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Time Magazine
a day ago
- Business
- Time Magazine
Californians Say AI Is Moving 'Too Fast'
Hello and welcome to the Tuesday edition of In the Loop. I'm writing to you while looking out over the sunny city of San Francisco, where I'm spending the week on a reporting trip. If you're working on something cool here and want to say hi, feel free to shoot me an email at What to Know: Californians are fearful of AI Californians are more concerned than excited about the future of AI, by a margin of 55% to 33%, according to new polling shared exclusively with TIME ahead of its publication this Tuesday. Of the 1,400 adults polled, 48% said the technology was progressing 'too fast,' compared to 32% who said the pace was 'about right' and just 4% who said it was 'too slow.' And 59% of respondents said they believed AI would benefit the wealthiest corporations and households most, compared to 20% who said it would most benefit working people and the middle class. The poll was funded by TechEquity, a progressive non-profit. Support for regulation — The new data shows that 70% of Californians believe in the need for 'strong laws to make AI fair.' But the data also reveals high levels of skepticism that those laws will ever be enacted. 59% of those surveyed say they don't trust the California state government to control AI. Even more — 64% — said they do not trust the federal government. A picture emerges — The poll adds to a growing collection of data from around the world suggesting that ordinary people are worried about the impact of AI on their lives. In January, I wrote about a U.K. poll that showed 60% of Brits favoring a ban on the development of 'smarter-than-human' AI models. And in April, the Pew Research Center found that 43% of U.S. adults believed AI was more likely to harm than benefit them, compared to 24% who expected the benefits to outweigh the harms. Ground zero — California is emerging as a key battleground for efforts to legislate on AI, as the state where most top American AI companies are based. Last year a bill that aimed to regulate so-called 'frontier' models cleared the state legislature, only to be vetoed by Governor Gavin Newsom. That hasn't stopped other efforts to regulate AI in the state, however. California 'is a place where you can still legislate and govern with a semi-functioning legislative process, which is not something you can say about D.C., particularly on this topic,' says Catherine Bracy, the CEO of TechEquity. 'The federal government has made it clear that they are going to be completely hands-off, if not creating rules that unleash the industry even more,' Bracy says. '[So] it is incumbent on the states to pick up the slack and make sure that real people who are going to be impacted by these tools are protected.' Who to Know: Dean Ball, former White House advisor on AI For a stint in office, it was an unusually impactful one. Dean Ball joined the Trump Administration in April—headhunted based on an essay he had written titled 'Here is what I think we should do' about AI policy. What followed was a whirlwind five months in government, in which he played a key role contributing to the AI Action Plan, Trump's AI policy, which was announced in July. Earlier this month, Ball announced he was leaving the government to focus on his own research. Action planning — Trump's Action Plan won praise for its emphasis on bolstering U.S. energy grid capacity, plus onshoring datacenters and the production of the chips that power them. The document also urged U.S. companies to focus more on developing open-weight AI models, to prevent the world from coming to rely on Chinese models (which are currently the best in class). The document framed these recommendations, and more, in terms of the escalating AI race with China. Exit interview — In an interview with TIME, Ball emphasized the importance of AI to the Trump administration. 'AI is the President's number one technology policy priority, by a significant margin,' he said. At the same time, Ball says, there is a lot of skepticism inside the Administration toward AI industry projections that superintelligent machines are some two to five years away. 'The diffusion of AI is going to take a really long time,' Ball says. 'I've lived through technology revolutions before, where I was young and bright-eyed and thought it was all going to happen in two or three years. And it turns out a lot of it did happen, but it took 15.' AI in Action: Should you delete your old emails to save water? An official U.K. government document, published last week, has caught a lot of heat online for suggesting that users should 'delete old emails and pictures' to save water during a drought, because data centers 'require vast amounts of water to cool their systems.' It is true that many data centers use water for cooling, but let's get a sense of perspective here. Andy Masley, a blogger who has written several illuminating pieces about the energy and water expenditure of AI systems, ran the numbers. Fixing a leaking toilet, he wrote, can save 200-400 liters of water per day. 'To save as much water in data centers as fixing your toilet would save, you would need to delete 1.5 billion photos, or 200 billion emails. If it took you 0.1 seconds to delete each email, and you deleted them nonstop for 16 hours a day, it would take you 723 years to delete enough emails to save the same amount of water in data centers as you could if you fixed your toilet. Maybe you should fix your toilet.' As always, if you have an interesting story of AI in Action, we'd love to hear it. Email us at: intheloop@ What We're Reading 'Meta's flirty AI chatbot invited a retiree to New York. He never made it home' by Jeff Horwitz in Reuters A relentlessly bleak story from Jeff Horwitz, the best Meta reporter in the business. 'Bue's story, told here for the first time, illustrates a darker side of the artificial intelligence revolution now sweeping tech and the broader business world. His family shared with Reuters the events surrounding his death, including transcripts of his chats with the Meta avatar, saying they hope to warn the public about the dangers of exposing vulnerable people to manipulative, AI-generated companions.'
