Anthropic struggling with Chinese competition, its own safety obsession

Summary

Anthropic, riding a wave of goodwill after resisting demands from the US Defense Department to soften model safeguards, is reportedly planning to go public as soon as Q4 2026. That may not be soon enough to avoid the undertow of financial pressure, competition from China, and the challenge of delivering AI models that provide some measure of safety without sacrificing too much utility. The company's financial picture isn't pretty. In a legal filing [PDF] earlier this month, CFO Krishna Rao revealed that the company, which has raised $30 billion, has only managed to make $5 billion while spending $10 billion on inference and training alone. Against this backdrop, recent cost-saving moves designed to reduce token demand during peak hours fail to inspire optimism. But there's a more fundamental risk – remaining relevant in the face of increasingly capable competition from China. On Monday, the US-China Economic and Security Review Commission issued a report assessing the competitive threat posed by Chinese AI companies. "Chinese labs have narrowed performance gaps with top Western large language models," the report says. "They have also developed key architectural and training advances that are now industry standards." The success of Chinese AI companies can be seen in the popularity metrics of sites like LLM Rankings, which tracks the most popular models on OpenRouter, an API and marketplace for providing developers with access to multiple AI models through a single interface. Presently, the top six models in that ranking come from Chinese AI companies. They include: MiMo-V2-Pro (Xiaomi), Step 3.5 Flash (stepfun), DeepSeek V3.2 (DeepSeek), MiniMax M2.7 (MiniMax), MiniMax M2.5 (MiniMax), and GLM 5 Turbo (z.ai). Anthropic's Claude Opus 4.6 and Claude Sonnet 4.6 currently occupy slots seven and eight. Perhaps more significantly, Anthropic has seen its market share slip from 29.1 percent on March 22, 2025 to 13.3 percent on March 21, 2026. That's only one measurement and ...