The Hidden Cost of Chinese AI: Security, Governance, and Business Risk

In Episode 16 of The AI Arena, host Sean Shecter is joined by Ankura Consulting Senior Managing Directors Chuck Peruchini and John Schrader to examine the rapid rise of lower cost Chinese AI models, and what their growing capabilities could mean for businesses evaluating their usage. This timely discussion explores why an AI model that appears cheaper upfront may ultimately carry significant downstream costs. Sean, Chuck, and John address concerns involving cybersecurity vulnerabilities, data privacy, IP exposure, political bias, software supply-chain transparency, regulatory uncertainty, and the possibility that a model or provider could later become subject to sanctions or other restrictions. They also explain why businesses must look beyond the advertised price of a model and account for the broader costs of data preparation, integration, compliance, monitoring, infrastructure, and oversight. Listen to the full conversation to learn more about the risks of “shadow AI,” including employees using unapproved tools and inadvertently exposing sensitive company information.