AllAfrica
12-02-2025
- Business
- AllAfrica
DeepSeek: China's open-source AI caused a geopolitical earthquake
Readers in a hurry may wish to put this article aside for later. It is an important long-form exploration, not a quick read. – Editors We are in the early days of a seismic shift in the global AI industry. DeepSeek, a previously little-known Chinese artificial intelligence company, has produced a 'game changing'' large language model that promises to reshape the AI landscape almost overnight. But DeepSeek's breakthrough also has wider implications for the technological arms race between the US and China, having apparently caught even the best-known US tech firms off guard. Its launch has been predicted to start a 'slow unwinding of the AI bet' in the West, amid a new era of 'AI efficiency wars.' In fact, industry experts have been speculating for years about China's rapid advancements in AI. While the supposedly free-market US has often prioritized proprietary models, China has built a thriving AI ecosystem by leveraging open-source technology, fostering collaboration between government-backed research institutions and major tech firms. This strategy has enabled China to scale its AI innovation rapidly while the US – despite all the tub-thumping from Silicon Valley – remains limited by restrictive corporate structures. Companies such as Google and Meta, despite promoting open-source initiatives, still rely heavily on closed-source strategies that limit broader access and collaboration. What makes DeepSeek particularly disruptive is its ability to achieve cutting-edge performance while reducing computing costs – an area where US firms have struggled due to their dependence on training models that demand very expensive processing hardware. Where once Silicon Valley was the epicentre of global digital innovation, its corporate behemoths now appear vulnerable to more innovative, 'scrappy' startup competitors – albeit ones enabled by major state investment in AI infrastructure. By leveraging China's industrial approach to AI, DeepSeek has crystalized a reality that many in Silicon Valley have long ignored: AI's center of power is shifting away from the US and the west. It highlights the failure of US attempts to preserve its technological hegemony through tight export controls on cutting-edge AI chips to China. According to research fellow Dean Ball: 'You can keep [computing resources] away from China, but you can't export-control the ideas that everyone in the world is hunting for.' DeepSeek's success has forced Silicon Valley and large Western tech companies to 'take stock,' realizing that their once-unquestioned dominance is suddenly at risk. Even the US president, Donald Trump, has proclaimed that this should be a 'wake-up call for our industries that we need to be laser-focused on competing.' But this story is not just about technological prowess – it could mark an important shift in global power. Former US secretary of state Mike Pompeo has framed DeepSeek's emergence as a 'shot across America's bow,' urging US policymakers and tech executives to take immediate action. DeepSeek's rapid rise underscores a growing realization: Globally, we are entering a potentially new AI paradigm, one in which China's model of open-source innovation and state-backed development is proving more effective than Silicon Valley's corporate-driven approach. I've spent much of my career analyzing the transformative role of AI on the global digital landscape – examining how AI shapes governance, market structures and public discourse while exploring its geopolitical and ethical dimensions, now and far into the future. I also have personal connections with China, having lived there while teaching at Jiangsu University and then written my PhD thesis on the country's state-led marketization program. Over the years I have studied China's evolving tech landscape, observing firsthand how its unique blend of state-driven industrial policy and private-sector innovation has fueled rapid AI development. I believe this moment may come to be seen as a turning point not just for AI but for the geopolitical order. If China's AI dominance continues, what could this mean for the future of digital governance, democracy, and the global balance of power? Even in the early days of China's digital transformation, analysts predicted the country's open-source focus could lead to a major AI breakthrough. In 2018, China was integrating open-source collaboration into its broader digitization strategy, recognizing that fostering shared development efforts could accelerate its AI capabilities. Unlike the US, where proprietary AI models dominated, China embraced open-source ecosystems to bypass Western gatekeeping, to scale innovation faster and to embed itself in global AI collaboration. China's open-source activity surged dramatically in 2020, laying the foundation for the kind of innovation seen today. By actively fostering an open-source culture, China ensured that a broad range of developers had access to AI tools, rather than restricting them to a handful of dominant companies. The trend has continued in recent years, with China even launching its own state-backed open-source operating systems and platforms, in 2023, to further reduce its dependence on western technology. This move was widely seen as an effort to cement its AI leadership and create an independent, self-sustaining digital ecosystem. . While China has been steadily positioning itself as a leader in open-source AI, Silicon Valley firms remained focused on closed, proprietary models – allowing China to catch up