China has publicly lauded DeepSeek’s rapid rise in the AI industry but insists the Hangzhou-based company is not looking to challenge U.S. tech giants like OpenAI, Google DeepMind, or Anthropic. In a statement seen by Business Insider, the Chinese embassy in Washington framed DeepSeek as a complementary force rather than a competitor.
DeepSeek has quickly become a rising star in China’s AI sector. The company gained global recognition after developing an AI model that drastically cut development costs, an achievement that did not go unnoticed by Beijing. DeepSeek’s founder, Liang Wenfeng, was recently given a front-row seat at a symposium led by Chinese President Xi Jinping—a strong indicator of state approval.
The symposium itself was viewed as a pivotal moment for China’s tech sector. Xi’s remarks, coupled with the unexpected return of Alibaba founder Jack Ma, signaled a more favorable stance toward the country’s once heavily regulated tech industry. Further solidifying its position, DeepSeek was praised by the Chinese embassy, which stated that the company had “significantly lowered AI development costs.”
DeepSeek has claimed that official training expenses for its latest AI model were under $6 million, although the full extent of its spending remains unclear. Meanwhile, estimates from semiconductor analytics firm SemiAnalysis suggest the startup may have access to $500 million worth of GPUs, fueling speculation about the true scale of its AI capabilities.
Despite DeepSeek’s growing prominence, American AI leaders have remained unconvinced that it represents a breakthrough. Google DeepMind’s CEO remarked that while DeepSeek’s model is impressive, it introduces “no real new scientific advance” in the pursuit of artificial general intelligence (AGI).
However, DeepSeek’s real disruptor may be its pricing strategy. Analysts at Bernstein estimate that the Chinese startup’s services are 20 to 40 times cheaper than those of OpenAI and other leading U.S. firms. This cost efficiency has raised concerns about competitive pricing pressures in the AI industry, with some Western analysts calling for a reevaluation of business models in response to DeepSeek’s approach.
While the U.S. continues to frame AI development as a technological arms race, China is taking a more diplomatic tone. The embassy’s statement emphasized that “AI companies across different regions contribute unique strengths, leading to better, more inclusive solutions for users everywhere.” This echoes Beijing’s broader strategy of positioning itself as a global AI collaborator rather than a direct challenger to American dominance.
Yet, tensions remain. The U.S. has repeatedly warned that China’s AI advancements could tip the balance in its broader push for technological superiority.