What will it take for China to produce the next DeepSeek-style disrupter?

China is likely to produce more ‘technological surprises’, but an open innovation ecosystem is critical for gaining AI edge, analysts say

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Chinese AI firm DeepSeek has topped the free download charts in app stores in both China and the US. Photo: AFP

Published: 10:00pm, 28 Jan 2025

In the wake of DeepSeek’s stunning success, observers said China was likely to produce more hi-tech “surprises”, but maintaining an open innovation ecosystem would be critical for the country to gain an edge in its AI competition with the US.

The rise of tech start-up DeepSeek and its powerful, low-cost artificial intelligence model has put China in a strong position in its AI rivalry with the US, raising questions about the effectiveness of Washington’s “small yard, high fence” strategy to contain China’s technological progress, according to analysts.

It has also fuelled calls in the US for tighter controls to keep China from accessing American tech products.

On Monday, US President Donald Trump said DeepSeek served as a “wake-up call” for American companies, and US lawmakers called on the new administration to impose stricter export curbs to keep China from achieving further gains in AI.

Zhao Minghao, deputy director at the Centre for American Studies at Fudan University in Shanghai, said China could produce more “technological surprises”, not just in AI but across many fields.

“Facing increasing pressure in the tech war, China has increased its technological investments significantly, and the coming period may see these investments starting to yield more tangible results,” he said.