The Emergence of DeepSeek and Its Implications for Global AI Competition

The rise of DeepSeek, a new AI startup from China, has drawn significant attention and raised questions about the state of AI development not only in China but also in countries like Korea. Founded in May 2023 in Hangzhou, DeepSeek made headlines recently with the launch of its open-source AI model, DeepSeek-R1, which is celebrated for its impressive performance and low cost. Some analysts have even claimed that its performance in certain tests has surpassed that of OpenAI's ChatGPT.

DeepSeek's mobile AI chatbot has reached the top spot in downloads on the Apple App Store in the U.S., which has astonished many within the tech community. Beyond its performance metrics, what stands out is DeepSeek's ability to navigate U.S. semiconductor and AI technology restrictions, raising concerns regarding the effectiveness of these regulatory measures aimed at hindering China's technological progress.

Liang Wenfeng, the founder of DeepSeek, is a notable figure in this story. At 40 years old, he is a product of the Chinese education system, having studied computer science at Zhejiang University. In 2015, he co-founded a hedge fund based on deep-learning AI techniques, which has since seen substantial success, accumulating nearly $8 billion in assets. This track record serves as a testament to the strength of China's startup environment and its growing capacity to replicate successful business stories akin to Silicon Valley.

The quick rise of DeepSeek was felt even in the U.S. financial markets, leading to a significant decrease in share prices of Nvidia, a major supplier of AI-focused GPUs, with share values dropping up to 17.7 percent following news of DeepSeek's advancements.

As the debate over technology transfer and data security continues, DeepSeek's emergence marks a significant shift in the global AI landscape. Currently, the competition in AI can be viewed as largely a contest between the United States and China. Korea, while ranking between sixth and seventh globally in AI development, faces challenges in catching up, particularly regarding our computing power and data resources.

DeepSeek’s rapid rise should be a signal for Korea, showcasing both a challenge and an opportunity. Reports indicate that DeepSeek has built a GPU infrastructure comparable to that of South Korea as a whole. Meanwhile, it appears that major firms like Samsung Electronics are investing only a fraction of what DeepSeek dedicates to their AI initiatives. It is essential for Korea to bolster its investments significantly to remain competitive in this fast-evolving field.

Fortunately, the price of AI hardware, especially GPUs, is declining rapidly. With costs dropping to about one-tenth of their previous levels every year, there is a window of opportunity for Korean companies to step up their efforts. In 2023, the Korean government recognized AI as critical for future growth, alongside fields like biotechnology and quantum computing. Steps have been made, including the establishment of a National AI Committee and the passage of comprehensive AI framework legislation.

However, domestic political instability, particularly due to ongoing impeachment proceedings, has left many of these initiatives uncertain. It is crucial for Korea’s political leaders to acknowledge the urgency of the situation, and for corporations to make bold investments in AI technologies now more than ever.

AI, DeepSeek, Competition