DeepSeek is revolutionizing not only OpenAI, but also Chinese tech giants

DeepSeek is revolutionizing not only OpenAI, but also Chinese tech giants

DeepSeek, an innovative Hong Kong company, has created excitement in the global stock market scene and among artificial intelligence players. Now its influence is spreading rapidly across China, as some of the country's largest technology companies, which had previously developed their own chatbots, are working diligently to integrate the open source model into their services.

Technological advances and strategic partnerships

In early February, telecommunications giant Huawei announced that it would run DeepSeek on its own hardware, consisting of domestically manufactured Ascend processors. This move is seen by many experts as a turning point because it shows that powerful models like DeepSeek no longer rely on Nvidia's most powerful chips.

Analysts at Bernstein, a research and investment firm, emphasized in a research report that "this partnership challenges U.S. sanctions by proving that China can achieve globally competitive performance in artificial intelligence with domestically developed hardware and software, replacing Nvidia chips with Ascend chips."

US export controls and their effects

Starting in late 2022, the Biden administration imposed multiple rounds of export controls on China to deprive technology that could potentially be used to develop new weapons systems and AI applications. But the success of DeepSeek's latest R1 AI model, which was reportedly trained at a fraction of the cost of established products like ChatGPT, challenges the assumption that withdrawing access to advanced chips could effectively hinder China's progress.

Meanwhile, leading Chinese AI chipmakers such as Moore Threads and Tencent-backed Enflame have announced their support for DeepSeek and will run the AI ​​model on their own computing chips.

Integration into cloud services

In addition to chipmakers, the cloud services of major Chinese technology companies such as Alibaba, Tencent, Baidu and Bytedance (TikTok's parent company) have also started integrating DeepSeek technology into their offerings. These companies have made DeepSeek services available through their cloud platforms, as have the country's three largest telecommunications providers, as well as Lenovo and Geely.

Lian Jye Su, principal analyst at Omdia, a technology research firm, notes: "This is a recognition for companies with open source models. If your model is good, AI giants will integrate it into their platforms." Despite the gambles that rival products have spawned, major Chinese tech companies have embraced DeepSeek to attract more users and businesses to their platforms.

The successful rise of DeepSeek

DeepSeek, a Hangzhou-based startup founded in 2023, caused a global stir last month when it launched its latest AI model. The accompanying AI assistant app quickly climbed the global download charts, overtaking ChatGPT as early as the end of January. According to state media, the daily user count has reached more than 22 million in just 20 days.

DeepSeek's success has catapulted its founder, Liang Wenfeng, into the ranks of national heroes. However, despite the optimism, analysts warn that bottlenecks in the development of Chinese AI chips remain due to US export restrictions. Linghao Bao, senior analyst at Trivium China, explains: "Porting the DeepSeek models to different chip architectures requires a lot of low-level software work. The fact that this could be done quickly is remarkable, but does not solve the chip shortage problem."

International concerns and regulations

DeepSeek's rapid expansion has also attracted international attention. Last week, Taiwan and Australia banned their government officials from using the Chinese AI service due to data security concerns. Some South Korean ministries and government agencies have also issued similar bans. Italy also imposed a blanket ban on the DeepSeek app last month after the company failed to address privacy concerns raised by authorities. More and more countries are now expressing doubts about the company's data practices.