fast. While companies like Google and Meta promoted open-source initiatives in name, they still locked key AI capabilities behind paywalls and restrictive licenses. In contrast, China's government-backed initiatives have treated open-source AI as a national resource, rather than a corporate asset. This has resulted in China becoming one of the world's largest contributors to open-source AI development, surpassing many western firms in collaborative projects. Chinese tech giants such as Huawei, Alibaba and Tencent are driving open-source AI forward with frameworks like PaddlePaddle, X-Deep Learning (X-DL) and MindSpore — all now core to China's machine learning ecosystem. But they're also making major contributions to global AI projects, from Alibaba's Dragonfly, which streamlines large-scale data distribution, to Baidu's Apollo, an open-source platform accelerating autonomous vehicle development. These efforts don't just strengthen China's AI industry, they embed it deeper into the global AI landscape. This shift had been years in the making, as Chinese firms (with state backing) pushed open-source AI forward and made their models publicly available, creating a feedback loop that western companies have also – quietly – tapped into. A year ago, for example, US firm released Smaug-72B, an AI model designed for enterprises that built directly upon Alibaba's Qwen-72B and outperformed proprietary models like OpenAI's GPT-3.5 and Mistral's Medium. But the potential for US companies to further build on Chinese open-source technology may be limited by political as well as corporate barriers. In 2023, US lawmakers highlighted growing concerns that China's aggressive investment in open-source AI and semiconductor technologies would eventually erode western leadership in AI. Some policymakers called for bans on certain open-source chip technologies, due to fears they could further accelerate China's AI advancements. By then, however, China's AI horse had already bolted. DeepSeek's rise should have been obvious to anyone familiar with management theory and the history of technological breakthroughs linked to 'disruptive innovation.' Latecomers to an industry rarely compete by playing the same game as incumbents – they have to be disruptive. China, facing restrictions on cutting-edge western AI chips and lagging behind in proprietary AI infrastructure, had no choice but to innovate differently. Open-source AI provided the perfect vehicle: a way to scale innovation rapidly, lower costs and tap into global research while bypassing Silicon Valley's resource-heavy, closed-source model. From a Western and traditional human rights perspective, China's embrace of open-source AI may appear paradoxical, given the country's strict information controls. Its AI development strategy prioritizes both technological advancement and strict alignment with the Chinese Communist party's ideological framework, ensuring AI models adhere to 'core socialist values' and state-approved narratives. AI research in China has thrived not only despite these constraints but, in many ways, because of them. China's success goes beyond traditional authoritarianism; it embodies what Harvard economist David Yang calls 'Autocracy 2.0.' Rather than relying solely on fear-based control, it uses economic incentives, bureaucratic efficiency and technology to manage information and maintain regime stability. The Chinese government has strategically encouraged open-source development while maintaining tight control over AI's domestic applications, particularly in surveillance and censorship. Indeed, authoritarian regimes may have a significant advantage in developing facial-recognition technology due to their extensive surveillance systems. The vast amounts of data collected through these networks enable private AI companies to create advanced algorithms, which can then be adapted for commercial uses, potentially accelerating economic growth. China's AI strategy is built on a dual foundation of state-led initiatives and private-sector innovation. The country's AI roadmap, first outlined in the 2017 new generation artificial intelligence development plan, follows a three-phase timeline: achieving global competitiveness by 2020, making major AI breakthroughs by 2025, and securing world leadership in AI by 2030. In parallel, the government has emphasised data governance, regulatory frameworks and ethical oversight to guide AI development 'responsibly.' A defining feature of China's AI expansion has been the massive infusion of state-backed investment. Over the past decade, government venture capital funds have injected approximately US$912 billion into early-stage firms, with 23% of that funding directed toward AI-related companies. A significant portion has targeted China's less-developed regions, following local investment mandates. Compared with private venture capital, government-backed firms often lag in software development but demonstrate rapid growth post-investment. Moreover, state funding often serves as a signal for subsequent private-sector investment, reinforcing the country's AI ecosystem. China's AI strategy represents a departure from its traditional industrial policies, which historically emphasized self-sufficiency, support for a handful of national champions and military-driven research. Instead, the government has embraced a more flexible and collaborative approach that encourages open-source software adoption, a diverse network of AI firms and public-private partnerships to accelerate innovation. This model prioritizes research funding, state-backed AI laboratories, and AI integration