The AI war begins

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In 2023, OpenAI CEO Sam Altman was on a visit to India. In one of his interactions, the ChatGPT boss was asked: was it possible to build an AI model with $10 million investment? His answer was pretty straightforward: "Next to impossible." He then went on to boast about the US high-tech prowess by saying that China cannot compete.

The same year, a 38-year-old engineer in China established a startup, called DeepSeek. The Chinese company with 140 fresh university graduates worked on an AI tool, with the outside world having little idea that it would give the US tech giants a run for money. On 10 January, DeepSeek unveiled its AI model RI costing just $5.6 million. Within days, DeepSeek has become the most downloaded free application in the US. Investors were surprised how the low-cost, open-source generative AI tool was able to compete with leading AI apps such as OpenAI's ChatGPT. It shook Silicon Valley and Wall Street. President Donald Trump conceded that it was a "wake-up call" for the US. Nvidia, the maker of high-end chips used in AI tools, lost a sixth of its market capitalisation, worth a whopping $600 billion. For comparison, Pakistan's GDP size is around $375 billion. Other tech giants, such as Meta and Google, lost their market value too with people dumping their shares in panic.

How did a small startup with a handful of young graduates achieve that milestone? The man behind this miracle is Liang Wenfang who pursued his higher education at Zhejiang University, one of China's premier science and tech institutions. There, he obtained a Bachelor's of Engineering in Electronic Information Engineering followed by a Master's of Engineering in Information and Communication Engineering. His focus included research on target tracking algorithms, which hinted at his early interest in applying technology to solve complex problems. When he started working on AI projects, he was not taken seriously and some people even laughed at him and his ventures. But the man is now being revered as a hero in China. People are calling him a legend. This is not the first time any Chinese company has ventured into AI. There have been attempts previously, but they failed so miserably that even Chinese termed them as cheap copies of US chatbots. But DeepSeek has come up with something that many American experts admit involves cutting-edge technology, with its AI model better than ChatGpt in some cases. The development has far-reaching implications not just in the realm of technology but global order.

The US has remained the undisputed superpower since WWII. The former Soviet Union did try to break its hegemony but failed. It's not just its power military or vibrant economy that has helped the US rule the world for so long, but its technology too has given it a clear edge over its competitors. At President Trump's inauguration on January 20, four tech giants were seen in one frame. Their combined net worth is a staggering $1 trillion. Someone joked that Google CEO Sundar Pichai was the poorest among them, with a net worth of just $1.4 billion.

China may have become the world's second largest economy but if it were to topple the US, it has to compete it in technology. China has long been labeled as a country best at reverse engineering. Wenfang, the head of DeepSeek, in one of his rare interviews before becoming literally a celebrity, spoke about this perception of China. He said China was 2 to 3 years behind the US in terms of technology. He made the most pertinent point that China could never compete with the US if "we just imitate". He was a strong advocate of developing indigenous cutting-edge technology. The unveiling of DeepSeek AI model seems to be the first step towards that journey.

Meanwhile, American tech giants are crying foul with some accusing DeepSeek of using their data. The Trump administration has, on the other hand, ordered an investigation to ascertain if DeepSeek is a national security threat. The reaction from the US is not a surprise. The AI war has only begun. Whoever wins this battle will rule the world!