The global AI race has entered a new phase, and China has the cost advantage: Brookings' Kyle Chan

• China's AI models are closing the performance gap with US rivals and offer a lower cost per task.
• Chinese firms are innovating in model architecture and building out their own compute infrastructure to reduce costs.
• New monetization strategies, like revenue sharing for open-source models, are emerging from Chinese AI companies.

The global AI race is evolving, with China gaining a significant cost advantage in AI models. While potentially less token-efficient, Chinese models offer better value per task due to lower per-token costs and architectural innovations, making them increasingly attractive to global businesses.