across key industries including security, healthcare and infrastructure. Despite strong state involvement, China's AI boom is equally driven by private-sector innovation. The country is home to an estimated 4,500 AI companies, accounting for 15% of the world's total. As economist Liu Gang told the Chinese Communist Party's Global Times newspaper: 'The development of AI is fast in China – for example, for AI-empowered large language models. Aided with government spending, private capital is flowing to the new sector. Increased capital inflow is anticipated to further enhance the sector in 2025.' China's tech giants including Baidu, Alibaba, Tencent and SenseTime have all benefited from substantial government support while remaining competitive on the global stage. But unlike in the US, China's AI ecosystem thrives on a complex interplay between state support, corporate investment and academic collaboration. Recognizing the potential of open-source AI early on, Tsinghua University in Beijing has emerged as a key innovation hub, producing leading AI startups such as Zhipu AI, Baichuan AI, Moonshot AI and MiniMax — all founded by its faculty and alumni. The Chinese Academy of Sciences has similarly played a crucial role in advancing research in deep learning and natural language processing. Unlike the West, where companies like Google and Meta promote open-source models for strategic business gains, China sees them as a means of national technological self-sufficiency. To this end, the National AI Team, composed of 23 leading private enterprises, has developed the National AI Open Innovation Platform, which provides open access to AI datasets, toolkits, libraries and other computing resources. DeepSeek is a prime example of China's AI strategy in action. The company's rise embodies the government's push for open-source collaboration while remaining deeply embedded within a state-guided AI ecosystem. Chinese developers have long been major contributors to open-source platforms, ranking as the second-largest group on GitHub by 2021. Founded by Chinese entrepreneur Liang Wenfeng in 2023, DeepSeek has positioned itself as an AI leader while benefiting from China's state-driven AI ecosystem. Liang, who also established the hedge fund High-Flyer, has maintained full ownership of DeepSeek and avoided external venture capital funding. Liang Wenfeng, founder of DeepSeek. Photo: CCTV, Though there is no direct evidence of government financial backing, DeepSeek has reaped the rewards of China's AI talent pipeline, state-sponsored education programs and research funding. Liang has engaged with top government officials including China's premier, Li Qiang, reflecting the company's strategic importance to the country's broader AI ambitions. In this way, DeepSeek perfectly encapsulates 'AI with Chinese characteristics' – a fusion of state guidance, private-sector ingenuity and open-source collaboration, all carefully managed to serve the country's long-term technological and geopolitical objectives. Recognizing the strategic value of open-source innovation, the government has actively promoted domestic open-source code platforms like Gitee to foster self-reliance and insulate China's AI ecosystem from external disruptions. However, this also exposes the limits of China's open-source ambitions. The government pushes collaboration, but only within a tightly controlled system where state-backed firms and tech giants call the shots. Reports of censorship on Gitee reveal how Beijing carefully manages innovation, ensuring AI advances stay in line with national priorities. Independent developers can contribute, but the real power remains concentrated in companies that operate within the government's strategic framework. DeepSeek's emergence has sparked intense debate across the AI industry, drawing a range of reactions from leading Silicon Valley executives, policymakers and researchers. While some view it as an expected evolution of open-source AI, others see it as a direct challenge to western AI leadership. Microsoft's CEO, Satya Nadella, emphasized its technical efficiency. 'It's super-impressive in terms of both how they have really effectively done an open-source model that does this inference-time compute, and is super-compute efficient,' Nadella told CNBC. 'We should take the developments out of China very, very seriously.' Silicon Valley venture capitalist Marc Andreessen, a prominent advisor to Trump, was similarly effusive. 'DeepSeek R1 is one of the most amazing and impressive breakthroughs I've ever seen – and, as open source, a profound gift to the world,' he wrote on X. For Yann LeCun, Meta's chief AI scientist, DeepSeek is less about China's AI capabilities and more about the broader power of open-source innovation. He argued that the situation should be read not as China's AI surpassing the US, but rather as open-source models surpassing proprietary ones. 'DeepSeek has profited from open research and open source (e.g. PyTorch and Llama from Meta),' he wrote on Threads. 'They came up with new ideas and built them on top of other people's work. Because their work is published and open source, everyone can profit from it. That is the power of open research and open source.' Not all responses were so measured. Alexander Wang, CEO of Scale AI – a US firm specializing in AI data labeling and model training – framed DeepSeek as a competitive threat that demands an aggressive response. He wrote on X: 'DeepSeek is a wake-up call for America, but it doesn't change the strategy: USA must out-innovate & race faster, as we have done in the entire history of AI. Tighten export controls on chips so that we can maintain future leads. Every major breakthrough in AI has been American.' Elon Musk added fuel to speculation about DeepSeek's hardware access when he responded with a simple 'obviously' to Wang's earlier claims on CNBC that DeepSeek had secretly acquired 50,000 Nvidia H100 GPUs, despite US export restrictions. Beyond the tech world, US policymakers have taken a more adversarial stance. House speaker Mike Johnson accused China of leveraging DeepSeek to erode American AI leadership. 