U.S. lawmakers probe Chinese AI model use by American companies

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U.S. lawmakers probe Chinese AI

Highlights

House Committee on Homeland Security and House Select Committee on China launched a joint investigation in April into U.S. companies' adoption of Chinese-developed AI models, sending inquiries to Cursor and Airbnb.
Chinese AI models, such as Moonshot AI's Kimi used in Cursor's Composer 2, are closing the performance gap with U.S. rivals and are cheaper, pushing executives like Brian Armstrong and Flo Crivello to publicly endorse them for cost savings.
Lawmakers are weighing a federal procurement ban on Chinese AI for government and contractors, but experts warn outright bans may be unworkable and could negatively impact start-ups and open-source development.

Congressional inquiry targets corporate AI choices

As reported by CNBC, the House Committee on Homeland Security and the House Select Committee on China said in April that they are jointly investigating the growing adoption of Chinese-developed AI models by U.S. companies. An initial step in the probe includes letters sent by the committees' chairmen to Cursor and Airbnb over their use of, or exposure to, risks tied to AI developed in China.

Lawmakers and administration officials say the spread of China-built models raises concerns about censorship, security and geopolitical influence. A State Department spokesperson says the growing use of Chinese AI models by U.S. companies raises serious concerns, arguing such systems are designed to advance Beijing's narratives, censor dissent and reflect Chinese Communist Party ideology and values.

Andrew Garbarino, chairman of the U.S. House Committee on Homeland Security, says recent reporting that a Chinese open-weight model can match leading U.S. models in certain vulnerability discovery and cybersecurity tasks is highly alarming. Andy Ogles, chairman of the Subcommittee on Cybersecurity and Infrastructure Protection, also calls for a serious strategy to ensure American models are a real alternative to Chinese offerings.

Chinese officials reject the criticism. A spokesperson for the UK embassy of the People's Republic of China says Beijing opposes baseless allegations and malicious smears against its AI development and adds that China's AI sector is built on self-reliance and scientific and technological strength.

Policy options and market impact for the AI sector

Chinese AI models are gaining traction among U.S. firms as they narrow the performance gap with American rivals while remaining cheaper to use. Their adoption is not prohibited for U.S. companies, even though some government departments have banned models including DeepSeek, and executives such as Coinbase's Brian Armstrong and Lindy's Flo Crivello have publicly promoted Chinese models as a way to cut costs.

Cursor, which will be acquired by Elon Musk's SpaceX for $60 billion, built its Composer 2 model using Kimi, a Chinese AI model developed by Moonshot AI. Airbnb tells CNBC that its AI activity runs overwhelmingly on U.S.-origin models, while using a limited number of China-origin open-source models only through approved U.S.-based service providers, with data and operations kept separate and protected.

The joint committee investigation is also examining whether the United States has a sufficient open-weight AI strategy so that American companies and cyber defenders are not forced to choose between expensive or restricted U.S. models and cheaper, capable alternatives from China. That question points to a broader competitiveness issue for the domestic AI sector as lawmakers weigh how to respond without undermining U.S. innovation.

Kyle Chan of Brookings says one possible step is a federal procurement ban covering government agencies and private companies serving the U.S. government, but he adds that banning China's open-source AI models outright is ultimately impossible because model weights are freely available online and could raise First Amendment issues. Daniel Remler of the Center for a New American Security says restrictions are likely to be difficult and could also hurt start-ups that rely on these tools or chill support for open models more broadly.

Our earlier article on the FCC’s move to tighten restrictions on U.S. telecom services with China-linked operators explained how regulators added Digitalsystem Technology to the covered list and denied it authority to provide international telecommunications services. We noted the decision fit into a broader crackdown that has also targeted major Chinese telecom carriers and expanded limits on imports of Chinese-made telecom and surveillance equipment, underscoring Washington’s growing focus on supply-chain and security risks.

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