In This Article:
DeepSeek, until recently a little-known Chinese AI startup, shook up the U.S. tech industry over the weekend when it unveiled a cutting-edge large-language AI model that could compete with the big guns like OpenAI, but at a fraction of OpenAI’s budget.
The tech-heavy Nasdaq dropped 3% Monday, and AI chipmaker Nvidia alone lost almost $600 billion as DeepSeek’s cheaper and similarly capable model led investors to question the amount of capital that has been poured into AI development.
But DeepSeek isn’t the only Chinese tech firm to release an AI model in recent weeks, as a slew of Chinese AI players have been rolling out updates ahead of the Lunar New Year on Wednesday, when the country traditionally takes at least a weeklong break. But while it could be a case of companies releasing their best work ahead of a holiday, analysts think the flurry of activity is something quite different—that is, “coordinated psyops to counter U.S. announcements from the past week.”
That U.S. announcement was Trump’s presentation of a $500 billion project called Stargate that’s aimed at building AI infrastructure in the U.S.—an announcement that comes on the heels of months of AI chip export bans announced under former President Joe Biden.
“Necessity is the mother of invention, so the chip export control bans may have caused this challenge,” said Ray Wang, principal analyst and CEO at the Silicon Valley–based tech research and advisory firm Constellation Research.
“This is obviously a psyops. You can’t get to AGI [artificial general intelligence] this way. It’s reverse engineering for efficiency,” Wang added, in reference to DeepSeek’s role as a low-budget competitor to the likes of OpenAI. According to Wang, despite all the buzz around DeepSeek, AI models will keep getting more demanding and complex over time, which will require large amounts of expensive computing power.
Another analyst, at IDC, a market intelligence firm, holds a similar view and thinks China wants to show that it is still a force to be reckoned with when it comes to tech.
“It’s hard to say if they timed it for Chinese New Year, however with the new presidency in the U.S. and the announcement of huge AI investments developing AI infrastructure through Stargate, et cetera, there is a need for China to reinforce its position in the global tech industry,” said Deepika Giri, head of AI research at IDC APAC.
Recently released Chinese AI models:
MiniMax
This Chinese startup launched a new series of open-source models two weeks ago under the name MiniMax-01. That family includes a general purpose foundational model, the MiniMax-Text-01, and the visual multimodal model MiniMax-VL-01.