'They abuse the system, they steal our intellectual property. They're now trying to get a leg up on us in AI.' For his part, Trump took a more pragmatic view, seeing DeepSeek's efficiency as a validation of cost-cutting approaches. 'I view that as a positive, as an asset …. You won't be spending as much, and you'll get the same result, hopefully.' The rise of DeepSeek may have helped jolt the Trump administration into action, leading to sweeping policy shifts aimed at securing US dominance in AI. In his first week back in the White House, the US president announced a series of aggressive measures, including massive federal investments in AI research, closer partnerships between the government and private tech firms and the rollback of regulations seen as slowing US innovation. The administration's framing of AI as a critical national interest reflects a broader urgency sparked by China's rapid advancements, particularly DeepSeek's ability to produce cutting-edge models at a fraction of the cost traditionally associated with AI development. But this response is not just about national competitiveness – it is also deeply entangled with private industry. Musk's growing closeness to Trump, for example, can be viewed as a calculated move to protect his own dominance at home and abroad. By aligning with the administration, Musk ensures that US policy tilts in favour of his AI ventures, securing access to government backing, computing power,and regulatory control over AI exports. At the same time, Musk's public criticism of Trump's US$500 billion AI infrastructure plan – claiming the companies involved lack the necessary funding – was as much a warning as a dismissal, signaling his intent to shape policy in a way that benefits his empire while keeping potential challengers at bay. Not unrelated, Musk and a group of investors have just launched a US$97.4 billion bid for OpenAI's nonprofit arm, a move that escalates his feud with OpenAI CEO Sam Altman and seeks to strengthen his grip on the AI industry. Altman has dismissed the bid as a 'desperate power grab', insisting that OpenAI will not be swayed by Musk's attempts to reclaim control. The spat reflects how DeepSeek's emergence has thrown US tech giants into what could be all-out war, fuelling bitter corporate rivalries and reshaping the fight for AI dominance. And while the US and China escalate their AI competition, other global leaders are pushing for a coordinated response. The Paris AI Action Summit, held on February 10 and 11, has become a focal point for efforts to prevent AI from descending into an uncontrolled power struggle. France's president, Emmanuel Macron, warned delegates that without international oversight, AI risks becoming 'the wild west,' where unchecked technological development creates instability rather than progress. But at the end of the two-day summit, the UK and US refused to sign an international commitment to 'ensuring AI is open, inclusive, transparent, ethical, safe, secure and trustworthy … making AI sustainable for people and the planet.' China was among the 61 countries to sign this declaration. Concerns have also been raised at the summit about how AI-powered surveillance and control are enabling authoritarian regimes to strengthen repression and reshape the citizen-state relationship. This highlights the fast-growing global industry of digital repression, driven by an emerging 'authoritarian-financial complex' that may exacerbate China's strategic advancement in AI. Equally, DeepSeek's cost-effective AI solutions have created an opening for European firms to challenge the traditional AI hierarchy. As AI development shifts from being solely about compute power to strategic efficiency and accessibility, European firms now have an opportunity to compete more aggressively against their US and Chinese counterparts. Whether this marks a true rebalancing of the AI landscape remains to be seen. But DeepSeek's emergence has certainly upended traditional assumptions about who will lead the next wave of AI innovation – and how global powers will respond to it. DeepSeek's emergence has forced US tech leaders to confront an uncomfortable reality: They underestimated China's AI capabilities. Confident in their perceived lead, companies like Google, Meta, and OpenAI prioritized incremental improvements over anticipating disruptive competition, leaving them vulnerable to a rapidly evolving global AI landscape. In response, the US tech giants are now scrambling to defend their dominance, pledging over US$400 billion in AI investment. DeepSeek's rise, fuelled by open-source collaboration, has reignited fierce debates over innovation versus security, while its energy-efficient model has intensified scrutiny on AI's sustainability. Yet Silicon Valley continues to cling to what many view as outdated economic theories such as the Jevons paradox to downplay China's AI surge, insisting that greater efficiency will only fuel demand for computing power and reinforce their dominance. Companies like Meta, OpenAI and Microsoft remain fixated on scaling computational