DeepSeek's Success Sparks AI Investment Boom in China

DeepSeek's progress shows rise of China's AI companies, says Chinese official

BEIJING, March 4 (Reuters) - The progress of DeepSeek reflects the rise of Chinese companies in artificial intelligence (AI), a spokesperson for China's parliament told reporters on Tuesday. Lou Qinjian, responding to a question on China's progress in AI, said what DeepSeek's young team had achieved was "commendable". "DeepSeek adheres to an open-source approach and promotes the widespread application of AI technology globally which contributes Chinese wisdom to the world," he said. "Through the rise of companies like DeepSeek, we can see the innovation and inclusiveness of China's technological development." AI startup DeepSeek has been lauded in China since it recently rattled the global tech sector by rolling out AI models that cost a fraction of those being developed by U.S. rivals such as OpenAI. While some governments such as South Korea and Italy have removed DeepSeek's chatbot from national app stores, citing privacy concerns, it has been firmly embraced in China with local governments to tech firms integrating it into their systems. The Hangzhou-based firm is accelerating the launch of the successor to January's R1 model, Reuters reported last month. Reporting by Liz Lee and Yukun Zhang; writing by Ryan Woo; Editing by Sonali Paul and Kim Coghill Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

DeepSeek's progress shows rise of China's AI companies, says Chinese official

BEIJING, March 4 (Reuters) - The progress of DeepSeek reflects the rise of Chinese companies in artificial intelligence (AI), a spokesperson for China's parliament told reporters on Tuesday. Lou Qinjian, responding to a question on China's progress in AI, said what DeepSeek's young team had achieved was "commendable". "DeepSeek adheres to an open-source approach and promotes the widespread application of AI technology globally which contributes Chinese wisdom to the world," he said. "Through the rise of companies like DeepSeek, we can see the innovation and inclusiveness of China's technological development." AI startup DeepSeek has been lauded in China since it recently rattled the global tech sector by rolling out AI models that cost a fraction of those being developed by U.S. rivals such as OpenAI. While some governments such as South Korea and Italy have removed DeepSeek's chatbot from national app stores, citing privacy concerns, it has been firmly embraced in China with local governments to tech firms integrating it into their systems. of the successor to January's R1 model, Reuters reported last month. (Reporting by Liz Lee and Yukun Zhang; writing by Ryan Woo; Editing by Sonali Paul and Kim Coghill)

DeepSeek's Progress Shows Rise of China's AI Companies, Says Chinese Official

BEIJING (Reuters) - The progress of DeepSeek reflects the rise of Chinese companies in artificial intelligence (AI), a spokesperson for China's parliament told reporters on Tuesday. Lou Qinjian, responding to a question on China's progress in AI, said what DeepSeek's young team had achieved was "commendable". "DeepSeek adheres to an open-source approach and promotes the widespread application of AI technology globally which contributes Chinese wisdom to the world," he said. "Through the rise of companies like DeepSeek, we can see the innovation and inclusiveness of China's technological development." AI startup DeepSeek has been lauded in China since it recently rattled the global tech sector by rolling out AI models that cost a fraction of those being developed by U.S. rivals such as OpenAI. While some governments such as South Korea and Italy have removed DeepSeek's chatbot from national app stores, citing privacy concerns, it has been firmly embraced in China with local governments to tech firms integrating it into their systems. The Hangzhou-based firm is accelerating the launch of the successor to January's R1 model, Reuters reported last month. (Reporting by Liz Lee and Yukun Zhang; writing by Ryan Woo; Editing by Sonali Paul and Kim Coghill)

