U.S. Treasury Secretary Scott Bessent has “the ability to sanction,” and he is not afraid to use it. In an interview with Fox Business on Tuesday, Trump’s Treasury chief said that Chinese open-source AI models should expect increased scrutiny from American authorities. Over the last few months, American frontier AI labs and the Trump administration have accused Chinese open-source providers of IP theft related to advanced AI models developed in the U.S. “We’ve seen a lot of talk about open source models coming and threatening the large language models in the US,” Bessent said. “This administration supports open source models, but what we do not support is IP theft. If we see, especially, that overseas models are stealing from our great companies, we have the ability to sanction them.” The fight over models China and the United States have been locked in a contest for global AI domination, and it has been heating up as of late. The U.S. is still the leader in artificial intelligence, holding a commanding position not just on the frontier AI models through industry leaders like OpenAI and Anthropic, but also on AI chip technology through Nvidia, AMD, and Intel. But Chinese models are quickly bridging that gap. The first signs of this came in January 2025 in the form of DeepSeek’s R1, which was as good at some common AI tasks as OpenAI’s then-best model, and which didn’t require the latest—and most expensive—Nvidia GPUs to run, making it significantly more cost efficient. Its release led to a trillion-dollar market freakout that drove the Trump administration to impose export bans and overall stricter trade restrictions on China.