# Trump’s AI advisor says Kimi K3 shows “how you lose the AI race.” Khosla blames immigration. Marcus wants a congressional investigation. > Source: > Published: 2026-07-17 16:52:48+00:00 #### TL;DR *Kimi K3 topped Arena’s coding leaderboard in 24 hours. Trump advisor Sacks warned the US is losing. Khosla blamed immigration. A Wall Street CIO called it bad news for closed AI labs.* Moonshot's open model topped coding leaderboards within 24 hours. Wall Street called it an "inflection point" that is bad for OpenAI and Anthropic but good for everyone else. *Kimi K3 topped Arena’s coding leaderboard in 24 hours. Trump advisor Sacks warned the US is losing. Khosla blamed immigration. A Wall Street CIO called it bad news for closed AI labs.* Moonshot AI’s Kimi K3 topped Arena’s frontend coding leaderboard within 24 hours of launch, ahead of Anthropic’s Claude Fable 5 and OpenAI’s GPT-5.6 Sol. It placed third on Artificial Analysis’s Intelligence Index. [The reaction from Washington, Wall Street, and academia](https://www.businessinsider.com/smart-people-saying-chinas-hot-new-kimi-k3-ai-model-2026-7) was swift and pointed. [TNW covered the model’s capabilities at launch](https://thenextweb.com/news/moonshot-kimi-k3-largest-open-model), but the political and economic fallout is a story of its own. David Sacks, Trump’s former AI czar and current cochair of the President’s Council of Advisors on Science and Technology, called the release “*concerning*” and said it was the first time a Chinese model had taken the top coding spot. He blamed US regulatory self-harm: blocking data centres, layering on state regulations, and pushing for federal pre-approval of frontier models. “*This is how you lose the AI race,*” Sacks wrote. “Permissionless innovation is how America won the internet.” Vinod Khosla agreed and added that US immigration policy is “*scaring away brilliant talent.*” Gary Marcus, the longtime AI industry critic, took a different view. “*Congress should investigate. Seriously,*” he wrote, pointing to a Goldman Sachs chart showing US cloud capex reaching roughly $1 trillion in 2027, about eight times China’s projected spending. The implication: if Chinese labs can match or approach US performance at a fraction of the cost, the trillion-dollar buildout may be harder to justify. Gavin Baker, CIO at Atreides Management, called K3 an “*inflection point*” and said it is bad news for closed AI startups like OpenAI and Anthropic but a net positive for everyone else. “*Anything that lowers margins and increases competition at the model layer is good for every other AI layer: power, semiconductors, hyperscalers, neoclouds and yes even software,*” Baker wrote. [DeepSeek already made its 75% price cut permanent](https://thenextweb.com/news/deepseek-v4-pro-75-percent-price-cut-permanent), and K3’s open-weight release at frontier-level coding performance accelerates the same dynamic: the model layer commoditises while the infrastructure and application layers capture the value. Get the most important tech news in your inbox each week.