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MIT-backed Open AI Models with Federal Funding: How the U.S. Government is Investing $10B to Challenge Big Tech’s Dominance

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The U.S. AI Action Plan: A Shift in Focus

Recently, President Trump unveiled the U.S. AI Action Plan, which surprised many by prioritizing the encouragement of open-source and open-weight AI. This shift elevates what was once a technical subject to a pressing national issue, positioning it as a critical strategy in the race against China in the AI sector. China’s own Action Plan, released shortly after the U.S. Announcement, emphasizes open-source initiatives, making the competition in this area increasingly vital. The global influence associated with more open models from China highlights their leadership in this domain.

The Rise of Open-Source AI

The release of DeepSeek-R1, a powerful open-source large language model (LLM) from China, earlier this year lacked the usual fanfare—no press tours, no flashy demonstrations, and no keynote speeches. Instead, it offered open weights and open science, allowing anyone with the necessary skills and resources to run, replicate, or adapt the model. This openness led to a swift response from researchers and developers, resulting in DeepSeek becoming the most-liked model on Hugging Face within days, spawning thousands of variants utilized by major tech companies, research labs, and startups. Notably, this surge of adoption was not limited to international users; American developers began building on these Chinese foundations.

The Impact on the U.S. Market

In just a week, the U.S. Stock market reacted negatively to this development. DeepSeek was merely the beginning; numerous Chinese research groups are now advancing the boundaries of open-source AI, sharing not only powerful models but also the accompanying data, code, and scientific methodologies. They are progressing rapidly and transparently. In contrast, many U.S.-based companies, once pioneers of the modern AI revolution, are increasingly restricting access to their flagship models like GPT-4, Claude, and Gemini. These models are now primarily accessible through chatbots or APIs, which allow interaction but do not provide insight into their inner workings, retraining capabilities, or free usage. The proprietary nature of these models is tightly controlled by a handful of tech giants.

A Dramatic Shift in Leadership

This marks a significant turnaround; between 2016 and 2020, the U.S. Was the global leader in open-source AI. Research labs from Google, OpenAI, Stanford, and others released groundbreaking models and methods that laid the groundwork for contemporary AI. The transformer architecture, essential to ChatGPT, emerged from this open environment. Hugging Face was established during this time to democratize access to these technologies. Now, the U.S. Is losing its edge, with serious implications. American scientists, startups, and institutions are increasingly compelled to rely on Chinese open models because the best U.S. Alternatives are locked behind APIs. As new open models are developed abroad, companies like DeepSeek and Alibaba solidify their roles as foundational components of the global AI ecosystem.

The Risks of Proprietary Models

Furthermore, there is a deeper concern: every advancement in AI, including the most proprietary systems, is built upon open foundations. Proprietary models rely on open research, from transformer architecture to training libraries and evaluation frameworks. More critically, open-source fosters a nation’s ability to innovate rapidly. It promotes swift experimentation, lowers entry barriers, and generates cumulative innovation. When openness declines, the entire ecosystem suffers. If the U.S. Lags in open-source initiatives today, it risks falling behind in AI as a whole.

The Importance of Open Models

This situation is crucial not only for innovation but also for security, science, and democratic governance. Open models provide transparency and auditability, enabling governments, educators, healthcare institutions, and small businesses to tailor AI to their specific needs without being tethered to vendors or dependent on opaque systems. The U.S. Must develop more and better open-source models and artifacts. Institutions advocating for openness should build upon their successes. For instance, Meta’s open-weight Llama family has led to thousands of variations on Hugging Face, and the Allen Institute for AI continues to publish outstanding fully open models.

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