SEOUL, January 31 (AJP) - A little-known Chinese startup has sent shockwaves through the global artificial intelligence industry, unveiling a model that rivals OpenAI’s ChatGPT in both performance and cost efficiency.
The breakthrough by DeepSeek, a firm with just 180 employees, has been likened to the Soviet Union’s launch of Sputnik, a moment that reshaped the geopolitical landscape by signaling Moscow’s early lead in the space race.
On Jan. 27, DeepSeek’s AI model, R1, surged to the top of Apple’s App Store free download rankings, surpassing OpenAI’s ChatGPT. The impact was immediate: Nvidia, the dominant supplier of AI chips, saw its stock plunge 17 percent in a single day.
China’s AI momentum did not stop there. Two days later, Alibaba, the country’s largest e-commerce company, unveiled Qwen2.5-Max, a model it claims outperforms DeepSeek’s.
Meanwhile, another Chinese AI startup, Moonshot AI, introduced Kimi 1.5, intensifying competition in a market long dominated by U.S. firms. As Beijing accelerates AI development, producing models that challenge Silicon Valley’s best, the global race for AI supremacy is entering a new phase.
DeepSeek’s rise is even more striking given the strict U.S. semiconductor export controls imposed since 2022, which were designed to slow China’s AI progress.
Defying those restrictions, Chinese engineers have developed models using lower-grade Nvidia GPUs and have made notable advances in domestic AI chip development. Reports indicate that DeepSeek’s R1 relies heavily on Huawei’s Ascend 910C AI chips for inference processing.
With China’s rapid AI advancements, the U.S.-China tech rivalry is poised to escalate further, as both nations race to integrate AI into critical industries, from software development and robotics to autonomous vehicles.
Dario Amodei, CEO of U.S. AI firm Anthropic, warned that by 2026 or 2027, the world will enter a new era in which both the U.S. and China possess equally powerful AI models. “If China, with its vast industrial base and military strength, reaches parity with the U.S. in AI, it will command influence across all technological fronts,” he said.
South Korean experts are also raising alarms. While the country maintains a strong position in semiconductors and electronics, it lags behind in next-generation AI and AI chip technology.
"The DeepSeek shock is a wake-up call," an analyst said, warning that South Korea risks falling behind in the rapidly unfolding AI transition.
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