Chinese tech giants are experiencing disruptions similar to OpenAI, courtesy of DeepSeek.
Huawei recently announced that they would be running DeepSeek, a high-performing AI model, on their domestic computing hardware using Ascend processors. Analysts at Bernstein praised this move, stating it demonstrates China's ability to deliver globally competitive AI with domestically developed hardware, replacing the need for Nvidia's chips.
Starting in late 2022, the U.S. imposed several rounds of export controls on China, aiming to deny the country advanced technology for fear of usage in weapon development and AI systems. However, DeepSeek's success in developing its AI model at a lower cost challenged this assumption.
The popularity of DeepSeek's AI Assistant app has caused shockwaves worldwide. Launching in late January, the app quickly surpassed ChatGPT in global downloads, boasting 22 million daily active users within 20 days. Its founder, Liang Wenfeng, has become a national hero despite analysts voicing concerns about bottlenecks in China's AI chip development, due to US export restrictions.
Beyond chipmakers, major Chinese tech firms like Alibaba, Tencent, Baidu, and ByteDance have integrated DeepSeek's AI model into their cloud platforms, attracting users to their platforms for revenue. Despite having their own large language models, they welcome DeepSeek to enhance their offerings.
DeepSeek's success has led AI giants like Nvidia, Microsoft, and Amazon to embrace it as well. Its open-source collaboration strategy and efficiency optimization techniques set it apart from competitors. However, the company's rapid rise has drawn scrutiny from various governments due to data security concerns.
This breakthrough suggests U.S. export restrictions on advanced AI chips may not be as effective as intended. China's ability to deliver high-performing AI with domestically developed hardware puts pressure on U.S. tech giants to reconsider their costs and strategies. DeepSeek's user adoption and technological advancements have raised concerns among national security communities and other players in the global tech industry.
The integration of DeepSeek's AI model into Alibaba, Tencent, Baidu, and ByteDance's cloud platforms has significantly boosted their revenues, demonstrating the value of homegrown tech in the business sphere. Moreover, even tech giants like NVIDIA, Microsoft, and Amazon have recognized the potential of DeepSeek's open-source strategy and efficiency, choosing to collaborate in the tech domain.
