What is China government's view on DeepSeek? How is Chinese startup disrupting the AI sector?

Chinese startup DeepSeek's launch of its latest AI models, which it says are on a par or better than industry-leading models in the United States at a fraction of the cost, is threatening to upset the technology world order.

The company has attracted attention in global AI circles after writing in a paper last month that the training of DeepSeek-V3 required less than $6 million worth of computing power from Nvidia H800 chips.

DeepSeek's AI Assistant, powered by DeepSeek-V3, has overtaken rival ChatGPT to become the top-rated free application available on Apple's App Store in the United States.


This has raised doubts about the reasoning behind some U.S. tech companies' decision to pledge billions of dollars in AI investment and shares of several big tech players, including Nvidia, have been hit.

Beijing on DeepSeek

DeepSeek's success has already been noticed in China's top political circles. On January 20, the day DeepSeek-R1 was released to the public, founder Liang attended a closed-door symposium for businessman and experts hosted by Chinese premier Li Qiang, according to state news agency Xinhua.

Liang's presence at the gathering is potentially a sign that DeepSeek's success could be important to Beijing's policy goal of overcoming Washington's export controls and achieving self-sufficiency in strategic industries like AI.

A similar symposium last year was attended by Baidu CEO Robin Li.

ChatGpt to DeepSeek - Disruptor in AI Industry

The release of OpenAI's ChatGPT in late 2022 caused a scramble among Chinese tech firms, who rushed to create their own chatbots powered by artificial intelligence.

But after the release of the first Chinese ChatGPT equivalent, made by search engine giant Baidu , there was widespread disappointment in China at the gap in AI capabilities between U.S. and Chinese firms.

The quality and cost efficiency of DeepSeek's models have flipped this narrative on its head. The two models that have been showered with praise by Silicon Valley executives and U.S. tech company engineers alike, DeepSeek-V3 and DeepSeek-R1, are on par with OpenAI and Meta's most advanced models, the Chinese startup has said.

They are also cheaper to use. The DeepSeek-R1, released last week, is 20 to 50 times cheaper to use than OpenAI o1 model, depending on the task, according to a post on DeepSeek's official WeChat account.

But some have publicly expressed scepticism about DeepSeek's success story.

Scale AI CEO Alexandr Wang said during an interview with CNBC on Thursday, without providing evidence, that DeepSeek has 50,000 Nvidia H100 chips, which he claimed would not be disclosed because that would violate Washington's export controls that ban such advanced AI chips from being sold to Chinese companies. DeepSeek did not immediately respond to a request for comment on the allegation.

Bernstein analysts on Monday highlighted in a research note that DeepSeek's total training costs for its V3 model were unknown but were much higher than the $5.58 million the startup said was used for computing power. The analysts also said the training costs of the equally-acclaimed R1 model were not disclosed.

FAQs

Q1. When was OpenAI's ChatGPT released?
A1. OpenAI's ChatGPT was released in late 2022.


Q2. How is Chinese government viewing DeepSeek?
A2. DeepSeek's success has already been noticed in China's top political circles. On January 20, the day DeepSeek-R1 was released to the public, founder Liang attended a closed-door symposium for businessman and experts hosted by Chinese premier Li Qiang, according to state news agency Xinhua.