China tech startups race to capitalise on DeepSeek fever, Xi's meeting

SHANGHAI/HONG KONG, Feb 28 (Reuters) - Chinese technology startups are racing for fresh fundraising to capitalise on the DeepSeek-induced fervor towards artificial intelligence, as well as President Xi Jinping's recent show of support to the country's private enterprises. AI-powered optics startup Rid Vision, brain-computer interface company AI CARE Medical and robot-maker Shanghai Qingbao Engine Robotics are among Chinese tech start-ups seeking fresh onshore financing, venture capitalist Andrew Qian said. "Many people are knocking at the doors of these AI companies, half discussing business cooperation, the other half talking about investment," said Qian, the CEO of New Access Capital, which has invested in the three firms. "You can see from the DeepSeek case, that a batch of Chinese innovators with disruptive technologies is emerging... Previously, Chinese start-ups were nearly all 'me too'", Qian said, referring to copycats. The flurry of roadshows and deal announcements by AI-related businesses - including chipmakers, cloud service providers and AI apps - has breathed new life into the country's moribund venture capital sector. The outlook for exits from investments by venture capital and private equity firms, however, remains clouded by a stringent regulatory vetting of IPOs at home, and heightened Sino-U.S. geopolitical tensions that threaten offshore listings. In the near-term, however, DeepSeek's AI breakthrough and this month's rare meeting between President Xi and tech business leaders have boosted investor sentiment. New Access Capital has recently invested in a chip startup and a maker of millimeter wave antenna, and is planning to invest in a company focused on rocket recovery technologies, betting on the next DeepSeek in these fields, Qian said. Companies that are seen as benefiting from China's AI advancement are the main focus of the latest round of investments. AI image generation platform LibLib AI, for example, announced several hundred million yuan in a new funding round on Monday at what the company called a "record-breaking pace of financing". AI-powered medical startup SenseCare said last week it had raised 100 million yuan, while chipmakers Aspiring and Hyseim also announced fresh fundraising recently. BLEAK PICTURE Other startups that have tapped investors in recent days include AI Infrastructure provider Siliconflow, robot-maker Ruichi Smart Technology and medtech startup Neurodome, according to consultancy Zero2IPO. The pickup in venture capital investment interest comes after bleak performance over the last few years - China venture fundraising and investments have fallen off the cliff since a 2021 peak, Preqin data showed. In 2024, 67 funds raised $12.5 billion, a far cry from 2021's $141 billion. Dollar-denominated funds raised a meagre $1 billion last year, the data showed. Venture deals totalled $229 billion last year, down 36% year-on-year and just over a quarter of 2021's $816 billion. The industry, which relies mainly on IPOs to exit from their investments, suffered from China's introduction of stringent IPO rules, and Sino-U.S. tensions that had hampered offshore listings by Chinese companies. Since the launch of DeepSeek's breakthrough AI model, "the sentiment has improved a lot," said Huo Zhongyan, founder of Bonanza Capital, which has invested in an AI-powered garment designing and marketing startup. "People get more sanguine about China's future ... Stock bullishness made entrepreneurs more confident, and investors more willing to place bets." Morgan Stanley said on Tuesday that it sees signals of normalising IPOs in the A-share market. But Huo doubts Chinese regulators will loosen IPO criteria any time soon, also cautioning that offshore listings, which have shown signs of recovery, are vulnerable to geopolitical winds and fluid market mood. Reporting by Samuel Shen and Kane Wu in Hong Kong; Editing by Sumeet Chatterjee and Lincoln Feast. Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial IntelligenceMedtech

