Science and Technology

Welcome back to Foreign Policy’s Situation Report, where our team has spent the last week taking turns falling sick. But don’t worry, we rallied so that we could bring you this week’s edition.

All right, here’s what’s on tap for the day: A Chinese AI conundrum in Washington, another potential Hormuz reopening, and the cost of Trump’s new battleships.

Welcome back to Foreign Policy’s Situation Report, where our team has spent the last week taking turns falling sick. But don’t worry, we rallied so that we could bring you this week’s edition.

All right, here’s what’s on tap for the day: A Chinese AI conundrum in Washington, another potential Hormuz reopening, and the cost of Trump’s new battleships.

No, we’re not talking about the latest U.S. attempt to reach a deal with Iran (though there’s more on that below). Instead, we’re talking about Washington’s latest freakout over China’s artificial intelligence capabilities.

Many people (us included) have spent years asking the question of which of the world’s two biggest economies is winning the AI race. The latest round of soul-searching has been sparked by a model named Kimi that was created by Chinese company Moonshot AI. The chatbot’s latest version, which released in July, showed capabilities that potentially rival the top U.S. models.

The prevailing wisdom indicates a U.S. lead at the cutting edge through Silicon Valley giants such as OpenAI and Anthropic. But China’s bigger innovation may be in how Kimi, DeepSeek, and its other models are taking over the market. Most top Chinese models are open-weight, meaning that anyone can download their building blocks of data and code to create bespoke versions of the model at a much lower cost. As Rishi wrote soon after Kimi’s new model launched, it’s a form of Chinese AI-maxxing that gives countries around the world an easier entry point into an AI ecosystem than the far more expensive (and increasingly unreliable) tech stack that Washington is exporting.

The choices that countries in Africa are making, for example, are particularly instructive. According to a new report in the New York Times, developers across Kenya, Uganda, Ghana, and Nigeria are increasingly opting for Chinese AI models over U.S. ones to build everything from business and legal tools to education applications.

Even U.S. startups are largely hooked on Chinese open-weight models, which resulted in a rather quick end to the Trump administration’s debate over whether they should be........

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