China’s AI Companies Are Going Closed Source

We explain why

This post originally appeared in ChinaTalk.

“China’s leading AI players do not have the funds to burn tens of billions like America’s leading labs, and the sheen of open source vibes in 2025 has worn off.”

In the first week of April, two of China’s leading labs announced they were pushing closed frontier models. Alibaba’s Qwen team launched Qwen3.6-Plus and Qwen3.5-Omni as hosted offerings on Alibaba Cloud. Z.ai recently announced that GLM-5-Turbo is being rolled out as a closed-source model. Globally competitive video models like ByteDance’s Seedance 2.0 and Kuaishou’s Kling 3.0 are both proprietary.¹ Why? Because teams training Chinese AI models need to make money.

Open source AI in China did have a moment. Reeling from the shock of ChatGPT in 2023 and 2024, Chinese model makers gained global mindshare and adoption by putting out models that were worse than America’s top labs but were varying degrees of open source. There are real idealists in the Chinese ecosystem, and Deepseek’s global impact had the whole Chinese ecosystem spending 2025 trying to match their impact with open models.