China tech startups race to capitalise on DeepSeek fever, Xi's meeting

SHANGHAI/HONG KONG (Reuters) - Chinese technology startups are racing for fresh fundraising to capitalise on the DeepSeek-induced fervor towards artificial intelligence, as well as President Xi Jinping's recent show of support to the country's private enterprises. AI-powered optics startup Rid Vision, brain-computer interface company AI CARE Medical and robot-maker Shanghai Qingbao Engine Robotics are among Chinese tech start-ups seeking fresh onshore financing, venture capitalist Andrew Qian said. "Many people are knocking at the doors of these AI companies, half discussing business cooperation, the other half talking about investment," said Qian, the CEO of New Access Capital, which has invested in the three firms. "You can see from the DeepSeek case, that a batch of Chinese innovators with disruptive technologies is emerging... Previously, Chinese start-ups were nearly all 'me too'", Qian said, referring to copycats. The flurry of roadshows and deal announcements by AI-related businesses - including chipmakers, cloud service providers and AI apps - has breathed new life into the country's moribund venture capital sector. The outlook for exits from investments by venture capital and private equity firms, however, remains clouded by a stringent regulatory vetting of IPOs at home, and heightened Sino-U.S. geopolitical tensions that threaten offshore listings. In the near-term, however, DeepSeek's AI breakthrough and this month's rare meeting between President Xi and tech business leaders have boosted investor sentiment. New Access Capital has recently invested in a chip startup and a maker of millimeter wave antenna, and is planning to invest in a company focused on rocket recovery technologies, betting on the next DeepSeek in these fields, Qian said. Companies that are seen as benefiting from China's AI advancement are the main focus of the latest round of investments. AI image generation platform LibLib AI, for example, announced several hundred million yuan in a new funding round on Monday at what the company called a "record-breaking pace of financing". AI-powered medical startup SenseCare said last week it had raised 100 million yuan, while chipmakers Aspiring and Hyseim also announced fresh fundraising recently. BLEAK PICTURE Other startups that have tapped investors in recent days include AI Infrastructure provider Siliconflow, robot-maker Ruichi Smart Technology and medtech startup Neurodome, according to consultancy Zero2IPO. The pickup in venture capital investment interest comes after bleak performance over the last few years - China venture fundraising and investments have fallen off the cliff since a 2021 peak, Preqin data showed. In 2024, 67 funds raised $12.5 billion, a far cry from 2021's $141 billion. Dollar-denominated funds raised a meagre $1 billion last year, the data showed. Venture deals totalled $229 billion last year, down 36% year-on-year and just over a quarter of 2021's $816 billion. The industry, which relies mainly on IPOs to exit from their investments, suffered from China's introduction of stringent IPO rules, and Sino-U.S. tensions that had hampered offshore listings by Chinese companies. Since the launch of DeepSeek's breakthrough AI model, "the sentiment has improved a lot," said Huo Zhongyan, founder of Bonanza Capital, which has invested in an AI-powered garment designing and marketing startup. "People get more sanguine about China's future ... Stock bullishness made entrepreneurs more confident, and investors more willing to place bets." Morgan Stanley said on Tuesday that it sees signals of normalising IPOs in the A-share market. But Huo doubts Chinese regulators will loosen IPO criteria any time soon, also cautioning that offshore listings, which have shown signs of recovery, are vulnerable to geopolitical winds and fluid market mood. (Reporting by Samuel Shen and Kane Wu in Hong Kong; Editing by Sumeet Chatterjee and Lincoln Feast.)

DeepSeek spreads fast and wide across China with Beijing's backing

DeepSeek's advances have sparked a nationwide push in China to deploy its large language models everywhere from hospitals to local governments as Beijing seeks to consolidate its gains in generative artificial intelligence. Since the Hangzhou-based start-up shook global markets with its R1 model in late January there has been lightning adoption of its technology in its home country, with companies and state bodies throwing their weight behind the new national AI champion. All the major cloud service providers, at least six car manufacturers, several local governments, a number of hospitals and a handful of state-owned enterprises (SOEs) have moved to deploy DeepSeek, with the shift among traditionally conservative institutions particularly striking. "Even though the [Chinese Communist] Party has long been supportive of AI, DeepSeek has provided the impetus for government departments and SOEs to rollout LLMs," said an SOE tech supplier who did not wish to be named. "DeepSeek changed everything. It started a nationwide effort to push forward Chinese AI," they added. The low cost of deploying DeepSeek's models has contributed to the rapid adoption. Adina Yakefu, China AI expert at machine learning platform Hugging Face, said DeepSeek was "profoundly reshaping the landscape of the industry" after it "lowered the barriers to model development and application through its open-source strategy, knowledge distillation techniques, and cost-effective training solutions". Jilin University Hospital in the eastern city of Changchun has rolled out a diagnostic tool it claims can produce treatment plans through DeepSeek consulting the hospital's database, medical guidelines, and drug efficacy results. Jinxin Women and Children's Hospital in southwestern China said it has a tool for patients to track their ovulation cycles, with test results combined with the hospital's patient data to produce personalised fertility plans. One doctor at a public hospital in Hubei province in central China said the institution's leadership had issued a directive that DeepSeek should be used as a third-party arbiter if two doctors have differing views on a patient's treatment. There have been rollouts in public hospitals in Chengdu, Hangzhou and Wuhan for less complex applications, such as digital nurses directing patients to the right consulting room or explaining complicated medical reports. Several industry insiders cautioned against taking all the announcements at face value, as some companies were trying to capture investor enthusiasm around DeepSeek without meaningfully deploying its models. Meanwhile, government bodies are also under political pressure to be seen as aligned with China's AI darling. The SOE tech supplier said "much work still needs to be done to make these models useful" for more complex work such as medical diagnosis. "It must be trained on enough medical data to produce good results. This will take time and needs collaboration from leading AI companies. It is not something hospitals can build on their own," they said. Another doctor described a move to deploy DeepSeek last week at a hospital in eastern Zhejiang as a "publicity stunt". Even if some announcements should be treated with scepticism, experts say the willingness to test out its models still marks a step change. "The pace at which DeepSeek is spreading is incredible. Before, conservative institutions like government agencies and hospitals were nervous about introducing generative AI applications, fearing trouble if something goes wrong," said one Hangzhou-based AI engineer. Local governments, including Jinan's and Hangzhou's, have launched citizen chatbots built on DeepSeek so that residents can ask questions about everything from tax payments and rubbish collection to birth certificates. The city of Shenzhen's Futian district has launched multiple AI agents built on DeepSeek models, including a document generation tool for law enforcement officers to draft administrative reports. Beijing's public embrace of DeepSeek is fuelling the rapid adoption, with the start-up's founder, Liang Wenfeng, invited to a meeting with President Xi Jinping this month, alongside business heavyweights such as BYD chair Wang Chuanfu, Huawei founder Ren Zhengfei and Alibaba founder Jack Ma. Tencent announced it deployed DeepSeek in the search function of its ubiquitous app, WeChat. BYD and Great Wall Motor are among the automakers that have rolled out DeepSeek. Meanwhile, many SOEs, including Sinopec, PetroChina and the China Southern Power Grid, have all said they are deploying its technology. DeepSeek is not capitalising financially on its widespread usage, according to people familiar with its business model. It allows its models to be downloaded for free and they can be run on public cloud or private servers, making providers such as AliCloud and Huawei Cloud the prime beneficiaries of the recent surge in uptake. HSBC tech hardware analyst Frank He wrote in an analyst note that DeepSeek "AI inferencing workloads have been surging, triggered by the growing popularity of DeepSeek R1 in recent weeks". He predicted demand would continue and "trigger related hardware and software upgrades in cloud computing and AI infrastructure".