power, betting that expensive hardware will secure their lead. But this assumption blinds them to a shifting reality. DeepSeek's rise as the potential 'Walmart of AI' is shaking Silicon Valley's foundation, proving that high-quality AI models can be built at a fraction of the cost. By prioritizing efficiency over brute-force computing power, DeepSeek is challenging the US tech industry's reliance on expensive hardware like Nvidia's high-end chips. This shift has already rattled markets, driving down the stock prices of major US firms and forcing a reassessment of AI dominance. Nvidia, whose business depends on supplying high-performance processors, appears particularly vulnerable as DeepSeek's cost-effective approach threatens to reduce demand for premium chips. The growing divide between the US and China in AI, however, is more than just competition – it's a clash of governance models. While US firms remain fixated on protecting market dominance, China is accelerating AI innovation with a model that is proving more adaptable to global competition. If Silicon Valley resists structural change, it risks falling farther behind. We may witness the unraveling of the 'Silicon Valley effect', through which tech giants have long manipulated AI regulations to entrench their dominance. For years, Google, Meta,and OpenAI shaped policies that favored proprietary models and costly infrastructure, ensuring AI development remained under their control. DeepSeek is redefining AI with breakthroughs in code intelligence, vision-language models and efficient architectures that challenge Silicon Valley's dominance. By optimizing computation and embracing open-source collaboration, DeepSeek shows the potential of China to deliver cutting-edge models at a fraction of the cost, outperforming proprietary alternatives in programming, reasoning and real-world applications. More than a policy-driven rise, China's AI surge reflects a fundamentally different innovation model – fast, collaborative and market-driven – while Silicon Valley holds on to expensive infrastructure and rigid proprietary control. If US firms refuse to adapt, they risk losing the future of AI to a more agile and cost-efficient competitor. But China is not just disrupting Silicon Valley. It is expanding 'geotechnopolitics', where AI is a battleground for global power. With AI projected to add US$15.7 trillion to the global economy by 2030, China and the US are racing to control the technology that will define economic, military and political dominance. DeepSeek's advancement has raised national security concerns in the US. Trump's government is considering stricter export controls on AI-related technologies to prevent them from bolstering China's military and intelligence capabilities. As AI-driven defence systems, intelligence operations and cyber warfare redefine national security, governments must confront a new reality: AI leadership is not just about technological superiority, but about who controls the intelligence that will shape the next era of global power. China's AI ambitions extend beyond technology, driving a broader strategy for economic and geopolitical dominance. But with over 50 state-backed companies developing large-scale AI models, its rapid expansion faces growing challenges, including soaring energy demands and US semiconductor restrictions. China's president, Xi Jinping, remains resolute, stating: 'Whoever can grasp the opportunities of new economic development such as big data and artificial intelligence will have the pulse of our times.' He sees AI driving 'new quality productivity' and modernizing China's manufacturing base, calling its 'head goose effect' a catalyst for broader innovation. To counter western containment, China has embraced a 'guerrilla' economic strategy, bypassing restrictions through alternative trade networks, deepening ties with the global south, and exploiting weaknesses in global supply chains. Instead of direct confrontation, this decentralized approach uses economic coercion to weaken adversaries while securing China's own industrial base. China is also leveraging open-source AI as an ideological tool, presenting its model as more collaborative and accessible than western alternatives. This narrative strengthens its global influence, aligning with nations seeking alternatives to western digital control. While strict state oversight remains, China's embrace of open-source AI reinforces its claim to a future where innovation is driven not by corporate interests but through shared collaboration and global cooperation. But while DeepSeek claims to be open access, its secrecy tells a different story. Key details on training data and fine-tuning remain hidden, and its compliance with China's AI laws has sparked global scrutiny. Italy has banned the platform over data-transfer risks, while Belgium and Ireland launched privacy probes. Under Chinese regulations, DeepSeek's outputs must align with state-approved narratives, clashing with the EU's AI Act, which demands transparency and protects political speech. Such 'controlled openness' raises many red flags, casting doubt on China's place in markets that value data security and free expression. Many western commentators are seizing on reports of Chinese AI censorship to frame other models as freer and more politically open. The revelation that a leading Chinese chatbot actively modifies or censors responses in real time has fueled a broader narrative that western AI operates without such restrictions, reinforcing the idea that democratic systems produce more transparent and unbiased technology. This framing