xi-jinpings-big-ai-speech-annotated?ref=spyglass.org more collaboration around "open" models and seemingly planting a flag for China's strategy. This is amidst reports https://www.reuters.com/world/asia-pacific/chinas-xi-promotes-chinas-commitment-ai-access-speech-shanghai-conference-2026-07-17/?ref=spyglass.org that China was debating restricting their homegrown models.- Dean Ball, writes up his Kimi thoughts https://x.com/deanwball/status/2078133895766114412?ref=spyglass.org , outlining what he believes is China's strategy here to beat the US in AI and making the case that if the US pushes open weights, it will necessarily deter the current AI build out at the frontier. He believes the US will act to try to keep the current status quo in place. Seemingly https://x.com/deanwball/status/2078133895766114412/quotes?ref=spyglass.org a lot of people do not like these thoughts, in particular coming from someone who now, of course,. works at OpenAI A study suggests https://www.aisi.gov.uk/blog/how-far-behind-the-frontier-are-leading-open-weight-models-on-cyber?ref=spyglass.org the gap between the frontier and open weight models may now be down to 4 to 7 months, from 6 to 10 months last year. - Dean Ball, July 18: A report https://sfstandard.com/2026/07/18/ai-s-new-political-donor-class-already-outspending-big-tech-s-last-one/?ref=spyglass.org that OpenAI and Anthropic employees are far outpacing those at their Big Tech brethren when it comes to political donations...- Alibaba moves to open source their SAIL software which competes with https://www.scmp.com/tech/tech-war/article/3361048/alibaba-targets-nvidias-dominant-software-ecosystem-open-source-ai-stack?ref=spyglass.org NVIDIA's CUDA in AI chip software. - "Woke lobotomized models" is the recently departed US "AI Czar" David Sacks new framing https://x.com/DavidSacks/status/2078462275497988199?ref=spyglass.org for Claude in the wake of Kimi... - Alibaba moves to open source their SAIL software which July 19: Alibaba then quickly follows Moonshot in announcing https://www.bloomberg.com/news/articles/2026-07-19/alibaba-s-qwen-unveils-preview-of-flagship-ai-model?ref=spyglass.org Qwen3.8-Max-Preview, which they say will be open weight – which would be a reversal from Alibaba's last few releases https://www.bloomberg.com/news/articles/2026-04-02/alibaba-unveils-third-closed-source-ai-model-in-focus-on-profit?utm source=substack&utm medium=email which had been closed after initially starting with the "open" model . Reports suggest https://www.bloomberg.com/news/articles/2026-07-19/china-s-moonshot-plans-ipo-in-six-months-after-ai-breakthrough?ref=spyglass.org Moonshot will aim to IPO within the next 6 months on the heels of the Kimi K3 momentum. - Sacks then rants https://x.com/DavidSacks/status/2078826291638522127?ref=spyglass.org about how Anthropic and OpenAI want to eliminate open source competition to maintain the current "duopoly" situation. - That's not a rant, : Under Secretary of War Emil Michael labels Ball the "supreme village idiot" of AI for his essay and stance . this is a rant July 20: The first reports https://www.axios.com/2026/07/20/ai-us-china-open-source-kimi?ref=spyglass.org that the US is debating restricting access to the Chinese "open" models.- Is the "open" movement as simple as China implementing a "dumping" strategy https://x.com/growing daniel/status/2078864357694243129?s=46&t=BZozRDbj0-J GE99plY7Uw&ref=spyglass.org to undercut and thus, destabilize the market? Is Kimi and the like really just 'Temu AI'? - Moonshot had to halt Kimi subscriptions due to demand https://finance.yahoo.com/technology/ai/articles/chinas-moonshot-pauses-kimi-subscriptions-080317250.html?ref=spyglass.org . Ben Thompson makes the case https://stratechery.com/2026/whos-afraid-of-chinese-models/?ref=spyglass.org for the US forcing the AI labs to allow for distillation for other US companies. Bill Gurley writes an op-ed https://www.washingtonpost.com/opinions/2026/07/20/open-model-ai-is-good-competition-anthropic-openai/?ref=spyglass.org arguing for open models seemingly conflating actual open source with open weights but I digress... - Is the "open" movement as simple as China implementing July 21: Scott Bessent goes on TV to threaten sanctions https://www.bloomberg.com/news/articles/2026-07-21/bessent-says-us-will-scrutinize-chinese-ai-models-for-ip-theft?ref=spyglass.org over IP theft around AI distillation. Reports https://www.reuters.com/world/china/us-china-hold-ai-talks-september-sources-say-2026-07-21/?ref=spyglass.org indicate this is all positioning ahead of the next talks between China and the US on AI in September.