China has an AI plan: California must lead America’s response

OPINION – There is a quiet but seismic shift underway right now in the global artificial intelligence (AI) race. California, as America’s innovation powerhouse, cannot afford to ignore it.

In December 2024, the American Edge Project sounded the alarm: China is executing a $1.4 trillion strategy to dominate global technology by 2030—and it’s using open-source AI as its Trojan horse. By flooding the world with “free” AI models embedded with Chinese Communist Party (CCP)-aligned values, Beijing is working to hardwire authoritarian control into the world’s digital foundation, undermining U.S. leadership, security, prosperity, and democratic values from the inside out.

Every week, the massive scope of China’s AI strategy comes into sharper focus. In recent weeks, Beijing has doubled its AI investment plans by an additional $1.4 trillion, Alibaba has released over 100 open-source models in 29 languages, other China tech giants have pivoted to open-source releases, and Chinese cloud providers are slashing prices to flood international markets and secure market share.

This isn’t a temporary trend, but a coordinated national push to dominate the future of AI and to set world standards. By flooding the world with permissively licensed AI tools, Chinese companies are replicating the same playbook used in a 5G, where Huawei overwhelmed global markets before democratic nations could coordinate a response.

Many Chinese models are licensed under the MIT license—one of the most permissive open-source frameworks available—allowing them to be freely used, modified, and redistributed commercially by anyone, anywhere. This gives China a powerful advantage: while California’s companies navigate complex regulatory frameworks, China uses open-source AI to sidestep restrictions and advance its tech agenda beyond Western oversight.

As the Center for New American Security noted, “A world of unchecked, Beijing-built AI ecosystems would be a major blow to the U.S. and to humanity writ large. If Chinese AI goes global, so too will brazen non-compliance with international agreements on the technology.”

To secure a future defined by American leadership, prosperity, and democratic values, California policymakers must prioritize innovation acceleration.

First, California must champion both open-source and closed-source AI development. Our state is home to not only the world’s top closed models, but also to Meta—the largest open-source AI company in the United States. This gives California a unique responsibility and opportunity to lead in shaping the future of multiple AI models. Sacramento should double down on this advantage by incentivizing our universities, startups, and tech leaders to develop high-performing open-source alternatives to Chinese models, ones that that reflect democratic values and strengthen U.S. competitiveness.

Second, we must foster a more supportive innovation environment. But with 41 pending bills in Sacramento relating to increased AI regulation, policymakers must carefully avoid embracing a European-style regulatory regime that has crippled its AI sector.

Third, we need a whole-of-nation approach to AI infrastructure. China has already built 30,000 miles of ultra-high voltage power lines to scale its AI capabilities. The U.S. has none. We must modernize our energy grid, expand STEM education, secure semiconductor supply chains, and make smart investments in computing power and data infrastructure.

Fourth, California should leverage its global tech diplomacy. As home to the world’s most influential tech companies, California has unique soft power to forge global coalitions that counter China’s Digital Silk Road. By passing industry standards that foster innovation, California could ensure democratic values shape AI’s future worldwide.

Some experts call this AI’s “Android moment” — a tipping point where open-source platforms reshape global adoption. But unlike Android, which was built in California and helped democratize mobile tech, today’s most rapidly spreading AI tools are coming from China’s closed and censored systems.

California still has the edge in talent, venture capital, and innovation ecosystems. But unless we act quickly and boldly, we risk losing that edge to China’s state-backed AI offensive.

China has a plan. California must lead America’s response.

Doug Kelly is CEO of the American Edge Project, an advocacy group focused on protecting and promoting American leadership in innovation.