China offers free AI to developing world as US tightens export controls on models

China's top diplomat Wang Yi announced on Wednesday that Beijing is accelerating the establishment of a global AI cooperation organization, offering free or low-cost AI models to developing countries. The announcement came as the G7 summit in France concluded with discussions about giving trusted partners access to leading US AI models, according to Reuters.

The timing is deliberate. Wang spoke at the release of China's global governance whitepaper, which criticized trade wars and emphasized support for the Global South. Vice chair Zhao Haibing of China's top economic agency pushed back on closed, exclusive and monopolistic approaches to tech development, language aimed directly at Washington.

Investment flows shift as enterprises struggle with AI ROI

While governments debate access, private capital is moving. Behavox raised $175 million in preferred equity from HPS Investment Partners, the private credit firm BlackRock acquired for $12 billion last year. The funding will expand Behavox's unified AI compliance platform and pursue acquisitions, its first equity raise in six years.

Venture capitalists see a different winner. Chi-Hua Chien, a veteran VC who spotted Facebook early, says the real AI winners won't be selling AI itself. NEA's Tiffany Luck notes enterprises are still figuring out their AI ROI, pointing to Uber reportedly blowing through its annual AI budget in months and some companies cutting Claude licenses.

• China's DeepSeek, Qwen, and other open-weight models are available for free download, targeting the Global South that cannot afford enterprise AI subscriptions.
• The US Commerce Department ordered Anthropic to shut down its Fable 5 and Mythos 5 models, cutting off foreign users.
• Anthropic and Google DeepMind called for a US-led AI coalition at the G7, and Canada agreed.
• President Xi Jinping proposed a Global Governance Initiative at the Shanghai Cooperation Organisation last summer.
• Premier Li Qiang announced the global AI cooperation organization at a Shanghai conference in July 2025.

Legal challenges mount against US AI export controls

The legal basis for the US ban on Anthropic's most powerful models looks increasingly shaky, according to legal experts cited by Gizmodo. Whether the administration cares about the legal basis remains an open question, but the uncertainty adds to the structural split between the US and China approaches.

For the 6 billion people living outside the G7, the question is not which system is better but which system shows up first. China is routing its AI diplomacy through BRICs and the Shanghai Cooperation Organisation, while the US builds an alliance of wealthy democracies with controlled access. The two competing visions of AI governance are now diverging in public, and the developing world will choose based on availability.