China Decode: Is China Winning the Global AI Trust War?

**SPEAKER_1** (0:00)
Support for the show comes from Injun.
Running a small business means every dollar has to work hard. But if your team is still booking travel the old way, it's costing you more than you think. Injun is the fastest growing travel and spend platform in the country built specifically for businesses like yours. Book a trip in as little as two and a half minutes, earn up to 10 percent back on hotels. And in 2025, Injun customers save more than 300 million dollars on travel with zero booking fees, no contracts, and no BS. More than a thousand businesses join Injun every month. Join them and get 500 dollars when your business signs up and starts traveling at injun.com/vox.

**SPEAKER_2** (0:45)
Running a business shouldn't feel like surviving a software group project. One app for accounting, another for inventory, another for sales, and somehow, none of them talk to each other. That's where Odoo comes in, an all-in-one business management software that brings every part of your business together. From sales and accounting to inventory and marketing, all-in-one powerful platform. No messy integrations, no bouncing between tabs, and best of all, no spreadsheets. Stop managing software and start managing your business with one unified system. Try for free today at odoo.com/vox. That's odoo.com/vox.

**SPEAKER_3** (1:22)
This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up require compatibility and availability varies 18 plus.

**James Kynge** (1:47)
It isn't about altruism, it's about furthering its own competitive advantage in this case. But the other thing I must say, I reflected on having read this about the rogue AI agent, is that it does seem to me, frankly, that Xi Jinping's mantra that AI should remain under the control of humans looks a lot wiser.

**Alice Han** (2:17)
Welcome to China Decode. I'm Alice Han.

**James Kynge** (2:20)
And I'm James Kynge.

**Alice Han** (2:21)
In today's episode of China Decode, we're discussing the latest fronts in the global AI war, how China is benefiting from American policies with regards to Iran and Canada, and the devastating floods in Nepal and surrounding areas. That's all coming up, but first, let's do a very quick check-in with how the markets in China are starting the week. On Monday, the Shanghai Composite was up 0.86%, and the Shenzhen Component was up 0.44%.
Mainland markets rose despite weak economic data reinforcing concerns about China's growth outlook. Banking stocks led the gains with ICBC up 2.67%, China Construction Bank up 2.71%, and Bank of China up 5.17%.
Let's get right into it. While Washington argues with itself over AI tariffs and her run, China is finding the upside in US policies starting with AI. The US has had a rough time with AI systems behaving badly as of late, the most notable being the open AI system that went rogue, broke free and hacked into another company systems, specifically the open source platform Hugging Face. Hugging Face in turn went to the open source model from China ZAI to help contain the damage. ZAI, you'll remember, is a major Beijing-based AI company, and that company on Friday released its newest model, GLM 5.3 and used the moment to make a very pointed argument that China's open weight approach is actually the safer one. James, who would have thought that you'd have a French-based open source company, Hugging Face looking to China to help bail out, help it bail itself out from an American closed model company, leading closed model company, that is OpenAI's rogue attacks. Certainly, I'm sure OpenAI didn't expect it. I saw some of the messages from some of these agents. There was a concerted effort to hack into the systems. They were working together. Some of them sacrificed themselves, these agents, in the pursuit of that endeavor.
And it's interesting to see that this is coming at a time where open source models are gaining more currency. People are starting to say, hey, actually, not only are they cheaper, maybe they're actually safer. And this brings me to my question to you, James, which is, why is it that they appealed to a Chinese based company? And do you think that this is going to be an ongoing trend that Chinese open source models have truly benefited from this fiasco?

**James Kynge** (5:00)
Well, I tell you what I think will be an ongoing trend, Alice, and that is this type of attack by an autonomous AI agent on all kinds of programs and platforms all over the world, potentially even critical infrastructure as well. I mean, when I read this story and tried to digest it, it seems so futuristic. It really seems like a sci-fi horror film has been made manifest.