China’s Z.ai and America’s Self-Defeating AI Strategy

China’s DeepSeek shocked the global AI community in January by building a frontier model at a fraction of Western costs. Now it has been outdone by a Chinese company subject to U.S. sanctions. It has become painfully obvious that Washington’s strategy of restricting chip exports isn’t working.

Z.ai, formerly Zhipu AI, last week launched GLM-4.5, a production-level open-source model priced at 13% of DeepSeek’s cost. It matches or exceeds Western standards in coding, reasoning and tool use. Z.ai runs on only eight Nvidia H20 chips, which Nvidia recently gained reapproval to sell in China. That’s better performance than DeepSeek with about half the hardware.

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