China Builds Rival AI Order.

Mazen Al Sabbagh

— 5 min read
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TL;DR

  • Beijing's AI Overture: President Xi Jinping leveraged his inaugural WAIC keynote, committing 5,000 AI training opportunities to developing nations and advocating open source, coincident with the establishment of the Shanghai-based World AI Cooperation Organization by 29 countries.
  • Gemini 3.5 Pro Delay: Google's flagship model missed its anticipated launch, with Bloomberg confirming significant delays in coding performance targets, leading to a 4% drop in Alphabet's valuation, approximately $200 billion.
  • Moonshot's Kimi K3 Unveiled: The 2.8 trillion-parameter Kimi K3, featuring a 1-million-token context window, launched with frontier-level benchmarks; open weights are slated for release on July 27.
  • Anthropic's Capital Accumulation: Reports indicate Anthropic is in discussions to lease $10 billion in compute from Meta, supplementing billions in new bank credit, as IPO speculation now includes valuations exceeding $1 trillion.
  • AI Sector Correction: The Nasdaq concluded the week down 1.4%, with a deepening semiconductor sell-off, resulting in Apple regaining its position as the world's most valuable company from Nvidia.

Lead Story: China Builds Rival AI Order

President Xi Jinping initiated the World AI Conference in Shanghai today, delivering his first keynote at the nation's premier AI summit. He positioned China to capitalize on AI-driven expansion, emphasizing "open source, openness, collaboration, and sharing."

These pledges were tangible: 5,000 AI training and seminar opportunities for developing nations over five years, the establishment of AI application cooperation centers with key regional blocs (ASEAN, Arab League, African Union, CELAC, SCO, BRICS), and the expansion of its MAZU weather early-warning system to 30 countries.

Xi characterized AI development as an "international cooperation symphony" rather than a "solo performance." His warning against "security overreach" served as a clear critique of US export restrictions.

Institutionally, the groundwork was laid a day prior: 29 nations formalized the World AI Cooperation Organization (WAICO), an intergovernmental entity based in Shanghai. Its founding roster notably includes Russia, Brazil, Indonesia, Pakistan, and Cuba, alongside ten African states. The US and EU were absent, despite UN Secretary-General António Guterres's presence.

The juxtaposition was stark. Ahead of Xi's address, President Trump delivered a prime-time statement, alleging China orchestrated "the largest compromise of election data in history" involving 220 million voter records—a claim experts swiftly contextualized. CNBC characterized these concurrent broadcasts as a nadir in the tech rivalry.

Days after Beijing demonstrated its domestic AI strategy via companion-AI shutdowns, today unveiled its external projection: open weights, Global South institutional engagement, and governance as the third axis of the US-China tech competition.

In Other News

Gemini 3.5 Pro Officially Delayed. Bloomberg confirms Google’s flagship model is months behind schedule on coding performance, with a late-June training update yielding "disappointing" results. Alphabet’s valuation dropped by $200 billion—over 4%—after the projected July 17 release date passed without its arrival; only an upgraded Flash iteration made it to partner testing. Concurrently, NotebookLM rebranded as Gemini Notebook, integrating a "cloud computer" for its 30 million users.

Moonshot Unveils Kimi K3, Largest Open Model. Moonshot AI introduced Kimi K3, a 2.8-trillion-parameter mixture-of-experts model with a 1-million-token context, integrated visual understanding, and a persistent "thinking" mode. Initially available via the Kimi app, full weights are due July 27. Artificial Analysis ranks K3 fourth globally, trailing only Fable 5, GPT-5.6 Sol, and Opus 4.8. At $15 per million output tokens, K3 signals the end of low-cost Chinese AI, its release strategically complementing Xi's open-source rhetoric.

Anthropic Secures Compute and Capital for IPO. CNBC reports Anthropic is engaged in preliminary discussions to lease approximately $10 billion in computing power from Meta over two years, a proposal following a similar deal for SpaceX's Colossus 1. This could provide Meta a foundational client for its nascent cloud offering. The news follows The Information's report of talks to bolster Anthropic's bank credit line by billions, paralleling SpaceX's pre-IPO liquidity strategy. Valuations exceeding $1 trillion are now circulating for a potential October listing.

