China Narrows AI Development Gap with the US
China has significantly reduced the artificial intelligence (AI) development gap with the United States, now just three months behind in some areas. This is largely due to firms like DeepSeek, which have become more efficient in using chips and applying algorithms, according to Lee Kai-fu, the CEO of Chinese startup 01.AI. Lee, a former head of Google China, noted that DeepSeek’s work in infrastructure software engineering has helped China catch up.
DeepSeek's Breakthrough in AI Reasoning Models
DeepSeek made waves in the global AI industry in January when it introduced an AI reasoning model. The model was trained using less advanced chips and was cheaper to develop than its Western counterparts. This move challenged the belief that US. sanctions were hindering China’s AI progress. Lee highlighted that, historically, China was six to nine months behind in AI development, but now the gap is shrinking, with China even ahead in certain areas.
Innovation Under Sanctions
Lee explained that Washington's semiconductor sanctions had forced Chinese companies to innovate and become more resourceful. These sanctions created short-term challenges, but they also pushed Chinese firms to develop new algorithms and models. Specifically, DeepSeek’s use of reinforcement learning and its ability to show users its reasoning process before delivering answers has caught up with US. innovation. This ability, first introduced by OpenAI, had not been released to users before DeepSeek's announcement, signaling potential innovation in China's approach to AI.
Also read: Chinese Startup Unveils Manus AI
China's AI Startups: The Shift Toward Practical Applications
Ever since the launch of ChatGPT in 2022, China’s tech sector has entered the global AI race. However, in the beginning, many belived that China lagged behind the US. Initially, it seemed true but it all changed when DeepSeek was launched.
Now, Chinese tech leaders are claiming that they are now closer to matching the advancements of the west. 01.AI, founded by Lee in March 2023, is among the emerging AI startups that, along with tech giants like Baidu, Alibaba, and ByteDance, are working on foundational models.
Instead of competing with the large tech giants, 01.AI focuses on practical AI applications. The company recently launched Wanzhi, a software platform aimed at helping enterprises deploy AI technology more efficiently. Lee also noted that 01.AI is already generating revenue, projecting significant growth in 2025, with expectations to multiply its $15 million revenue from the previous year.
