New Delhi, Aug. 3 -- China is again a risk for the U.S. stock market, but this time the issue isn't a tariff battle or China's stranglehold on rare-earth minerals.

The latest tension point is something much more dear to investors: the trajectory of artificial intelligence development.

As Chinese start-ups like Moonshot AI, backed by Alibaba Group, and DeepSeek release more AI models priced far lower than U.S. options, U.S. policymakers are grappling with how to deal with this growing rivalry. Investors will be watching closely: at stake are the profitability of AI companies and the economics of the AI ecosystem more broadly.

Many of these Chinese AI models are open source or open weight, allowing licenses that permit the models to be d...