Jul 27, 2026 – 3.49pm

An emerging United States strategy to halt the turning tide in its artificial intelligence arms race with China by banning rival models exposes a deeper anxiety that an explosion of low-cost alternatives could pop the market’s multibillion-dollar AI bubble.

The US reaction to the shock created by Moonshot AI’s Kimi K3 has been swift and dramatic, with senior administration figures accusing Chinese AI firms of theft, and reacting to news of a cybersecurity breach conducted by a US model by introducing a Kill Switch Act that will shut down any model that poses a threat or goes rogue.

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