“China has won the AI war and US firms will go bust”
Author: Brod Justice, Ryan McClure
Published Date: July 27, 2026
That quote comes from renowned economist Steve Keen. Is he correct? While the quote seems very sensationalist, there are now many signs that the AI Bubble Starting is starting to leak.
As we predicted last month, Anthropic’s explosive growth is slowing down: https://blog.tickertrends.io/p/anthropic-vs-openai-arr-tracking
Trump advisors and US pundits, including David Sacks, who only last month were predicting Anthropic would become the world’s largest-ever company are now worried that Kimi 3, the Chinese LLM released last week, threatens US dominance by offering similar performance at 50–80% lower cost than models from Anthropic and OpenAI.
Notably and to their credit, even these commentators are not calling for a ban on open-source (“open weights”) AI models to stop Chinese progress – yet the US government is reportedly considering exactly that. In response, major technology companies have published an open letter warning of the dangers of blocking open-source AI in the USA.
https://images.nvidia.com/pdf/Open-Weights-and-American-AI-Leadership.pdf
Signatories include NVIDIA, AMD, Cloudflare, Dell, Google, Meta, Microsoft, Mistral, OpenAI, Perplexity and many more. Conspicuously absent: Anthropic.
Price margin erosion
Anthropic has since released Opus 5, a model roughly as capable as its flagship Mythos/Fable but significantly cheaper. Will this sell more tokens, or simply deepen its losses?
This is part of what led to the stark view that: “China has won the AI war and US firms will go bust”. So says Steve Keen:
If you are wondering why we might pay attention to Steve Keen, we will note that he was of the few economists credited with anticipating the 2008 financial crash, not just its occurrence, but its mechanism.
The investors are getting nervous
It’s not just Keen. Michael Burry, the famous “Big Short” investor, echoes Keen’s concerns in a recent Substack post on dangerous private leverage.
https://michaeljburry.substack.com/p/short-thoughts-june-24-2026-offshoreÂ
Burry has just made millions betting against Tesla, whose shares have fallen roughly 30% in two months, a fall driven largely by AI-related spending the market doesn’t like. And it’s not just Tesla: Oracle touched $244 last month on excitement about its AI infrastructure build-out; it now sits at $115, less than half that value.
Finally, e-marketer reports that OpenAI’s hopes on securing much needed advertising revenue are going very poorly, at 90% below plan:
https://www.emarketer.com/content/chatgpt-ad-revenues-may-fall-90–short-of-openai-s-2030-target
Our take
At ChatBar AI we have always been keen promoters of AI in business, it’s at the heart of what we build. But it has paid us well to keep a healthy skepticism of the AI hype merchants and their wild valuations. Our goal is to provide realistic, achievable and profitable goals for AI use inside your business.
*Footnote on Distillation
Anthropic, and the US government are complaining that other AI companies, ie the Chinese, are distilling their models. In simple terms, distilling is a method launching many AI queries and using the answers to extract the data structures from the AI model. While we fully support the US and any tech company to defend their products, the distillation complaint is very lame. Anthropic and other AI companies could only build their AI models in the first place by taking all the public data from the Internet. If the Chinese are guilty of stealing data from Anthropic, then Anthropic are guilty of stealing from the public.
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