China Narrows AI Gap with US
China has significantly narrowed the AI gap with the US, reducing it to just three months in some areas, according to Lee Kai-fu, CEO of Chinese startup 01.AI. This progress has been driven by firms like DeepSeek, which have found ways to optimise chip usage and enhance algorithm efficiency.
Lee, a respected figure in AI and former head of Google China, highlighted that DeepSeek’s advancements in infrastructure software engineering have propelled China forward. The startup made headlines in January by unveiling an AI reasoning model that was trained on less advanced chips at a lower cost than Western competitors. This breakthrough challenged the belief that US sanctions were stalling China’s AI sector.
Overcoming US Sanctions Through Innovation
Previously, China lagged six to nine months behind the US in AI development, Lee stated. However, recent innovations have reduced this gap to just three months in core technologies. In some areas, such as reinforcement learning and software engineering, Chinese companies may now be leading.
Washington’s semiconductor sanctions initially created difficulties for Chinese firms, but they also pushed them to innovate under constraints. Companies like DeepSeek have found new ways to enhance AI reasoning models. Their approach, which allows models to show their thought process before delivering answers, mirrors OpenAI’s work but has been directly implemented for users.
China’s AI Startups Enter the Global Race
China’s AI sector surged into competition following OpenAI’s launch of ChatGPT in late 2022. While many Chinese tech leaders initially admitted to being behind their Western counterparts, DeepSeek’s success has changed that perception.
Lee founded 01.AI in March 2023, joining other AI startups such as ZhipuAI and Moonshot, alongside tech giants like Baidu, Alibaba, and ByteDance, in developing foundational models. However, he noted that investing in proprietary models is now a challenge, as major tech firms and open-source alternatives dominate the market.
Instead, 01.AI is focusing on practical AI applications. The company recently launched Wanzhi, a platform designed to help enterprises integrate AI into their operations. Lee revealed that 01.AI has already started generating revenue and expects significant growth in 2025, surpassing the $15 million earned last year.
With inputs from Reuters