tech
The AI 'death zone' is here and most corporate AI strategies are standing in it
In July, for the first time, Chinese developed models took all five top positions on OpenRouter, the neutral routing platform that has become the closest thing the AI industry has to a Nielsen rating. Xiaomi’s MiMo V2.5 ranked first by token volume, followed by models from DeepSeek, MiniMax, Alibaba’s Qwen family and Moonshot’s Kimi. Chinese models now carry more than 60% of the platform’s traffic, which exceeds 20 trillion tokens a week.
TL;DR
- Chinese AI models now dominate OpenRouter traffic, holding over 60% of usage, a significant shift from US dominance a year prior.
- US models lead in frontier capabilities, but Chinese models are winning on price/performance and distribution, with models like DeepSeek V4 Flash being significantly cheaper.
- Alibaba's Qwen family has become the most downloaded open model globally, surpassing Meta's Llama, indicating a strong ecosystem lock-in.
- AI strategies that are neither clearly the best nor the cheapest are at risk of being crushed by the bifurcation of the market into premium and commodity lanes.
- Chinese labs engineered around GPU scarcity with token efficiency and novel architectures, supported by state aid, leading to dramatic price cuts.
- Recommendations for US companies include hybrid routing, treating efficiency as a weapon, differentiating above the model layer, and avoiding the 'middle' market.
- The article argues that restricting Chinese models is a tariff on US developers, and the US should compete by releasing credible US and allied open-weight models.