The new cold war

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There is now a new cold war taking shape. This is different in scope and substance compared to the one waged after the end of the Second World War. Then the contestants were what was at that time called the Union of Soviet Socialist Republics, USSR, and the United States. These two were the major reasons for the victory scored over the axis powers of Germany and Italy and attempted in different ways to create spheres of influence for themselves. The USSR used military power to extend its sway while the US used soft power in the shape of the aid and development expertise to improve the situation of the countries that are now called the Global South.

The USSR failed while the US succeeded in bringing a number of new states to its side of the table. These had arrived on the global scene after the withdrawal of Europe from the colonial world it had created over a period of two centuries. By providing capital and development experts through the United States Agency for International Aid (USAID), Washington was able to increase its influence over a good part of the world. The USSR strategy of using its military to empower weak countries was a spectacular failure. Afghanistan was one example of what happened when Moscow tried to save from failure the Communist regime it had installed in Kabul.

In 1979, Moscow sent in its troops which were challenged in a civil war by several Islamic groups who were able to push Moscow out of their country in 1989. This defeat resulted in the collapse of the USSR and the emergence of its constituent parts as independent states in East Europe and Central Asia. Even with this historic failure, Moscow has not given up on using force to extend its influence. The long war in Ukraine is another sign of the failure of this approach.

The new cold war is between the United States and China; and information technology - in particular artificial intelligence or AI - is the field on which it is being fought. Despite the obstacles the United States has placed in China's way, the latter had brought down the fixed costs of building AI models so the marginal cost of making use of them is going up. This is one reason why less advanced countries such as Pakistan should build their own models. Here, I believe, China will be prepared to help since it does not have a large number of young people needed for this kind of work, while Pakistan has one of the youngest populations in the world with the median age of only 24 years.

I am not surprised that the word "technology" was given prominence in the joint statement issued by China and Pakistan at the conclusion of the long visit by President Asif Zardari to Beijing. Pakistan could work with China to establish joint education and training centres along Pakistan's major highways that link it with China. After imparting the necessary skills to the Pakistani youth, they could work on projects that China does not have the manpower and womanpower to develop. I say womanpower, since the IT work needs the delicate work that women are better at performing compared to men. By locating these centres on well-developed highways that have been constructed or are under construction would make it easier and cheaper for the IT workers on both sides of the border to move between the two countries. Building and running such centres could be added to what Xi and Zardari called CPEC 2.0. Such an activity could bring China and Pakistan even closer to each other.

The Americans would not appreciate totally losing Pakistan to China. President Biden, before leaving the presidency, had promulgated what was called the "AI diffusion rule" which was written to identify which countries could have access to American IT technology, in particular AI. It is unlikely that Pakistan would make the list. The rule was designed to force countries into the American technology orbit.

What has made DeepSeek a story such a success? The answer is the development of the education sector in the last few years. The team of developers and scientists behind the extraordinary development of DeepSeek is the remarkable development of China's education sector which was so underdeveloped in the 1980s and 1990s that the country sent thousands of its bright students to foreign universities, in particular to the United States. Now, according to the founder of the company, most senior technologists working in the frontline of the company were educated in China. Acclaim for the Chinese education system has poured in from local as well as foreign entrepreneurs. Says Pavel Durov, the founder of the messaging platform, Telegram, fierce competition in Chinese schools had fueled the country's success in AI. "If the U.S. does not reform its education system, it risks ceding tech leadership to China," he wrote online. China's top schools such as Tsinghua University and Peking University are world class; many of DeepSeek's employees are graduates from these schools.

The Chinese government is behind the success of the country in developing its education system. The government's investment system has grown more than 14-fold in the past two decades. Several Chinese universities now rank among the world's best. China produced more than four times as many science, technology, engineering and mathematics (STEM) graduates as the United States. Specifically in AI, it has added more than 2,300 undergraduate programmes since 2018, according to research by MacroPolo, a Chicago-based research group that studies China.

Since, DeepSeek's success some commentators in China have urged more Chinese firms to emulate its success. They have also urged the government to stay out of the way. According to Liang Wenfeng, the company's founder, "innovation requires as little intervention as possible. Innovation often comes by itself, not as something deliberately planned or let alone taught." And, in spite of this advice, the government has not kept itself away from the tech sector. In 2020, after deciding that it had too little control over major companies, like Alibaba, it began a sweeping years-long crackdown on the Chinese tech industry. This has led to some nervousness on the part of those who have the skills and capital to enter the sector.