The strategy for China is obvious: commoditize your complements. Note that Xi explicitly ties openness to AI “moving from the digital world into the physical world”; the physical world is the world dominated by China, and the country’s lead in areas like robotics is going to massively benefit from widely available AI models.

Along the same lines, China does not want the U.S. to gain an asymmetric advantage in AI; to the extent that China can weaken the U.S. frontier labs while strengthening any and all potential U.S. adversaries so much the better, and it can benefit from the innovation that will attach itself to an open ecosystem.

And in sum:

The better course is clear: first, loosen Fable and Sol restrictions on cybersecurity, and second, ensure that U.S. open weight model makers are on an equal playing field with China. Yes, the frontier labs will kick and scream about this, but the Administration should realize that listening to their histrionics has led the U.S. to a position where U.S. companies are dependent on China for their defenses. Let the frontier labs win by being better; don’t let them define safety or security, or pull up the ladder of humanity’s collective knowledge. China is already hard enough to compete with; letting them carry the standard for openness and innovation is simply giving away our biggest advantage.

That is from Ben Thompson’s Stratechery (gated, but ungated link here).