The Limits of AI as an Economic Weapon

Max Bessler argues that the rise of capable, free open-weight models from Chinese firms such as Moonshot, Alibaba, Zhipu and DeepSeek is splitting the AI market into a commoditized tier and a smaller premium tier, undermining Washington's ability to use AI models as a coercive chokepoint. He compares this to Japan's 1980s DRAM dominance, which captured volume but yielded little leverage, and suggests the U.S. should instead keep chip export controls narrow and maintain control of the cloud and inference layer where models run.