Big Tech on Deck, Congress’ Midterm To-Do List, and Cyclospora Outbreak 7/20/26

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**Kelly Evans** (0:57)
You're listening to The Exchange. Here's today's show.
Leslie, thank you very much. The AI infrastructure trade is helping markets rebound today, coming off a down week for the major averages. But the S&P still hasn't made a closing high since early June. I'm Kelly Evans and welcome to The Exchange. Lumentum and SanDisk are among the leaders on the S&P 500 We'll talk to Doug Clinton in a moment. He says China's cheaper AI models do not threaten that trade. He will explain why. Plus, US gasoline prices are back above $4 nationwide as the US bombs Iran for the ninth consecutive night. Oil prices are unchanged today, though, as Iran says talks could be pursued. And an about-face from the FDA, which now says it may not be Taylor Farms lettuce that caused the cyclosporiasis outbreak, shares of Chipotle, Cava and Sweetgreen sinking further today amid the uncertainty. Former FDA Commissioner Dr. Robert Califf will join us. Let's begin with the tech trade, though, as the arrival of competitive Chinese AI models has wreaked havoc on parts of the AI trade. Moonshot's Kibbe K3 model driving a broad-based sell-off on Friday, while Alibaba shares are rising today as they launch a new version of Quen that is said to be second only to Anthropix Fable 5
Kate Rooney kicks things off for us with the very latest on this heated race. So much back and forth, Kate, for today's tech check.

**Kate Rooney** (2:20)
Kelly, so much to cover. A lot of it has to do with China. You mentioned Alibaba taking the spotlight this week with its preview of a model that it claims now is a runner up to rival Anthropix. Best version out there. These are internal benchmarks so far, so we'll see where they stack up in the coming weeks. It does come after Moonshot's Kimi AI model took the tech world by storm just last week. According to independent benchmarks, it is almost on par with Anthropix and OpenAI's best versions out there. It is also the world's largest open weight model. Did see a lot of demand. The company is saying over the weekend that they are pausing subscriptions. That goes back to the compute conversation. CEOs I'm talking to, though, really are framing this new generation out of China as a capability shock. The takeaway has been it is no longer a given that the US frontier labs have a safe lead in AI. It is starting to show up in some of the data. OpenRouter, for example, showing Chinese models overtook US usage last week if you measure that by token usage. This could be a lot of experimenting out there, Kelly, but we'll see where that does net out. OpenAI chairman Brett Taylor on SquawkBox earlier did pour a little bit of cold water on the idea that this all just comes down to cost. He said they may be a little less efficient.

**SPEAKER_6** (3:30)
I think it's a little bit overblown about these open weight models as they're not necessarily cheaper to run. Whether or not they're cheaper to train, you don't care.

**Kate Rooney** (3:39)
All of this, Kelly, is spilling over to geopolitics as well. A report from Axios this morning says the US is now considering banning some of these cutting edge AI models out of China that got a lot of buzz over the weekend on Twitter, Kelly.

**Kelly Evans** (3:51)
So much debate about that. But, Kate, did you say that they were suspended, they've suspended access for because of the demand or no?

**Kate Rooney** (3:59)
Yes. So they pulled back subscriptions. So they said it's very similar to if you think back of when OpenAI launched at GPT, they did not anticipate the amount of demand that came out at the time. And they said, essentially, we don't have the capacity. We're going to take a pause here and make sure we can keep up. That sort of goes into the bull case. You saw it mentioned in a lot of the sell side research this morning. Well, it's far going back from America saying, this is another case that there is compute constraint, that there is not enough compute capacity out there. It's now coming out of China. But yeah, they said a little bit of a pause here. We got to sort of catch up and provide more compute. But it does have implications to the US trade as well.