But OpenAI’s earlier decision to release open-source versions of its powerful model—the first time it’s done so since 2020, may be more consequential. OpenAI’s move follows a flood of Chinese AI models spurred by the surprise release from Chinese AI startup DeepSeek.

It’s a major shift for the U.S. AI developer, now worth $300 billion. Open weight models allow developers to fine-tune for specific tasks without retraining it from scratch. Despite its name, OpenAI has focused on releasing closed, proprietary models, meaning developers couldn’t get under the hood to see how they worked—allowing OpenAI to charge for access to its powerful models. 

DeepSeek tested that strategy. The Hangzhou-based start-up made waves by releasing models that matched the performance of products from Western rivals like OpenAI and Anthropic. By making its technology openly accessible, DeepSeek allowed developers around the globe to experience the power of its models firsthand.

Since then, Chinese AI development has exploded, with companies large and small rushing to unveil increasingly advanced models. Most releases are open-source. 

“Globally, AI labs are feeling the heat as open source models are increasingly recognized for their role in democratizing AI development,” Grace Shao, an China-based AI analyst and founder of AI Proem, says. 

U.S. tech stocks have rebounded from the slump triggered by DeepSeek, but the shift to open-source may be more permanent. In March, OpenAI CEO Sam Altman conceded that the developer may have been on the “wrong side of history” by maintaining a closed approach. 

The race is now geopolitically charged. Ahead of releasing the open-source models, Altman said he was “excited for the world to be building on an open AI stack created in the United States, based on democratic values, available for free to all and for wide benefit.” Altman’s statement leans into a growing competition over AI–one that developers in the U.S. are worried of losing.

“This plethora of simultaneous open AI models (with published weights and papers about technique) is an ‘idea orgy.’ The collective innovation should easily soar past anything one company can do alone,” Benchmark general partner Bill Gurley wrote on X in late July. “It’s formidable and should easily win over single proprietary players (anywhere in the globe).”

China embraces open-source

Chinese AI firms are now aggressively championing open-source. 

Baidu, once the leader in China’s AI development with its ERNIE model, went open-source a few months ago to catch up with Alibaba and DeepSeek. Kuaishou and Tencent have both released open-source video-generation models. Zhipu AI, Moonshot AI and MiniMax–some of China’s so-called “AI tigers”—have also released open-source models in recent weeks.

Rather than closely guard their breakthroughs, Chinese developers think an open approach will encourage greater innovation and encourage adoption. “When the model is open-source, people naturally want to try it out of curiosity,” Baidu CEO Robin Li told analysts in February, soon after the company unveiled its plans to go open-source

And there’s a business argument too: Alibaba executives, for example, argue that their open-source Qwen models encourage companies and startups to use Alibaba’s cloud computing services. 

Since DeepSeek’s release, Chinese companies have rushed to integrate Chinese AI models into their products, including social media platforms, cars, and even air-conditioners. 

There may also be a psychological element at play. Going open-source lets users around the world see the power of Chinese AI models for themselves, appealing to an up-and-coming tech sector that’s long been denigrated by outsiders as a copycat.

Export controls

China has supported other open-source technologies. Officials back the use of the RISC-V chip design architecture, an open-source alternative to proprietary architectures like ARM and Intel’s x86. RISC-V allows Chinese chip engineers to share best practices and ideas, spurring the growth of the broader sector. 

Beijing seeks to develop a self-sufficient semiconductor sector, in part due to concerns of the U.S.’s control of critical parts of the chip supply chain. The Biden administration’s decision to impose chip controls in 2022 intensified China’s push for domestic innovation. 

China’s embrace of RISC-V has raised eyebrows in Washington. Last year, the House Select Committee on the Chinese Communist Party recommended that U.S. officials study the risks of RISC-V, and reportedly proposed preventing U.S. citizens from aiding China on the open-source architecture. 

Leaders vs. followers

China’s embrace of open-source aligns with the country’s initial position as a runner-up in AI.

