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DeepSeek’s success gives Chinese firms jolt as Beijing seeks sanction-beating breakthroughs

Artificial intelligence start-up’s rise to prominence can motivate China’s tech industry, analysts said, even as US-led curbs continue

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The success of China’s AI start-up DeepSeek has inspired other domestic firms to strive for tech breakthroughs. Photo: Reuters
Frank Chenin Shanghai
The sudden success of Chinese artificial intelligence (AI) start-up DeepSeek comes as a morale booster for the country’s researchers and tech companies, who have been tasked by Beijing to push for breakthroughs in the face of US-led curbs on the trade, industry participants and analysts said.

DeepSeek’s emergence has also changed perceptions among economists and investors towards China’s capacity for innovation, they added, vindicating a long-term push by the country to build up its home-grown talent and technologies.

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“We had grown so used to the pervasive narrative that China can only play catch up and the US’ lead is nearly insurmountable, until DeepSeek emerged,” said Ye Kejiang, a doctoral researcher and head of the cloud computing programme at the Shenzhen Institute of Advanced Technology. “Its success has demonstrated that Chinese firms can conjure breakthroughs amid adversity. It’s a feat science and tech workers like me can relate to.”

With DeepSeek’s R1 language model – unveiled in late January and stunning the tech world with performance rivalling industry leaders at a fraction of the development and use cost – redrawing the global AI landscape, the Zhejiang-based company has become synonymous with China’s efforts to overcome tech bottlenecks, largely in the form of import restrictions imposed by the United States.

Ye, whose institute is part of the Chinese Academy of Sciences, said the firm’s achievement has provided a powerful argument for the feasibility of staking out a claim in the complex tech sector, even without access to the most advanced components.

“DeepSeek shows … China is not behind the West in some aspects of the tech race, like software design,” he said. “China has no shortage of smart, capable talent, whose ingenuity can be on a par with those in the West and even outsmart them.”

05:10

Chinese AI disrupter DeepSeek claims top spot in US App Store, dethroning ChatGPT

Chinese AI disrupter DeepSeek claims top spot in US App Store, dethroning ChatGPT

The once little-known Chinese firm has also helped to upend assumptions about US dominance, suggesting that Washington’s efforts at containment have ultimately proved ineffective.

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David Chao, Asia-Pacific strategist at American financial services company Invesco, said the implications are broad.

“The ramification of this recent development could be that Chinese tech companies are still able to innovate, especially on software, despite US export restrictions on hardware,” he said. “This episode also raises questions about the vast sums that are currently being invested in AI and whether it will turn out to be money well spent.”
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Understanding DeepSeek’s impact on US-China relations
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