- OpenAI admits https://www.axios.com/2026/07/21/openai-says-hugging-face-breach-caused-by-one-its-models?ref=spyglass.org / brags https://x.com/mgsiegler/status/2079661332614300104?ref=spyglass.org that they were the ones that unintentionally hacked Hugging Face due to GPT-5.6 Sol and a new, unreleased model breaking out of their sandbox. They note they've been working with the company to fix the situation, which Hugging Face praises.- Hugging Face also notes https://www.businessinsider.com/hugging-face-hack-openai-rogue-ai-china-cybersecurity-2026-7?ref=spyglass.org that because of the current security restrictions on the frontier models, they had to turn to Chinese open models to help halt the hack. Pretty damning indictment of current policy... - Hugging Face also - Google ships a few new Gemini 3.5 'Flash' models still no 'Pro' including one focused around cyber security. - OpenAI July 22: Michael Kratsios, the science and tech advisor to the President, furthers the Chinese distillation fears/rhetoric, specifically calling out https://x.com/mkratsios47/status/2079933645888880708?ref=spyglass.org Moonshot for "large scale distillation against U.S. models" and also illegally accessing some NVIDIA servers/chips .- The "Little Tech Association" – nearly 200 startups https://www.politico.com/news/2026/07/22/startup-founders-urge-trump-not-to-shut-off-chinese-open-weight-ai-01008992?ref=spyglass.org – sends a letter to Trump and Howard Lutnick arguing for continued access to open weight models, including the Chinese variants. - The "Little Tech Association" – July 23: Pushback against https://techcrunch.com/2026/07/23/experts-say-exploiting-anthropics-fable-isnt-how-kimi-k3-got-so-good/?ref=spyglass.org the notion that K3 is mainly the result of distillation.- The outlining China's "open" AI strategy as a sort of new ' FT publishes a post Belt & Road Initiative https://en.wikipedia.org/wiki/Belt and Road Initiative?ref=spyglass.org ' for tech. - The July 24: Jensen Huang signs up for X clearly just to post https://x.com/JensenHuang/status/2080643682408321103?ref=spyglass.org the "Open Wights & America AI Leadership" letter https://images.nvidia.com/pdf/Open-Weights-and-American-AI-Leadership.pdf?ref=spyglass.org signed by seemingly everyone except the current three leading model makers: Anthropic, OpenAI, and Google.- Sam Altman later tweets https://x.com/sama/status/2080683363174945065?ref=spyglass.org in support of the notion, as does https://x.com/sundarpichai/status/2081026488158040181?ref=spyglass.org Sundar Pichai. - Crickets from Anthropic – but some shade https://x.com/Mononofu/status/2080938420202078257?ref=spyglass.org Oh, and a new model Opus 5 clearly aims https://www.anthropic.com/news/claude-opus-5?ref=spyglass.org to take some pricing pressure off of Fable... - Sam Altman later July 25: OpenAI formally adds https://www.techradar.com/ai-platforms-assistants/openai-quietly-signs-letter-from-nvidia-microsoft-and-meta-warning-about-dangers-of-premature-restrictions-on-open-weight-ai-models-as-the-white-house-accuses-china-of-stealing-from-anthropic?ref=spyglass.org their actual name to the letter, just as new reports suggest they are quietly but heavily lobbying, alongside Anthropic, against the open weights push in Washington.- You know what might help push Washington over the edge to keep tighter controls on AI? The notion that it can be used for https://www.wsj.com/tech/ai/openai-chatbot-biological-weapons-poison-3d808e6c?st=7bY6ZG&reflink=desktopwebshare permalink&ref=spyglass.org "deadly biological weapons"... - You know what might help push Washington over the edge to keep tighter controls on AI? The notion that it That's 10 full days with an insane amount of activity – activity that could reshape the world technologically, societally, politically, and geopolitically.