DeepSeek AI: Full List of Companies Integrating China's Rising AI Model

In addition to its success within China's private enterprises, DeepSeek has received significant backing from state-owned companies and city governments. Credit: Kevin Frayer / Stringer via Getty Images. China's AI landscape is witnessing a sweeping shift as DeepSeek, a disruptive open-source AI startup, has rapidly infiltrated the country's industries, ranging from automotive to consumer electronics. DeepSeek's competitive pricing and high efficiency have made it an attractive alternative for businesses looking for cutting-edge AI. This rapid adoption, backed by government support, signals a potential redefinition of AI dominance in China -- and perhaps beyond. On Feb. 16, Tencent said it was testing the integration of DeepSeek on WeChat, the company's massively popular web chat app. Tencent's DeepSeek test allows users to access the model through an "AI Search" bar. The Tencent representative said users can access the full version of the DeepSeek-R1 model for free to enjoy a "more diverse search experience." The test is currently available on WeChat, the overseas version of the application. BYD Chinese electric vehicle giant BYD has partnered with DeepSeek to integrate the AI startup's models into its self-driving technology. The Tesla rival said DeepSeek would be deployed into some of its self-driving systems. BYD announced it was rolling out "God's Eye," an advanced self-driving system in all its cars. Wang Chuanfu, BYD founder, said the company wanted to make autonomous driving less of a luxury and more of a regular safety feature. Huawei Huawei Technologies quickly deployed DeepSeek's AI models into its cloud-computing platform following the startup's success. DeepSeek's large language model V3 and reasoning model R1 are now available to end users through Huawei's Ascend cloud service. The Chinese tech giant partnered with AI infrastructure start-up SiliconFlow to bring DeepSeek's models to the platform. Huawei claims its platform allows the models to run as smoothly as on premium global GPUs. Lenovo Lenovo, the world's largest PC maker, announced that it will introduce many DeepSeek AI models into its hardware product line. Lenovo chairman Yang Yuanqing claimed that DeepSeek was set to have a major impact across the industry. "With new large language models that have high inference efficiency and low expenses, anyone will be able to access AI," he said. Lenovo's integration of DeepSeek has already helped the company, with its stock price soaring over 40% in just a month. Haier Group Chinese home appliance and consumer electronics firm Haier recently announced it had successfully integrated DeepSeek into its three intelligent models. The firm also launched the National High-end Intelligent Home Appliance Innovation Center, which aims to boost the AI power of the home appliance industry. Haier said integrating DeepSeek into its models provides enterprises with private AI deployment solutions with efficient performance and top-tier security. Baidu YY Live, a live streaming service owned by Chinese internet search giant Baidu, recently launched a DeepSeek-powered chatbot named YYDS. Baidu said the chatbot utilized DeepSeek's V3 foundation model and its R1 reasoning model for both mobile and desktop. Hisense Hisense, a Chinese TV and consumer electronics manufacturer, has deployed DeepSeek's models into its own Xinghai AI model. The TV manufacturer's AI model, Xinghai, focuses on visual generation, multimodal understanding, and language. The company has now deployed DeepSeek into its popular TV range, allowing users to access the feature through voice commands. Hisense's combination of Xinghai and DeepSeek has enhanced the AI's deep thinking and reasoning capabilities, AIBase reported. Alibaba On Feb. 10, Alibaba's cloud computing division began offering clients access to six new DeepSeek models through its large language model service platform, Bailian. Following the integration, Alibaba's share price gained 5.5%. However, Alibaba denied rumors it was investing in DeepSeek, which shares a Hangzhou headquarters. DeepSeek Makes History With Government Backing In addition to its success within China's private enterprises, DeepSeek has received significant backing from state-owned companies and city governments. According to the Financial Times , the AI startup is currently being used by at least 10 state-owned energy companies and 13 city governments. In addition, the AI startup has reportedly entered several public hospitals nationwide. An unnamed Chinese AI engineer told the FT that "the pace at which DeepSeek is spreading is incredible." "Before, conservative institutions like government agencies and hospitals were nervous about introducing generative AI applications, fearing trouble if something goes wrong," they added. Local governments, such as Jinan and Hangzhou, have deployed DeepSeek-powered chatbots to answer residents' queries and provide information on community events and rubbish collections. Government staff are also reportedly utilizing DeepSeek's AI models to boost the efficiency of administrative and operational functions.