serves to bolster the argument that free societies will ultimately lead the global AI race. But, at its heart, the 'AI arms race' is driven by technological dominance. The US, China, and the EU are charting different paths, weighing security risks against the need for global collaboration. How this competition is framed will shape policy: lock AI behind restrictions, or push for open innovation. DeepSeek, for all its transformational qualities, continues to exemplify a model of AI where innovation prioritizes scale, speed and efficiency over societal impact. This drive to optimize computation and expand capabilities overshadows the need to design AI as a truly public good. In doing so, it eclipses this technology's genuine potential to transform governance, public services and social institutions in ways that prioritize collective wellbeing, equity and sustainability over corporate and state control. A truly global AI framework requires more than political or technological openness. It demands structured cooperation that prioritizes shared governance, equitable access, and responsible development. Following a workshop in Shanghai hosted by the Chinese government last September, the UN's general secretary, António Guterres, outlined his vision for AI beyond corporate or state control: 'We must seize this historic opportunity to lay the foundations for inclusive governance of AI – for the benefit of all humanity. As we build AI capacity, we must also develop shared knowledge and digital public goods.' Both the west and China frame their AI ambitions through competing notions of 'openness' – aligned in both cases with their strategic interests and reinforcing existing power structures. Western tech giants claim AI drives democratization, yet they often dominate digital infrastructure in parts of Africa, Asia and Latin America, exporting models based on 'corporate imperialism' that extract value while disregarding local needs. China, by contrast, positions itself as a technological partner for the rest of the Global South. However, its AI remains tightly controlled, reinforcing state ideology. China's proclaimed view on international AI collaboration emphasizes that AI should not be 'a game of rich countries,'as President Xi stated during the 2024 G20 summit. By advocating for inclusive global AI development, China positions itself as a leader in shaping international AI governance, especially via initiatives like the UN AI resolution and its AI capacity-building action plan. These efforts help promote a more balanced technological landscape while allowing China to strengthen its influence in global AI standards and frameworks. However, beneath all these narratives, both China and the US share a strategy of AI expansion that relies on exploited human labor, from data annotation to moderation, exposing a system driven less by innovation than by economic and political control. Peter Bloom is a professor of management at the University of Essex . This article is republished from The Conversation under a Creative Commons license. Read the original article.
Politico
28-01-2025
- Business
- Politico
China pulls a Silicon Valley on… Silicon Valley
Presented by Spectrum for the Future When Chinese artificial intelligence startup DeepSeek rocketed to the top of the AI race over the weekend, it upended not just a ruthless corporate competition for tech supremacy but a geopolitical one. America was supposed to be the world leader on AI; suddenly, China had a credible claim. Wall Street was shocked. So was Washington. And yet for anyone familiar with previous digital upheavals, it shouldn't have come as much of a surprise. Silicon Valley's own mythos is built on the tech-world challengers who beat the odds and slew corporate Goliaths through sheer technical ingenuity. If anything is remarkable about the seeming DeepSeek coup, it's that companies like OpenAI — which were scrappy, disruptive startups just a couple of years ago — have already matured into the kind of big, connected firms that get caught on their back foot by faster-moving rivals. 'There's a certain extent to which maybe [large AI firms] thought this was harder to do than it was,' Dean Ball, a research fellow at Mercatus and author of the Hyperdimensional newsletter, told DFD. Given America's strict export controls on high-end chips, analysts are still trying to figure out the exact details of how DeepSeek managed to match the top American models on a shoestring. DeepSeek itself claims it was done with ingenuity rather than fancy equipment — based on good old-fashioned optimization and low-level programming grunt work. 'You can keep compute away from China, but you can't export-control the ideas that everyone in the world is hunting for,' Ball said. 'This is just 1,500 lines of Python code, and it's going to spread.' Silicon Valley, and much of our modern digital landscape, was built on exactly such ingenious workarounds. In the 1980s IBM had a seemingly permanent stranglehold on the nascent personal computer market, until entrepreneurs and tinkerers across the country reverse-engineered the company's vaunted firmware to make their own cheaper, faster competitors. In the Web era, Google Chrome dethroned its clunky, monopolistic predecessor Internet Explorer using open-source components. (The David-and-Goliath effect can sometimes even spill over and revolutionize other, non-"tech' industries, as in the case of the Napster founders realizing that people might prefer to listen to music on their computers rather than by buying it on pricey plastic discs.) When this kind of out-innovation happens