A flood of high-powered, cheap-to-use Chinese AI models are quickly amassing customers across the US – and experts are sounding alarms that America’s lead in artificial intelligence could be in danger.

One such new open-source model, dubbed GLM-5.2, was released by China’s z.AI on June 16 and specializes in coding projects. The company claims that GLM-5.2 is about as advanced as some of the best models offered by Anthropic, OpenAI and Google.

“Genuinely impressed, almost shocked, at how good GLM 5.2 by @zai_org is at coding,” Guillermo Rauch, the CEO of US-based AI firm Vercel, wrote on X. “This changes things.”

Mat Velloso, an AI executive who formerly held senior roles at Meta and Google DeepMind, wrote that he had spent “all day” using GLM-5.2.

“First open model that passes the bar as a daily driver,” Velloso wrote on X. “Things are not going to be the same.”

The Trump administration has been increasingly wary about China’s breakneck pace in AI development – with officials warning as recently as recently as April that China was engaged in “industrial-scale” efforts to rip off AI technology.

OpenAI and Anthropic have accused Chinese firms of using a technique called “distillation” to extract data from American models.

Chinese AI is gaining a foothold in the US market. Of the 10 models included on AI marketplace OpenRouter’s most popular rankings, six were developed by Chinese tech firms, including DeepSeek, Tencent, Xiaomi and MiniMax.

Z.AI’s leadership has begun to burnish its public profile. When SpaceX CEO Elon Musk predicted last week that a Chinese firm would catch up to Anthropic’s frontier models in “probably Q1” of next year, z.AI founder Jie Tang replied that it “won’t take that long.”

Unlike subscription-based US models, many of the leading Chinese models are open-source — meaning they are readily available to the public and much cheaper to use for major projects. In fact, the cost of AI tokens, a measure of usage, has become so high for top AI models that leading firms like Meta, Uber and Walmart have imposed or plan to impose limits on how much employees can use them.

Cursor, an AI coding firm recently acquired by Musk’s SpaceX, admitted in March that its “Composer 2” model was built using an open-source model released by China-based Moonshot AI, whose backers including Alibaba.

Elsewhere, Microsoft drew criticism earlier this month after Axios reported that it was considering making a version of China’s DeepSeek available on the company’s new “Copilot Cowork” tool, which allows users to select from an array of AI models to complete long-term projects.

The report drew a fiery response from Sen. Rick Scott (R-Fla.), a China hawk, who said “Communist China wants to destroy our way of life.”

“American companies have no business selling out our national security by partnering with CCP tech companies like this,” Scott wrote in a June 16 post on X.

The plan is part of Microsoft CEO Satya Nadella’s strategy to offer access a variety of more affordable AI models, not just the expensive leading models offered by American AI giants, according to an interview he gave to the Wall Street Journal.

In the interview, Nadella rebuked tech CEOs over how they’ve discussed AI’s potential to shake up the US economy. though he didn’t mention any by name. Anthropic CEO Dario Amodei, for example, has warned that AI could cause national unemployment to hit 25% over time – with white-collar jobs hit particularly hard.

“You can’t say, hey, all white-collar jobs are gone and this could even be a weapon and we will use all the power to build data centers,” Nadella told the WSJ.