China narrows AI gap to 2.7% amid open-source push

Technology Aug 23, 2026

China is making big moves in the AI world by going open-source and focusing on building its own tech, especially after facing US export limits.

According to Stanford's latest AI Index, the top Chinese and US AI systems are now separated by just 2.7% in performance.

Moonshot AI's Kimi K3 is a standout: it goes head-to-head with leading US models but at a much lower price.

Kimi K3 $3 undercuts OpenAI pricing

Kimi K3 charges just $3 per million input tokens, while OpenAI's GPT-5.6 Sol costs $5 for the same amount.

That lower price has caught the attention of big names like Mozilla's CTO Raffi Krikorian and Coinbase.

With China's open-source approach also driving more downloads worldwide, US firms relying on pricey proprietary models are starting to feel the heat.