Top Western firms switching to Chinese AI – WSJ

The US is losing its dominance in the global artificial intelligence race, according to the newspaper.

A growing number of top Western companies are adopting Chinese artificial intelligence models, challenging US dominance and potential profits in the global AI industry, the Wall Street Journal has reported.

Major firms such as HSBC, Standard Chartered, and Saudi Aramco have begun deploying or testing Chinese AI systems, including models developed by DeepSeek and Alibaba, according to a WSJ report published on Wednesday. Even US-based cloud providers such as Amazon Web Services, Microsoft, and Google are offering DeepSeek to clients, despite alleged security concerns flagged by the White House.

The surge in global interest comes as Chinese AI companies offer performance on par with leading US models at a fraction of the cost. According to data from research firm Sensor Tower, DeepSeek has already recorded 125 million global downloads, compared to ChatGPT’s 910 million.

China’s AI developers are further gaining traction by open-sourcing their models, encouraging widespread customization and adoption.

In South Africa, the University of the Witwatersrand chose DeepSeek for a pilot research project due to its offline capability and open-source flexibility. Similarly, Japan’s Ministry of Economy selected Alibaba’s Qwen model over US alternatives. On platforms such as Latenode, a fifth of global users reportedly now prefer DeepSeek for building AI tools.

Industry experts say the trend could erode US influence in setting global AI standards. Microsoft President Brad Smith warned during a recent US Senate hearing that “the No. 1 factor that will define whether the US or China wins this race is whose technology is most broadly adopted in the rest of the world.”

Although the open-source versions of Chinese models are unrestricted, critics argue that consumer-facing apps often reflect Chinese government policies – and with wider adoption, could allow Beijing to embed its digital standards globally. The shifting landscape has raised concerns in Washington, with lawmakers considering legislation to block federal agencies from using Chinese-developed AI.

Meanwhile, OpenAI CEO Sam Altman has warned of strategic moves by other Chinese rivals like Zhipu AI to dominate emerging markets. “We want to make sure democratic AI wins over authoritarian AI,” claimed Altman, whose company recently signed a $200 million deal with the Pentagon.

With the AI competition increasingly seen as a new technological arms race, US firms are ramping up efforts to maintain the lead. Meta recently launched a new division focused on developing superintelligent AI, and President Donald Trump has backed a $500 billion federal initiative to secure American leadership in advanced AI technologies.