“If you’re an OpenAI, an Anthropic, a Google…if you’re really leading, then you have this incredibly valuable asset,” Helen Toner, the director of strategy at Georgetown’s Center for Security and Emerging Technology, said at the Fortune Brainstorm AI Singapore conference in mid-July. “It’s easy to understand why they wouldn’t want to just hand out [their models] for free to their competitors if they’re able to sell access to their closed systems at a premium.”

But for followers, who “can’t compete at the frontier,” releasing an open-source model is a way to show “how advanced you are,” she explained. 

Open-source models also “buy a lot of goodwill,” Toner, who once served on OpenAI’s board, added. “What we’ve seen over the last couple years is how much soft power is available to people who are willing to and organizations that are willing to make their technology available freely,” she explained.

The U.S. may now recognize the “soft power” potential of open-source. “The United States is committed to supporting the development and deployment of open-source and open-weight models,” Michael Kratsios, director of the U.S. Office of Science and Technology Policy, said in South Korea earlier this week

And with OpenAI’s decision, U.S. AI is now perhaps put in a rare position: Following, not leading.

A federal grand jury has indicted Hank Risan, the 70-year-old founder of purported music streaming service BlueBeat, on four counts of wire fraud in connection with alleged misrepresentations to investors totaling approximately $3.17 million.

BlueBeat operated as a consumer music streaming platform that claimed to offer “millions of songs” for streaming, competing with services like Spotify and Apple Music through $5-per-month Basic and $7-per-month Premium subscription tiers.

The platform featured prominent artists including The Weeknd and Taylor Swift on its artist pages.

The indictment, filed on July 31, 2025 and unsealed on August 7, alleges that Risan made false claims about BlueBeat’s copyright ownership of approximately 2.5 million songs by well-known artists to attract investors to his Santa Cruz-based companies Media Rights Technologies (MRT) and BlueBeat.

According to prosecutors, Risan provided investors with fabricated valuations of BlueBeat and MRT, falsely claimed that a multi-national media and entertainment conglomerate was in the process of acquiring BlueBeat, and made untrue statements about involvement from a former U.S. Department of Commerce undersecretary.

In one November 2020 communication to investors, Risan allegedly wrote that he “received a very favorable comparable regarding the BlueBeat Catalog” and noted “BlueBeat contains approximately 2.5 million songs and $10K per song brings music to my ears.”

The Department of Justice alleges that BlueBeat did not actually own the copyrights to the claimed 2.5 million songs, and that the company valuations were fictional.

Through these alleged misrepresentations about BlueBeat’s music catalog ownership and business prospects, Risan purprtedly induced investors to purchase approximately $1.96 million in stock and stock conversions, while also securing additional payments characterized as loans totaling approximately $3.17 million overall.

Prosecutors allege that Risan used the fraudulently obtained funds for personal expenses including credit card payments, mortgage payments on his residence, and purchasing collectibles.

Risan was arrested and made his initial court appearance in federal court in San Jose before being released on a $100,000 unsecured bond. He is scheduled to appear for a status conference on October 8, 2025 before U.S. District Judge P. Casey Pitts.

According to the DoJ: “If convicted, the defendant faces a maximum sentence of 20 years in prison and a fine of $250,000 for each count of wire fraud in violation of 18 U.S.C. § 1343.”

Assistant U.S. Attorneys Matthew Chang and Jeff Nedrow are prosecuting the case with assistance from Natachiana Burney and Susan Kreider, following an investigation by the FBI.

Media Rights Technologies has a history of legal disputes in the music industry.

The company reportedly paid a $950,000 settlement to EMI in 2011 after allegedly infringing on several Beatles tracks through soundalike recordings offered for 25 cents each on BlueBeat. MRT has also initiated intellectual property litigation against Microsoft, with one case filed as recently as December 2024 alleging “billions of copyright violations as well as trade secret theft.”

This latest case adds to a growing series of streaming fraud prosecutions targeting individuals who have allegedly defrauded the music industry. Earlier this year, North Carolina musician Michael Smith was indicted for allegedly generating over $10 million in fraudulent streaming royalties using AI-generated songs and bot accounts.Music Business Worldwide

A required part of this site couldn’t load. This may be due to a browser
extension, network issues, or browser settings. Please check your
connection, disable any ad blockers, or try using a different browser.