Proponents of competition fear the consequences.
- US companies are increasingly turning to open source models from China because they are cheaper and, as the emergence of Kimi shows, almost as good as domestic technology.
Behind the scenes: The Commerce Department last year considered adding several Chinese AI labs to its “entity list,” which would effectively block U.S. access without a license, a source close to the administration told Axios.
- The National Security Agency and the White House Office of the National Cyber Director last year also considered issuing an advisory on threats from Chinese AI labs, effectively stopping U.S. companies from using their technology, the source said.
- The White House is considering implementing an executive order that would allow U.S. companies to host Chinese models only if they guarantee safety and could face liability in the event of a violation, the source added.
- Commerce also circulated draft rules within the government last summer to use its authorities to secure domestic supply chains to target Chinese open-source models, another source close to the government said.
Administrators are interested Efforts to prevent regulation from stifling innovation have undermined all of these efforts.
- Key voices like former White House adviser Sriram Krishnan have now left the site and national security advocates have become louder.
- With this change in personnel—along with the rise of more powerful Chinese technology and new fears about cybersecurity—ban momentum is picking up again.
For the record: Neither the White House nor the Commerce Department responded to requests for comment.
The big picture: The government wouldn’t have to impose an outright ban to get U.S. companies to abandon these Chinese platforms.
- “What is actually happening is slower and more sustained,” said a source familiar with government discussions, pointing to procurement rules, entity list threats and public pressure campaigns targeting U.S. companies that use Chinese models.
- Instead of a ban, another source familiar with government discussions described a push to highlight possible backdoors and lack of security in Chinese models, as well as related governance issues.
- It is an aggressive approach in which the government promotes a more innovative US open source ecosystem, the source added.
Yes but: Powerful US alternatives are limited at best compared to cheaper and more practical Chinese models.
What they say: David Sacks, an outside AI adviser to the White House, wrote on X on Sunday: “We are at a critical turning point in AI policy. The leading closed labs, already a duopoly in terms of revenue from AI models, want the government to eliminate their open source competition.”
- Sacks has long warned against regulatory capture that would benefit the largest U.S. laboratories and stifle competition.
- While not outright bans, the approaches being considered would have a chilling effect on Chinese open-source technology and U.S. companies that rely on it, the source close to the administration said.
- The source described that leading AI labs or their allies approach the government every three to five months with the idea of banning open source models.
What you should see: Chinese President Xi Jinping feels encouraged by the AI competition. The pressure on the US industry, open source or not, to respond is increasing.
The conclusion: Anthropic and OpenAI have long been vocal advocates of security regulations, which in some cases include licensing. These advances have been more abstract – until now.
- “They put their cards on the table,” Sacks wrote. “It’s time for the rest of Silicon Valley – the vast majority that still values open competition – to do the same.”
https://www.axios.com/2026/07/20/ai-us-china-open-source-kimi