in the private sector, it's celebrated as 'disruption,' the lifeblood of American capitalism. When it happens at the hands of a Chinese firm and embarrasses a multi-billion-dollar national champion industry, as President Donald Trump's new administration wants AI to be, it's cause for alarm. Senate Majority Leader John Thune (R-S.D.) told POLITICO today that the DeepSeek model's performance is 'a wake-up call for us that we've got to step up our game,' and venture capitalist and Trump ally Marc Andreessen declared it 'AI's Sputnik moment.' There's a huge irony at the heart of this problem, and Andreessen's post (unintentionally) gets right at it. The tech world, particularly its right-leaning elements, have for years used the threat of Chinese supremacy to advocate for more government investment and support. The result is a tech industry whose relationship with government has slowly grown to resemble that of stalwart aerospace giants like Boeing and Lockheed Martin, their products given special treatment by a government that sees them as crucial to national security. Eric Schmidt, the longtime Google CEO and founder of the Special Competitive Studies Project focused on U.S.-China geopolitical competition, wrote in an op-ed published in The Washington Post today that America should invest more in research and development to maintain the U.S.' 'competitive edge,' and that 'there is clearly mounting pressure on America's Big Tech players if DeepSeek can compete with them using far fewer resources.' Despite his newfound closeness with American AI companies, Trump actually embraced the DeepSeek news, calling it a 'positive development.' He said that he hoped 'instead of spending billions and billions, you will spend less and you'll come up with hopefully the same solution.' So which part of the industry is going to prevail? Ball told DFD that likely the compute heavyweights and their flyweight counterparts do ultimately need each other — the breakthroughs achieved at great cost by companies like OpenAI, then inevitably replicated by a cheap competitor, and vice versa, in a never-ending cat and mouse game that speeds up innovation overall. 'There's not some finish line we're racing to,' Ball said. 'We're going to get models that are more capable, and the country that quote-unquote 'wins' will be the country that has the most creative and wide-ranging uses for AI, and that's going to be compute-expensive and require a huge infrastructure buildout.' Still, if America's established AI players hope to keep up and avoid surprises like this most recent one — and, maybe more importantly, maintain the political credibility that allows them to make big asks of their federal government — they might need to pay more attention to their competitors, and reacquaint themselves with the improvisational, cheaper-is-better ethos on which Silicon Valley was built. mr. musk goes to washington Lawmakers are skeptical of Elon Musk's plans for an overhaul of government, given his apparent lack of familiarity with it. POLITICO's Andres Picon reported for E&E News this morning on a chorus of Washington lawmakers who support his goals but think the tech mogul is in for an education in how the capital (and indeed the Capitol) works. 'I think what [Musk is] learning is that the rules around here, how you cut the government — there's political realities,' Senate Budget Chair Lindsey Graham (R-S.C.), said. House Agriculture Chair Glenn 'G.T.' Thompson (R-Pa.) said he 'would welcome Mr. Musk to come and sit down so we can have a really good conversation about agriculture, because I want him to understand American agriculture.' And furthermore, even some Republican lawmakers are concerned about potential conflicts of interest: 'Say you're the chairman of a committee. … Would you be concerned that Donald Trump at some point would say, 'Hey, I've got this great idea: Elon's gonna give me $10 and I'm gonna lease NASA to him for the next 50 years'?' one anonymous longtime Republican lawmaker said. 'You know that kind of shit is possible … You have to wonder about the separation between the best interest of the country and the best interest of Elon.' fact-checkers under fire Fact-checkers have been under siege since Meta's Mark Zuckerberg made his high-profile call to stop working with them. POLITICO's Mathieu Pollet spoke to five people at fact-checking organizations Meta once partnered with. They all said they've faced increased online harassment, attacks from politicians and even death threats in recent weeks. 'The first thing we've noticed after Zuckerberg's statement … was a huge spread of harassment toward fact-checkers,' Aistė Meidutė, editor of the Lie Detector fact-checking project at the Lithuanian news outlet Delfi, told Mathieu. 'It was a huge beat to our credibility. We see the after-effects right now … We are very worried.' Although Meta's announcement was rolled out in the U.S., observers think it won't be long before the policy shift reaches Europe as well — even though that will set the U.S. company up for a clash with the European Union's Digital Services Act. 'It's hard for me to understand why they would keep the program here in its current form if they won't have it in the U.S. where they are under the most direct political pressure anyway,' said Morten Langfeldt Dahlback, the head of innovation at Norway's fact-checking firm Faktisk. post OF THE DAY The Future in 5 links Stay in touch with the whole team: Derek Robertson (drobertson@ Mohar Chatterjee (mchatterjee@ Steve Heuser (sheuser@ Nate Robson (nrobson@ Daniella Cheslow (dcheslow@ and Christine Mui (cmui@
