Battle of AI Giants: China’s New “DeepSeek” vs. “U.S. Nvidia” Winner TBA

Race to Top of AI Mountain to Win the Gold Medal  

Rather long post but timely and critical, too. AI battle heats up as reported BARRON'S here with this headline

“Don’t Fight DeepSeek Learn From It”

Some of these concerns appear overblown. The real issue is China’s challenge to U.S. technology leadership posed by rapid advancements in advanced industries including artificial intelligence, semiconductors, robotics, fintech, and electric vehicles. 

Instead of blaming China for its attempt to lead in some key technologies, the West should learn from China’s desire and capability to pivot. These insights would help the U.S. decide whether to compete against China or to cooperate with China in advanced technologies.  

For decades, China was perceived primarily as the world’s factory, a place where low-cost manufacturing thrived. Recent years have shifted this perception dramatically. The U.S. and other Western nations have begun to recognize China’s burgeoning role as a hub of innovation. This transformation is evident in the rise of Chinese tech giants, advancements in various high-tech industries, and the increasing global influence of Chinese innovations. 

The West’s apprehension about China’s rise as an innovation powerhouse is recent. Historically, there was a belief that China couldn’t innovate because its economic model was controlled by the state, and that was thought to impede innovation. The West was slow to understand that China has long desired to shift from “Made in China” (with cheap labor) to “Innovate in China” (with scientific talent). 

China invented paper and fireworks in ancient times, but in recent history — since its economic reforms in 1979 — it has emphasized innovation by improving or applying existing ideas learned from the West (U.S. mostly). China’s approach to innovation includes: (1) strong government backing, and (2) focus on practical applications.

That propelled China to remarkable innovations in several fields:

First, China has redefined internet and mobile phone applications. The rise of platforms such as Alibaba’s Alipay and Tencent’s Alipay’s WeChat, and Tencent’s Alipay that has transformed how people interact, shop, and conduct business online, revolutionizing mobile payments and social media, respectively. These innovations have set new standards globally and demonstrated China’s ability to lead in digital technology. 

Second, China’s innovative prowess in EVs has taken the world by surprise. Two prominent examples are CATL’s battery technology and BYD’s EV manufacturing. Elon Musk laughed at the poor design and quality of China’s BYD cars in 2011, but in 2023 he admitted that BYD is now a competitor of Tesla’s after BYD became dominant in the EV market. With over 110,000 R&D engineers, BYD obtained 538 new patent authorizations in just the first two weeks of January, an increase of 216% over the same period last year.

Third, in telecommunications technology, Huawei’s significant advancements in the development and deployment of fifth-generation networks have prompted concerns and bans in the U.S. driven by national security. Nonetheless, Huawei remains a major competitor in the global telecom sector, competing with other industry giants like Samsung, Apple, and Ericsson.

Fourth, China has poured enormous resources into AI development, resulting in groundbreaking advancements in natural language processing, autonomous systems, and algorithm-driven manufacturing. It isn’t just DeepSeek. China’s rapid development in AI is squeezing the U.S.-led semiconductor ecosystem.

Fifth, China’s advancements in robotics and autonomous driving further illustrate its innovative capabilities.

The country is ahead of the U.S. in some areas of autonomous driving and robotics, driven by significant investments and a favorable regulatory environment. These developments are reshaping industries and positioning China as a global leader in these fields. 

Despite U.S. export controls on 24 types of chip-making equipment and three categories of software essential for semiconductor development, AI has the potential to help China develop its advanced semiconductor capabilities. 

The U.S. has often accused China of technology theft, but China’s innovation advantage lies in its ability to combine rapid technological development with a supportive ecosystem. 

These factors created the major forces driving their innovations:

1. First, its vast human capital, with a large pool of STEM graduates, provides a strong foundation for technological advancement.

2. Second, China’s culture of hard work and perseverance fosters an environment conducive to innovation.

3. Third, substantial government support through policies and funding has been instrumental in driving research research and development. 

4. Finally, China’s economic heft, with the world’s second-largest domestic market, allows for the rapid scaling of new technologies. The West’s reaction to China’s innovation highlights a sense of hypocrisy and insecurity. Initially, China was criticized for not innovating enough. As China emerges as a leading innovator, the West accuses it of stealing technology and imposes various bans out of fear.  

Instead of using export controls to panicky response to block China’s desire to innovate, it would be more constructive to learn more about China’s innovation ecosystem to advance humanity as this old Chinese proverb says: “Understanding yourself first and then your opponent’s is the best way to ensure your success.” 

Related headline article from FORTUNE: Chinese AI “DeepSeek” threatening American AI “Nvidia” for AI dominance.

My 2 Cents: I have spoken awhile about the good, the bad, and the ugly of AI. The above article takes a totally different view of how to compete rather than overtake China’s AI growth on a world scale.

 Article Intelligence (AI), the science and engineering of making intelligent machines, combines algorithms (unambiguous instructions) with data to perform functions similar to human decision-making.

* The first generation of AI, in the 1980’s and 1990’s, could apply rules written by humans to data to create outputs.

* The second generation of AI, in the 2000’s, could learn, meaning that programs could take data and guidance provided by humans, independently identify rules, and then apply those rules to new data to create outputs.

* Now, the third generation of AI, which we are currently in, seeks to incorporate “deep learning.” 

Deep learning permits programs to autonomously learn rules and automatically judge new data to create outputs, without human intervention. AI offers pros and cons like anything new on the world stage for example as explained above and in this fine article here with this introductory question: “Artificial intelligence prevents us from being inundated with irrelevant information – and that raises an important question: “Who determines what is relevant or irrelevant?  And how do they decide?”

A lot of info on this topic is growing faster than the AI field of innovation as out above – again, the good, the bad, and the ugly. 

I am not an expert by any means on this subject – only from what I read and hear and watch about AI and its growth and purpose and benefits.

Quite frankly it scares me the most in the bad and ugly parts not the good for good is supposed to be good as they say for everything and everyone.

But, as the question above asks I also ask: “Who determines the good over the bad and the ugly.” Or as also stated above: “What is relevant and irrelevant and who determines?” 

Thanks for stopping by.