China's efforts to dominate the world of artificial intelligence may bear fruit, as industry insiders and tech analysts told CNBC that Chinese AI models are already highly popular and keeping pace with American models in terms of performance — and sometimes even surpassing them.

AI has become the latest battleground between the U.S. and China, with both sides viewing it as a strategic technology. Washington continues to limit China’s access to advanced chips needed for AI applications amid fears that this technology could pose a threat to U.S. national security.

This has forced China to apply its own approach to improving the appeal and productivity of its AI models, including the use of open-source technologies and the development of its own ultra-fast software and chips.

China Creates Popular LLMs:
Like some leading American companies, Chinese firms in AI are developing so-called large language models (LLMs), which are trained on massive amounts of data and form the basis for applications such as chatbots.

However, unlike OpenAI’s models used in the hugely popular ChatGPT, many Chinese companies are developing LLMs with open-source code or open weights, which developers can download and use for free without strict licensing requirements from the developers.

On Hugging Face, LLM repositories, Chinese LLMs are the most popular in terms of downloads, according to Ticheng Wang, a machine learning engineer at the company. Qwen, an AI model family developed by the Chinese e-commerce giant Alibaba, is the most popular on Hugging Face.

"Qwen is rapidly gaining popularity thanks to its outstanding performance on competitive benchmarks," Wang noted in an email to CNBC.

He added that Qwen has a "very favorable licensing model" that allows companies to use it without the need for "extensive legal checks."