AI Sector Sees Fourth Consecutive Decline; Apple Reclaims Top Spot. Equities saw another downturn Friday, with the Nasdaq recovering from a nearly 2% midday drop to close down 1.4% as the semiconductor sell-off intensified. This followed Thursday's 1.47% decline driven by TSMC capex concerns and a 14% fall in SK Hynix ADRs. Apple, valued at approximately $4.9 trillion, reclaimed the world's most valuable company title as Nvidia experienced an intraday drop of up to 3.5%. The underlying market sentiment since Monday indicates a re-evaluation of AI demand's precise value, not a rejection of its fundamental existence.

X / Social Pulse

The Gemini delay generated a bifurcated response: developers who had planned around the July 17 release voiced frustration, while retail traders largely dismissed the 5% drop and capitalized on the dip. Xi's "symphony of international cooperation" declaration circulated widely, eliciting triumphalism in Chinese tech circles and pointed observations in Western commentary regarding the WAICO signatory list. Moonshot's Xinyu Zhou, queried on X about K3's open-source potential, responded with a succinct "Will do." Meanwhile, a week into GPT-Live, Sam Altman noted, "i talk to chatgpt more than i type to it at this point. new voice model really crossed a threshold."

One to Watch

The Weekend's Pivotal Decisions. Claude Fable 5's extended plan-included access concludes Sunday at 11:59 PM PT. DeepSeek's V4 official launch remains scheduled for "mid-July," coinciding with the retirement of its legacy API aliases on July 24. Concurrently, Google faces pressure for a stopgap Gemini release to redirect narrative focus. The market awaits Monday's outcomes.

Quick Hits

  • WAIC Product Debuts: The WAIC exhibition floor hosted over 300 global product launches, notably Huawei's Atlas 950 supernode (scalable to 8,192 NPUs for trillion-parameter training) and ZTE's inaugural AI Agent phone.
  • Korean Market Closure: South Korean exchanges observed a reinstated Constitution Day holiday on Friday, providing a market pause after Thursday's significant chip sector decline in Seoul.
  • Microagi's Record Seed Round: Munich-based robotics firm Microagi secured $55 million in seed funding, led by Hummingbird, marking the largest seed round in German startup history.
  • First Commercial BCI Implant: Shanghai's Huashan Hospital performed the world's first commercial invasive brain-computer interface implant. This involved Neuracle's coin-sized NEO chip, approved in March, for a patient with a chronic spinal-cord injury.
  • Continued State AI Legislation: Hawaii's governor enacted chatbot-safety and deepfake legislation this week. Illinois concurrently restricted AI use in public-school teacher evaluations and healthcare prior-authorization determinations.

What was poised to be Google's day in the model race instead manifested as Beijing's strategic showcase. President Xi Jinping weaponized open source as statecraft, a 29-nation AI consortium commenced operations in Shanghai, and Moonshot delivered the largest open model to date, all while Gemini 3.5 Pro remained in development. Openness, therefore, transcends philosophical discourse; it is the newest and, this week, exclusive offensive vector in the US-China competition.

Sources

Lead: SCMP, Xinhua (pledges), Xinhua (WAICO), PYMNTS, CNBC (Xi speech), CNBC Daily Open, NPR, Time Gemini: Bloomberg, CNBC, 9to5Google, Yahoo Finance, Geeky Gadgets, Google blog (Gemini Notebook), SiliconANGLE Kimi K3: VentureBeat, The Decoder, MarkTechPost Anthropic / markets: CNBC (Meta compute), The Information, Investing.com, CNBC markets, Yahoo Finance midday, Yahoo Finance live, TradingKey, Seoul Economic Daily Pulse / Watch / Quick Hits: Stocktwits, Latent Space AINews, Altman on X, TechTimes Fable 5, DeepSeek API docs, Global Times via Manila Times, IBTimes AU, Tech Startups, SCMP (BCI), Transparency Coalition

Lock in. M. mazen@thorterminal.com

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