China's DeepSeek frenzy enters the home as TV, vacuum cleaner makers adopt its AI models

BEIJING, Feb 26 (Reuters) - China's joyful embrace of DeepSeek has gone one step deeper - extending to TVs, fridges and robot vacuum cleaners with a slew of home appliance brands announcing that their products will feature the startup's artificial intelligence models. Hangzhou-based DeepSeek's large language models upended the AI sector this year, rivalling Western systems in performance but at a much lower cost. That's resulted in much pride and glee in China, with DeepSeek held up as proof that U.S. efforts to contain tech advances in China will ultimately fail. DeepSeek's founder Liang Wenfeng has been feted by Chinese authorities, and the company plans to release R2, the successor to its R1 reasoning model, soon, sources have said. Over the past two weeks, home appliance manufacturers such as Haier (600690.SS), opens new tab, Hisense (000921.SZ), opens new tab and TCL Electronics (1070.HK), opens new tab have joined automakers and tech heavyweights like Huawei and Tencent (0700.HK), opens new tab in saying they will be using DeepSeek's models. Many of these home goods are already smart devices that respond to voice-activated commands. But DeepSeek's models will allow for far greater precision. Liu Xingliang, a Beijing-based independent industry analyst, said that a robotic vacuum cleaner, could, for example, leverage the semantic parsing capabilities of DeepSeek-R1 to position itself and avoid obstacles with more speed and sophistication. "The device will be able to comprehend complex instructions such as 'Gently wax the wooden floor in the master bedroom but avoid the Legos'," said Liu. Reporting by Sophie Yu and Brenda Goh; Editing by Edwina Gibbs Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Disrupted

DeepSeek is now a global force. But it's just one player in China's booming AI industry

