Image courtesy of WeeTech Solution, edited by: Sarah M. ‘27
The AI Arms Race: China’s Deepseek and the American AI Industry
By: Eileen W. ‘28
By early 2023, after the advent of ChatGPT, most people had become aware of AI. Generative AI has become entrenched in daily life, with all major tech companies developing and embedding their own AI in browsers: Google has Gemini, Microsoft has Copilot, etc.
With the popularization of AI, the term “AI arms race” has been thrown around. At first, the term was used to describe the competition between tech companies such as Google and Microsoft. In February 2023, Microsoft CEO Satya Nadella said at a special in Microsoft’s headquarters, “A race starts today,” referring to Google’s earlier declaration of a “code red” and rush to create their own chatbot, Bard, which is now known as Gemini
However, the term “AI arms race” — which inherently carries parallels to the twentieth-century nuclear arms race between America and the USSR — is now being used to describe the United States’ competition with China, in the lens that the two countries may go to war over Taiwan.
The United States originally had the “lead” in the AI arms race, making breakthroughs in neural network design and developing Large Language Models (LLMs), which are the basis for generative AI. On the other hand, China has made far less waves in the AI market — until this January, when Chinese artificial intelligence company DeepSeek unveiled its latest model, DeepSeek R1, which is said to rival ChatGPT’s technology while being far cheaper and using less computing power.
The U.S. has long withheld access to advanced semiconductor technology from China, but now China has created an AI on par with that of the United States, even with less advanced hardware. China has “proven that cutting-edge AI models can be developed with limited computing resources,” says Wei Sun, principal AI analyst at Counterpoint Research, in an interview with BBC. This is what caused American multinational technology company Nvidia’s stock crash in January, where the stock dropped by 17% and the company lost nearly $600 billion
The United States and China have different philosophies regarding the development of artificial intelligence technology. America’s AI industry is capital driven: small companies will be purchased by larger companies after they gain traction in the market. For instance, the originally non-profit Open AI is now a for-profit and a R&D affiliate of Microsoft. According to Forbes, in 2022 and 2023, venture capitalists and corporate investors poured $100 billion into AI private companies. Though this pace has slowed now, the large investment allowed the United States to attract talents and fund the raw computing power necessary for running AI models.
Unlike in America where the government does not play much of a role in the development of AI, progress in AI technology in China is state-driven. The government collaborates extensively with private companies, working towards the goals, such as to “[grasp] the global development trend of AI,” described in the “New Generation Artificial Intelligence Development Plan,” which was initiated in 2017.
DeepSeek, the catalyst of the renewed conversation about the “AI arms race,” is a free chatbot with similar functions to ChatGPT. While its capabilities are reportedly as powerful as OpenAI’s o1 model in tasks such as mathematics, DeepSeek has been trained to avoid politically sensitive questions. For instance, when BBC asked the AI what happened at Tiananmen Square on June 4th, 1989, DeepSeek did not provide any details about the event, a massacre that is subject to Chinese government censorship.
Although China and the United States are viewed as competitors in the world of AI development, others are concerned that competition is not the right approach for the future. Alvin Wang Graylin and Paul Triolo of the MIT Technology Review advocate for a more international, collaborative approach to AI. “AI competition is not a zero-sum game,” they write. “A cooperative framework would help ensure that AI development is conducted responsibly and inclusively.”
Whether or not collaboration between countries for AI development can be achieved, AI technology will continue to progress and become more entrenched in daily life. As users of AI, it is worth considering what role AI should play in the world and what this country’s relationship with artificial intelligence technology should look like.
Sources