Microsoft CEO Satya Nadella on Wall Street being upset on Chinese open source AI models: One of the things that’s lost in this is understanding of how …

Microsoft CEO Satya Nadella has pushed back against Wall Street’s anxieties over low-cost Chinese artificial intelligence (AI) models, arguing that global trust in American infrastructure and its open ecosystem will keep US tech giants ahead. His comments come at a time when there is an industry-wide debate on open-source AI models versus proprietary models. Speaking with CNN, Nadella addressed concerns surrounding Chinese AI models, such as Moonshot AI’s recently released Kimi K3, which offer advanced coding and reasoning capabilities at a fraction of the cost of US alternatives.When asked if cheaper Chinese technologies hold a competitive edge, Nadella emphasised that American hyperscalers still form the backbone of global AI deployment.“It’s been about trust in our technology, right? So, for example, if you take the Chinese models, guess where these models run? They run on a lot of the hyperscalers — that are American — all over the world,” Nadella said.

Nadella backs leveraging open-weight models for US advantage

Nadella highlighted that since many Chinese developers release open-weight models, Western companies can run, test, monitor and post-train those systems on their own secure platforms. He noted that critics worrying about price competition are missing the broader picture of how the US built its technological dominance in the first place.“I think that one of the things that’s lost in this is the understanding even of how the US became competitive in the first place,” Nadella explained, adding, “We became competitive because we took our technology, we built a rich ecosystem where others could participate… and trust our stewardship of this ecosystem. And as long as that remains, we will absolutely be competitive, and we will win.”

Wall Street rattled by cost-effective rivals

Nadella’s comments come during a heightened investor sensitivity over massive US AI spending. Microsoft holds a roughly 27% stake in OpenAI‘s for-profit public benefit arm, investing billions to maintain top-tier model performance.However, Chinese AI labs have repeatedly disrupted market expectations. For example, last year, the launch of DeepSeek sparked a $1 trillion tech stock sell-off, proving China could develop highly capable models at vastly lower costs. Similarly, in July, Chinese company Moonshot AI released Kimi K3. The AI model drew interest for matching the reasoning and coding benchmarks of Western models offered by the likes of Anthropic and OpenAI.