U.S. Lawmakers Investigate Chinese AI Model Adoption by Companies

Two U.S. House committees have launched a joint investigation into American companies' increasing reliance on artificial intelligence models developed in China, marking an escalation in the technological rivalry between Washington and Beijing.

The House Committee on Homeland Security and the House Select Committee on China initiated the probe in April, according to details first reported by CNBC. The investigation targets companies including coding platform Cursor and hospitality giant Airbnb over their use of Chinese-developed AI systems.

The cost advantage driving adoption

Chinese AI models have gained significant traction among U.S. businesses as they've narrowed the performance gap with American competitors while offering substantially lower costs. Tech executives including Coinbase CEO Brian Armstrong and Lindy founder Flo Crivello have publicly endorsed using Chinese models to reduce expenses.

Cursor, which SpaceX is acquiring for $60 billion, built its Composer 2 model using Kimi, an AI system from Chinese developer Moonshot AI. The company declined to comment on the congressional investigation.

Airbnb responded that its AI operations run "overwhelmingly on U.S.-origin models" and that it uses only a "limited number" of Chinese open-source models through approved U.S.-based service providers with separated data protections.

Security concerns and policy challenges

Andrew Garbarino, chairman of the House Committee on Homeland Security, told CNBC that China "is racing to close the gap in some of the exact capabilities that will shape the future of cybersecurity." He expressed particular alarm about Chinese models matching U.S. systems in vulnerability discovery and cybersecurity tasks.

A State Department spokesperson said Chinese AI models "are designed to advance Beijing's narratives, censor dissent, and reflect CCP ideology and values." China's U.K. embassy rejected what it called "baseless allegations and malicious smears," stating the country's AI sector is "built on self-reliance and strength in science and technology."

The investigation is examining whether the U.S. has an adequate strategy to prevent American companies from choosing between expensive domestic models and cheaper Chinese alternatives. Currently, no federal prohibition exists on private companies using Chinese AI systems, though some government departments have banned them.

Why it matters

The investigation highlights a fundamental tension in AI policy: how to address national security concerns about foreign technology without stifling innovation or violating free speech protections. Unlike proprietary software, open-source AI models are freely available online, making traditional bans difficult to enforce and potentially raising First Amendment issues. The outcome could reshape how American companies build AI systems and determine whether cost or security becomes the primary factor in technology choices.

Limited enforcement options

Policy experts note the administration faces significant constraints. Kyle Chan, a fellow at the Brookings Institution, said federal procurement bans could restrict government agencies and contractors from using Chinese models, but "it's ultimately impossible to ban China's open-source AI models because their model weights are available freely on the internet."

Daniel Remler, senior fellow at the Center for a New American Security, told CNBC that while the Trump administration is "clearly worried" about the risks, restrictions could "harm start-ups that use these models, or chill support for open models generally."

Potential approaches include procurement requirements discouraging Chinese AI use among government contractors and disseminating risk assessments to private companies. Representative Andy Ogles warned in June that without action, "Chinese models become the default foundation of the global digital economy, carrying embedded censorship, uncertain security, and capabilities distilled from our own laboratories."

These details were first reported by CNBC.