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New Study: Open-source AI can compete with China – if done right

WASHINGTON D.C. (April 17, 2025) – Today the R Street Institute released a new report entitled, “Mapping the Open-Source AI Debate: Cybersecurity Implications and Policy Priorities”. Authored by R Street Resident Fellow of Cybersecurity and Emerging Threats Haiman Wong, the study explores open-source artificial intelligence (AI), weighing its immense potential against the increasing cybersecurity risks, and also outlines strategies for responsible development and governance.

This report comes at a time when the global race for AI dominance is intensifying. Just earlier this month, OpenAI announced that it will be releasing an open-source model. This comes after China’s DeepSeek shocked the world in January with a release of its very own open-source model. The increasing use of these models are raising a number of concerns, especially related to cybersecurity threats such as data manipulation and model manipulation.

Beyond the cyber risks, the investment implications and legal ambiguities also present challenges. But the competition between these tech giants is not slowing down and the stakes of open-source AI governance and development are profound.

For policymakers, it is vital to balance innovation incentives with regulatory safeguards against cybersecurity threats and ethical risks. To address these challenges, Wong explores a number of policy recommendations and technological solutions, including:

  • Establishing federal guidelines to clarify legal ambiguities around AI development and best practices for the use and deployment of open-source AI models, systems, tools, and resources. These guidelines would be voluntary and adaptable.
  • Fostering public–private partnerships for AI validation. This would help develop tools that could assess the safety, transparency, and reliability of open-source models.
  • Implementing risk-tiered liability shields. This would give lower-risk models that are used for education, for example, broader liability protection that encourages innovation while limiting legal exposure.
  • Developing embedded provenance tracking systems to enhance transparency and accountability in open-source AI development. This could allow developers to verify and audit contributions in real time, ensuring a clear history of changes and reducing the risk of tampering.
  • Deploying AI-driven anomaly-detection and behavioral analysis systems. These systems could flag unusual activities, such as spikes in downloads or malicious code commits. This would enable timely intervention, enhancing the security and reliability of open-source AI projects.
  • Promoting accountability mechanisms, such as community-driven reporting and moderation boards which could review flagged issues or concerns and maintain a transparent record of resolutions.

If America is going to maintain its technological leadership, open-source AI is indispensable and competition is imperative. By lowering the barriers to entry, this will empower startups, academic institutions, and independent developers to drive advances that might otherwise be confined to just a few large companies. It is especially important as adversarial nations like China and Russia pursue centralized AI development strategies.

“If open-source AI is supported and guided intelligently, America has a unique opportunity to channel its culture of innovation and entrepreneurship into a force that strengthens national security, drives economic growth, and solidifies its position as a global leader,” Wong concludes.

You can read the full report here. Additionally, you can read Wong’s work on the U.S. cyber security harmonization here. If you would like to speak with Wong, email [email protected].

ABOUT THE R STREET INSTITUTE
As a free-market, free-enterprise public policy organization, the R Street Institute favors competitive markets over markets with regulatory overreach and excessive or redundant regulation. To that end, our motto is “Free markets. Real solutions.”

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Press Release by R Street Institute

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