Chinese start-up Moonshot published its Kimi K3 model, rated the world’s third most intelligent AI product behind Anthropic’s Claude Fable 5, according to benchmarking site Artificial Analysis, and operable for one-third of the cost. Chinese products are consistently cheaper, hitting the US industry hard as companies cannot compete on price. Fed up with ballooning costs, companies big and small are starting to use lower-priced models, including some built in China, as The Wall Street Journal reported. Fortune magazine reported in May that Microsoft reports expose AI’s real cost problem: using the tech is more expensive than paying human employees. Most businesses do not need top-end frontier products, as US tech entrepreneur Mike Saeks said: “It’s like driving a Lamborghini to go to the grocery store to pick up milk.” Chinese AI offerings are all “open weight”, allowing users to download and customise them, while US products are closed and unalterable. American business adviser Dewardric McNeal of Longview Global wrote for CNBC that the shock arrivals are not one-off events, but demonstrate China has cultivated a frontier AI ecosystem capable of repeatedly producing world-class capabilities across multiple firms, posing a systemic challenge. The US is betting its economic house on AI, with Google, Amazon, Microsoft and Meta investing a combined US1.1 trillion in the past three years and planning to spend another US745 billion this financial year. Total planned investment for the entire