When small Chinese artificial intelligence (AI) company DeepSeek released a family of extremely efficient and highly competitive AI models last month, it rocked the global tech community. The release revealed China's growing technological prowess. It also showcased a distinctly Chinese approach to AI advancement. This approach is characterised by strategic investment, efficient innovation and careful regulatory oversight. And it's evident throughout China's broader AI landscape, of which DeepSeek is just one player. In fact, the country has a vast ecosystem of AI companies. They may not be globally recognisable names like other AI companies such as DeepSeek, OpenAI and Anthropic. But each has carved out their own speciality and is contributing to the development of this rapidly evolving technology. Tech giants and startups The giants of China's technology industry include Baidu, Alibaba and Tencent. All these companies are investing heavily in AI development. Alibaba CEO Eddie Wu earlier this month said the multibillion dollar company plans to "aggressively invest" in its pursuit of developing AI that is equal to, or more advanced than, human intelligence. The company is already working with Apple to incorporate its existing AI models into Chinese iPhones. (Outside China, iPhones offer similar integration with OpenAI's ChatGPT.) But a new generation of smaller, specialised AI companies has also emerged. For example, Shanghai-listed Cambricon Technologies focuses on AI chip development. Yitu Technology specialises in healthcare and smart city applications. Megvii Technology and CloudWalk Technology have carved out niches in image recognition and computer vision, while iFLYTEK creates voice recognition technology. Innovative paths to success Despite United States' chip sanctions and China's restricted information environment, these Chinese AI companies have found paths to success. US companies such as OpenAI have trained their large language models on the open internet. But Chinese companies have used vast datasets from domestic platforms such as WeChat, Weibo and Zhihu. They also use government-authorised data sources. Many Chinese AI companies also embrace open-source development. This means they publish detailed technical papers and release their models for others to build upon. This approach focuses on efficiency and practical application rather than raw computing power. The result is a distinctly Chinese approach to AI. Importantly, China's state support for AI development has also been substantial. Besides the central government, local and provincial governments have provided massive funding through venture funds, subsidies and tax incentives. China has also established at least 48 data exchanges across different cities in recent years. These are authorised marketplaces where AI companies can purchase massive datasets in a regulated environment. By 2028, China also plans to establish more than 100 "trusted data spaces". These are secure, regulated environments designed to standardise data exchanges across sectors and regions. They will form the foundation of a comprehensive national data market, allowing access to and use of diverse datasets within a controlled framework. A strong education push The growth of the AI industry in China is also tied to a strong AI education push. In 2018, China's Ministry of Education launched an action plan for accelerating AI innovation in universities. Publicly available data shows 535 universities have established AI undergraduate majors and some 43 specialised AI schools and research institutes have also been created since 2017. (In comparison, there are at least 14 colleges and universities in the United States offering formal AI undergraduate degrees.) Together, these institutions are building an AI talent pipeline in China. This is crucial to Beijing's ambition of becoming a global AI innovation leader by 2030. China's AI strategy combines extensive state support with targeted regulation. Rather than imposing blanket controls, regulators have developed a targeted approach to managing AI risks. The 2023 regulations on generative AI are particularly revealing of Beijing's approach. They impose content-related obligations specifically on public-facing generative AI services, such as ensuring all content created and services provided are lawful, uphold core socialist values and respect intellectual property rights. These obligations, however, exclude generative AI used for enterprise, research and development. This allows for some unrestricted innovation. International players China and the US dominate the global AI landscape. But several significant players are emerging elsewhere. For example, France's Mistral AI has raised over €1 billion (A$1.6 billion) to date to build large language models. In comparison, OpenAI raised US$6.6 billion (A$9.4 billion) in a recent funding round, and is in talks to raise a further US$40 billion. Other European companies are focused on specialised applications, specific industries or regional markets. For example, Germany's Aleph Alpha offers an AI tool that allows companies to customise third-party models for their own purposes In the United Kingdom, Graphcore is manufacturing AI chips and Wayve is making autonomous driving AI systems. Challenging conventional wisdom DeepSeek's breakthrough last month demonstrated massive computing infrastructure and multibillion dollar budgets aren't always necessary for the successful development of AI. For those invested in the technology's future, companies that achieve DeepSeek-level efficiencies could significantly influence the trajectory of AI development. We may see a global landscape where innovative AI companies elsewhere can achieve breakthroughs, while still operating within ecosystems dominated by American and Chinese advantages in talent, data and investment. The future of AI may not be determined solely by who leads the race. Instead, it may be determined by how different approaches shape the technology's development. China's model offers important lessons for other countries seeking to build their AI capabilities while managing certain risks.

DeepSeek R2 is coming fast: Can the West keep up?

