Chinese companies such as DeepSeek, Baidu, and Alibaba are disrupting the AI market
In January 2025, Chinese AI company DeepSeek surprised Western AI researchers by releasing an inference model comparable to OpenAI's model.
So far, most American AI companies, including OpenAI, Google DeepMind, and Anthropic, have treated AI as a proprietary resource. They restrict full access to their most advanced models, making them available only through paid subscriptions or enterprise plans.
The US government also views open-source AI as a security risk. There are concerns that unregulated models could be used for cyber attacks. Congress has even proposed banning DeepSeek's AI from being deployed on government devices, citing national security concerns.
The Rise of Open-Source AI in China
Contrary to the American approach, Chinese AI companies are rapidly releasing open AI. The Financial Times has noted that open-sourcing AI allows China to circumvent American sanctions, decentralize development, and improve models by leveraging talent globally. This strategy aims to shake up the AI ecosystem the US is creating.
AI requires continuous improvement for progress. Companies developing closed-model AI must conduct research on enhancements themselves. In contrast, open-model AI is researched by developers worldwide. Chinese AI companies make their models available for anyone to download and use for free.
Reaction and Adaptation in the Market
Lisa Su, CEO of AMD, NVIDIA's main competitor, visited China in March 2025. She highlighted the compatibility of AMD's chips with DeepSeek's AI models and Alibaba's Qwen series, showcasing an evolving landscape in the AI market.
However, this shift poses risks for Chinese companies. The widespread availability of high-quality AI for free threatens their profits. Additionally, there is a possibility that the Chinese government may start strict regulation of AI under various pretexts.
The Future of AI Competition
The Financial Times concluded that the flood of open-source AI is a strategic response to a narrowing window of opportunity. With export controls on US chips and AI technology tightening, China aims to compete by flooding the market with free AI, rendering US proprietary models less appealing.
