Despite impressive models from companies like DeepSeek, China's AI ecosystem is heavily reliant on "distilling"—essentially copying and refining—open-source models from the US. This dependency on an external innovation engine is a major weakness in their national strategy to achieve genuine AI leadership and self-sufficiency.

Instead of competing to build sovereign AI stacks from the chip up, India's strategic edge is in applying commoditized AI models to its unique, population-scale problems. This leverages the country's deep experience with real-world, large-scale implementation.

Most nations' sovereign AI strategies will not involve creating frontier models from scratch. Instead, they will adopt the best open-source models, customize them with local data and values, and run them on-premise for national security.

Nations are moving beyond the rhetoric of 'sovereign AI.' It now represents a concrete strategy to secure bargaining power across the AI stack through diverse means like domestic substitution (China), regulation (Europe), and infrastructure hosting (Gulf states).

The open vs. closed source debate is a matter of strategic control. As AI becomes as critical as electricity, enterprises and nations will use open source models to avoid dependency on a single vendor who could throttle or cut off their "intelligence supply," thereby ensuring operational and geopolitical sovereignty.

The AI competition is not a race to develop the most powerful technology, but a race to see which nation is better at steering and governing that power. Developing an uncontrollable 'AI bazooka' first is not a win; true advantage comes from creating systems that strengthen, rather than weaken, one's own society.

Contrary to past momentum, the most advanced AI startups are increasingly adopting and fine-tuning open-source models. This shift is driven by the need for cost-effective speed and deep customization as their workloads mature and scale.

For many companies, 'AI sovereignty' is less about building their own models and more about strategic resilience. It means having multiple model providers to benchmark, avoid vendor lock-in, and ensure continuous access if one service is cut off or becomes too expensive.

The United States lacks a coherent national strategy for open-source AI, while China is rapidly producing high-quality models. This has created a situation where American companies are increasingly turning to Chinese-developed models to make their AI pipelines more efficient and competitive.