US-China AI Competition Intensifies

Moonshot AI's Kimi K3 model catching up to frontier capabilities, with Arizona chip manufacturing at center of national security fight. Trump frames AI race as national security imperative, justifying ban on Chinese models. Treasury Secretary Bessent threatens sanctions. AI distillation identified as national security risk. Commerce Department's export program drew only 78 applications, driving enterprises to open-source. China considering national security laws to restrict overseas access to its frontier models. FY2026 NDAA codifies DeepSeek prohibitions.