Hangzhou-based DeepSeek burst onto the scene in January last year with a generative AI chatbot, powered by its R1 reasoning model, that upended assumptions of US dominance in the strategic sector.
This so-called “DeepSeek shock” sparked a sell-off of AI-related shares and a reckoning on business strategy in what was also described as a “Sputnik moment” for the industry.
The chatbot performed at a similar level to ChatGPT and other top American offerings, but the company said it had taken significantly less computing power to develop.
However, its sudden popularity raised questions over data privacy and censorship, with the chatbot often refusing to answer questions on sensitive topics such as the 1989 Tiananmen crackdown.
At home, DeepSeek’s AI tools have been widely adopted by Chinese municipalities and healthcare institutions as well as the financial sector and other businesses.
This has been partly driven by DeepSeek’s decision to make its systems open source, with their inner workings public – in contrast to the proprietary models sold by OpenAI and other Western rivals.
“China-made large AI models spearheaded the development of the global open-source AI ecosystem,” Chinese Premier Li Qiang told an annual gathering of China’s top decision-makers last month.
The AI race has intensified the rivalry between China and the United States, and the White House on Thursday accused Chinese entities of a massive effort to steal artificial intelligence technology.
“The US has evidence that foreign entities, primarily in China, are running industrial-scale distillation campaigns to steal American AI,” science and technology chief Michael Kratsios said in a post on X.
“We will be taking action to protect American innovation.”