Explained: How Deepseek is Pushing China's AI Start-Ups to Rapidly Fight Back
- THE CHINA NOW
- Mar 7
- 3 min read
Summary
DeepSeek, a Chinese AI startup, has disrupted the AI market with its low-cost models that outperform global competitors like OpenAI and Meta.
Chinese AI startups, including Moonshot AI and MiniMax, are responding by releasing open-source models and seeking fresh funding to remain competitive.
DeepSeek’s models have raised questions about the economic viability of traditional AI firms due to their affordability and efficiency.
In a remarkable shift in the AI landscape, DeepSeek, a Chinese AI startup based in Hangzhou, has made waves by releasing highly efficient, low-cost models that have outperformed industry leaders such as OpenAI and Meta. Initially, DeepSeek’s V2 model triggered a price war in China’s AI sector, but its V3 model and the R1 model, released in 2025, have raised existential questions for many players in the AI market. Despite its low-cost approach, DeepSeek’s models are seen as technically superior, positioning the startup as a formidable competitor in global AI development.
