China’s Agentic AI Controversy

(Samm Sacks – Lawfare) A powerful new artificial intelligence (AI) agent called OpenClaw and Moltbook, a social networking site just for AI agents, has rocked the tech world with fear and excitement about what an AI future could look like. Just three months earlier, China gave us a glimpse of that future with its own controversy erupting over the first-ever smartphone with an AI agent embedded in the operating system. These developments have unleashed fierce debate in China and around the world about the security and privacy trade-offs that come with the expansive permissions necessary for agentic AI to succeed. The outcome of these debates in China will have ripple effects on AI everywhere. The Doubao AI phone quickly became among the hottest products in China’s fiercely competitive market. “I got my hands on one,” a friend in Beijing boasted late last year. He had bagged a limited edition ByteDance ZTE AI smartphone, also called the Nubia M153, released to much fanfare in China in early December 2025. Nothing like it exists beyond China, and it is upending the way that users interact with their devices, and revolutionizing how information flows among apps. “It has ushered in a profound transformation when it comes to control of traffic entry points, the boundaries of data security, and the future paradigm of human-computer interaction,” proclaimed a readout from a special forum held in Beijing days after the phone’s release. Indeed, the AI phone has caused an uproar in China. Within days, many of China’s biggest apps blocked the Doubao phone. They saw it as a serious risk to data security. Built into the operating system of the phone itself, it has a kind of master key that gives the embedded AI agent blanket access to the screen, all app content, and the ability to tap or click as if it were a user. Critics dubbed the agent a “burglar” with “god’s fingertips” increasing risks of malicious input and intrusion attacks by criminal actors. For the banks, it was impossible to distinguish actions taken by the agent and those of the user, creating myriad vulnerabilities for fraud and hacking. – China’s Agentic AI Controversy | Lawfare