America's AI Giants Have No Moat — And China Knows It

AI companies like Anthropic and OpenAI are advocating for government regulation under the guise of public safety, but this strategy primarily serves to protect their businesses from competition rather than humanity. These firms lack a sustainable competitive "moat," as their services are easily swappable and face increasing pressure from cheaper, high-quality alternatives like China’s Moonshot AI. By pushing for mandatory safety testing and national security restrictions, these companies are attempting to engineer a form of regulatory capture similar to the 1930s railroad industry, which used government permits to stifle cheaper trucking competitors. This push for regulation threatens to lock in high costs for American businesses and investors, who are currently betting on the long-term profitability of these AI firms despite their lack of current earnings and the rapid commoditization of their underlying technology.