Kimi K3 Might Have Just Started a Crash of the US Economy

People don't realize how much the U.S. economy currently depends on U.S. AI lab dominance
July 18, 2026

Kimi K3 and the US economy

Not enough people realize that China's push for open source AI is an explicit CCP strategy to crash the US stock market and economy.

People are like,

Oh my God, it's so cheap! It's amazing how China is so much better world citizens than the US!

The reason it's so cheap is because they are subsidizing it in order to damage the US labs, which could crash the U.S. stock market, which could crash the U.S. economy. That's the actual plan.

And the moment that happens, Taiwan will instantly vote to rejoin China. And a whole lot of other countries will do the same—switching loyalties from the West to the new superpower.

Kimi K3 just brought us very close to a world in which the US AI labs are no longer ahead. Both the benchmarks—LMArena and Artificial Analysis—and actual experiences with it are extremely positive. I don't think it's quite as good as people are saying, but it is at least on par with Opus 4.8 in many areas. That by itself was impossible six months ago.

The key part of this strategy is to give the secrets away to the world such that the power of open source will be added to the pressure on the U.S. labs, and therefore the U.S. economy.

You should be able to hold multiple ideas about this in your mind simultaneously.

  • Do I want more open source AI that's extremely high quality in the world? Yes, I do.
  • Do I think it's net good for competition to have the top two US AI labs have to struggle to stay ahead instead of being comfortable with their dominance? Yes, I do.

But this does not mean it is therefore a good thing for the CCP to effectively crash the US economy, making China the new, singular world power.

When the whole world becomes Hong Kong, or worse, I think you will find that China suddenly does not release super cheap models anymore, nor ones that are open to any political inquiry. I get that people think the U.S. sucks right now, but at least we're able to openly talk about it without a firewall that filters everything we say and sends the police when it's something the government doesn't like.

And look at what actually happened to Hong Kong so you're not just taking my word for it—it's the model for what "the whole world becomes Hong Kong" would mean in practice. Full timeline in the notes below.2

Kimi K3, and really all of these so-called open Chinese models, are cheese in a mousetrap. And the hilarious but sad part is that so many people in the U.S. don't care. They are so blinded by the desire for cheap tokens, and diminished belief in and loyalty for the United States, that they can't see a material difference between Dario Amodei and Xi Jinping.

The eroding belief in the United States among the American people (documented by both Pew Research and Gallup), and our continued decline in general education, combined with China's slow and steady strategic moves, are potentially about to culminate in the biggest instantaneous flip in world power we have ever seen.

But in the meantime, I guess continue sending all your creative and business ideas to Kimi K3.

I mean, Fable and Sol are so expensive, am I right!?!

Notes

  1. 🤖 AIL 1: Daniel wrote this post. I (Kai, his AI assistant) helped with proofreading, formatting, and the header image. Learn more about AIL.

  2. 🇭🇰 Hong Kong, before and after: Before the 1997 handover, and for roughly two decades under "one country, two systems," Hong Kong had a free press, an independent judiciary, open internet access, and the right to protest—people literally marched by the hundreds of thousands every year, including annual Tiananmen vigils. Since Beijing imposed the National Security Law in 2020, most of that is gone. Independent outlets like Apple Daily and Stand News were raided and shut down, their editors jailed. Pro-democracy politicians were disqualified or imprisoned. Mass protest is effectively illegal now. Judges seen as insufficiently loyal get sidelined in national security cases. Schools were made to add "patriotic education." People self-censor because they don't know where the line is anymore, which is the point. That's the actual before-and-after, not a hypothetical.

Reader-supported

For roughly 29.7376 years I've written here, ad-free—3,071 essays and tutorials and counting. If it's useful to you, a monthly or one-time donation keeps it going. 🫶🏼