DeepSeek is set to accelerate the launch of its new AI model, R2, following the success of its previous model, R1, which recently prompted a $1 trillion sell-off in global equities markets due to its competitive performance against Western counterparts. The Hangzhou-based startup originally aimed to release R2 in early May but is now pushing for an expedited rollout, according to three sources familiar with the company. The new model is expected to enhance coding capabilities and support reasoning in multiple languages beyond English. DeepSeek has not commented on these developments. R1, developed using less powerful Nvidia chips, remains competitive with models created by major U.S. tech firms that have invested hundreds of billions in AI technologies. Vijayasimha Alilughatta, COO of Zensar, stated that the release of R2 could significantly impact the AI industry, challenging the dominance of existing market leaders. Liang Wenfeng, founder of DeepSeek and a billionaire from his quantitative hedge fund High-Flyer, has kept a low profile since July 2024. Former employees describe DeepSeek as operating more like a research lab than a conventional business, characterized by a flat management style that contrasts with the hierarchical structure common in China's tech sector. Liang, who began his career in smart imaging and later managed a research team, was praised for hiring top algorithm engineers and fostering a collaborative environment. Employees noted that many worked eight-hour days, feeling empowered to contribute to key projects. Liang emphasizes quality over extensive app development, having commented on avoiding heavy spending in favor of refining AI models. Compensation at DeepSeek and High-Flyer is reportedly generous; senior data scientists at High-Flyer can earn up to 1.5 million yuan annually, significantly higher than competitors. High-Flyer itself is recognized as one of China's top quant funds, managing tens of billions of yuan despite regulatory pressures on the sector. DeepSeek rocked the market once and here's why it could happen again DeepSeek's competitive edge stems from High-Flyer's significant investments in research and computing power. The firm allocated 70% of its revenue towards AI research, building two supercomputing AI clusters, including one consisting of 10,000 Nvidia A100 chips during 2020 and 2021. The Chinese government initially raised concerns about the massive chip acquisition but ultimately allowed operations to proceed, which later benefited DeepSeek when the U.S. banned A100 chip exports to China in 2022. With limited competition for such resources, DeepSeek has attracted leading researchers. The application of cost-effective techniques, such as Mixture-of-Experts (MoE) and multihead latent attention (MLA), has enabled the company to lower computing costs while remaining competitive. DeepSeek's pricing is estimated to be 20 to 40 times cheaper than similar models from OpenAI, according to Bernstein analysts. Since the introduction of R1, Western tech giants have adjusted their strategies, reflected in price cuts from OpenAI and the introduction of discounted access tiers by Google. Benchmark testing from UST noted that R1 often required three times the tokens for reasoning compared to OpenAI's scaled-down models. DeepSeek has gained favor with the Chinese government, as evidenced by Liang attending a high-profile meeting with Premier Li Qiang as a representative of the AI sector. Local governments and several state-owned enterprises have begun integrating DeepSeek's models, indicating a strong endorsement from Chinese leadership, which aims to demonstrate superiority over U.S. technology. This rise comes at a time when DeepSeek's models face removal from app stores in some countries, including South Korea and Italy, due to privacy concerns. Experts warn that if DeepSeek becomes the preferred AI model for Chinese state entities, Western regulators may respond with heightened restrictions on AI technology exports and collaborations. Liang has acknowledged the challenges posed by the embargo on advanced AI chips, emphasizing funding has not been the primary issue for DeepSeek.

DeepSeek Rushes to Launch new AI Model as China Goes All in

The new model from DeepSeek will be called R2, and could worry the U.S. government. Here's why. The Chinese startup triggered a $1 trillion-plus sell-off in global equities markets last month with a cut-price AI reasoning model that outperformed many Western competitors. Now, the Hangzhou-based firm is accelerating the launch of the successor to January's R1 model, according to three people familiar with the company. Deepseek had planned to release R2 in early May but now wants it out as early as possible, two of them said, without providing specifics.

DeepSeek rushes to launch new AI model as China goes all in

The Chinese startup triggered a $1 trillion-plus sell-off in global equities markets last month with a cut-price AI reasoning model that outperformed many Western competitors. Now, the Hangzhou-based firm is accelerating the launch of the successor to January's R1 model, according to three people familiar with the company. Deepseek had planned to release R2 in early May but now wants it out as early as possible, two of them said, without providing specifics. The company says it hopes the new model will produce better coding and be able to reason in languages beyond English. Details of the accelerated timeline for R2's release have not been previously reported.