On January 27, a technology news story emerged from China two days before the Spring Festival: DeepSeek, a Chinese-developed artificial intelligence (AI) product, had surpassed American company OpenAI's ChatGPT in free downloads on the Apple App Store in the U.S., leading to a sharp decline in several U.S. technology stocks. President Donald Trump described DeepSeek as a "wakeup call" for U.S. industries amid the global AI race.

But why has DeepSeek generated such concern in the United States, even triggering panic in the stock market?

The global market response indicates that DeepSeek's rapid rise can be attributed to several key factors: its superior performance on essential tasks, a fully open-source strategy that lowers industry entry barriers and allows programmers worldwide to use and improve the system, and considerably lower costs compared to similar models.

Globally, the United States has identified China as its primary competitor in the field of AI. Both the previous Joe Biden administration and the current Trump administration have implemented several supportive policies to strengthen the U.S. position in this area. On January 21, Trump announced a new $500-billion Stargate AI infrastructure initiative to secure "the future of technology" in the United States.

The success of DeepSeek appears to have unsettled U.S. officials. As stock prices for American AI companies were plummeting at the time of writing, DeepSeek also faced extensive cyberattacks.

The United States should not panic about DeepSeek. While smart technology is often referred to as the Fourth Industrial Revolution, it is ultimately a form of technological advancement designed to address the diverse needs of human society. This can be illustrated by the differing development models of AI in China and the United States.

From a tech perspective, DeepSeek employs a mixture-of-expert model, a machine-learning architecture that leverages the idea of having multiple expert models to improve performance and efficiency—particularly in large-scale tasks, while U.S. AI firms like OpenAI and Meta typically rely on traditional dense models. The main advantage of DeepSeek lies in its ability to reduce costs for users. However, despite its higher costs, OpenAI continues to lead in performance.

From a market and application perspective, DeepSeek targets small and medium-sized enterprises and developers through cost-effective and inclusive strategies.

DeepSeek's optimization for understanding the Chinese language and cultural context makes it particularly well-suited for the Chinese market. In contrast, U.S. AI firms tend to focus on high-end markets and large businesses, offering customized solutions.

For instance, OpenAI's ChatGPT is trained on a diverse global dataset with a strong emphasis on the English language and Western cultural contexts. As a result, it is widely used across various fields, including general tasks, creative writing and coding.

In terms of global influence, the success of DeepSeek may encourage OpenAI and other U.S. AI providers to lower their prices in order to maintain their competitive edge. However, in light of DeepSeek's strong momentum, U.S. technology giants are likely to rise to the challenge, which will ultimately benefit the U.S. AI industry.

The advancement of AI in both China and the U.S. will help humanity as a whole. In the future, AI technology is expected to be widely implemented across different sectors, including education, healthcare, manufacturing, agriculture and services, lifting production efficiency and improving quality of life.

Throughout this process, any cooperation in AI between the two countries will be welcomed, as it can promote collaborative innovation in areas such as algorithms, data and computing power. Additionally, such cooperation can facilitate China-U.S. teamwork in developing AI technology standards and ethical guidelines, providing more insights for global AI governance.

Copyedited by Elsbeth van Paridon

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