DeepSeek founder says China AI will stop following U.S.；Analysis: Xi Jinping's star wanes at key military gala
SoftBank ‘in talks’ to invest up to $25bn in OpenAI
Welcome to this issue of The China Brief. Today is January 30, 2025. Here at The China Brief, we bring you the latest news on China's politics, economy, and society from global media sources, along with exclusive expert analysis. If you find our content helpful, please subscribe to our newsletter.
DeepSeek founder says China AI will stop following U.S.
Nikkei Asia
Chinese startup DeepSeek has gained global attention with its cost-effective AI model, DeepSeek-R1, which rivals U.S. alternatives. The company's founder, Liang Wenfeng, emphasized the importance of innovation over short-term profits and expressed a desire for China to contribute more to global technology. DeepSeek focuses on basic research to foster an ecosystem for innovation rather than merely applying existing technologies. The company aims to build a competitive advantage through knowledge accumulation and a strong corporate culture, despite challenges like U.S. restrictions on high-end chip exports.
https://asia.nikkei.com/Business/36Kr-KrASIA/DeepSeek-founder-says-China-AI-will-stop-following-U.S
Analysis: Xi Jinping's star wanes at key military gala
Nikkei Asia
Katsuji Nakazawa, a senior writer at Nikkei, reflects on a recent Chinese military gala attended by Xi Jinping, which has revealed shifts in the portrayal and influence of the leader within the military. Traditionally, Xi has been prominently featured in media coverage of such events, but this year, state-run CCTV and PLA Daily downplayed his presence, focusing on a broader group of military leaders. This change in coverage coincided with the suspension of Miao Hua, a key Xi ally responsible for military propaganda, raising questions about Xi's diminishing personality cult and the dynamics of power within the Chinese Communist Party (CCP). The gala's media portrayal suggests an emphasis on collective leadership and intraparty democracy, potentially signaling a response to internal party factions critical of Xi's concentration of power. As preparations begin for the National People's Congress in March, the evolving relationship between Xi and the military remains a focal point, with implications for future leadership and governance within China.
https://asia.nikkei.com/Editor-s-Picks/China-up-close/Analysis-Xi-Jinping-s-star-wanes-at-key-military-gala
SoftBank ‘in talks’ to invest up to $25bn in OpenAI
Guardian
SoftBank is reportedly in negotiations to invest between $15 billion and $25 billion in OpenAI, which would make it the largest financial supporter of the company behind ChatGPT. This potential investment follows SoftBank's recent participation in a funding round that valued OpenAI at $157 billion, alongside Microsoft. The investment is part of a collaboration with Oracle to create a massive AI infrastructure project called Stargate, which aims to build AI data centers with an initial investment of $100 billion. OpenAI's CEO, Sam Altman, has responded to criticisms from Elon Musk regarding the funding, stating that it would benefit the country. Additionally, OpenAI faces competition from a new Chinese rival, DeepSeek, which has raised concerns about the use of its technology by foreign startups. The proposed investment is still under review by OpenAI's board and executives.
https://www.theguardian.com/technology/2025/jan/30/softbank-in-talks-to-invest-up-to-25bn-in-openai-chatgpt
DeepSeek blocked on Apple and Google app stores in Italy
Nikkei Asia
The Chinese AI app DeepSeek was temporarily removed from Apple and Google app stores in Italy after the Italian data protection authority requested information regarding its handling of personal data. This follows DeepSeek's recent launch of a free AI assistant that quickly gained popularity, surpassing ChatGPT in downloads. The Italian regulator is investigating whether DeepSeek complies with GDPR regulations and has requested details on the types of personal data collected, its sources, purposes, and storage location. Meanwhile, DeepSeek remains accessible to users who had already downloaded the app and is still available in other EU countries and the UK. The Irish Data Protection Commission has also sought information on DeepSeek's data processing for Irish users. Additionally, concerns about potential manipulation of public opinion by AI applications have been raised in Germany ahead of national elections.
https://asia.nikkei.com/Business/Technology/Artificial-intelligence/DeepSeek-blocked-on-Apple-and-Google-app-stores-in-Italy
Trump’s commerce secretary pick vows to keep China from using US tech to ‘compete with us’
South China Morning Post
During his Senate confirmation hearing, Donald Trump's commerce secretary nominee Howard Lutnick emphasized the need to prevent China from using American technology, particularly Nvidia's semiconductor chips, to compete with the U.S. He proposed "across-the-board tariffs" to gain leverage against China and other countries, suggesting restrictions on chip exports and the hosting of AI models on Chinese servers. Lutnick expressed concern over the Chinese AI start-up DeepSeek and indicated that U.S. tariffs would be implemented strategically to address unfair trade practices. His approach aims to achieve reciprocity and improve the global trading environment for American products.
https://www.scmp.com/news/china/article/3296743/trumps-commerce-secretary-pick-vows-keep-china-using-us-tech-compete-us?utm_source=rss_feed
China’s top memory chip maker CXMT narrows tech gap with leaders Samsung, Hynix, Micron
South China Morning Post
ChangXin Memory Technologies (CXMT), China's leading DRAM chip producer, has achieved a significant technological advancement by developing a 16-nanometre manufacturing process, bringing it closer to global competitors like Samsung, SK Hynix, and Micron Technology. The new 16-gigabit DDR5 chip represents a leap in technology, with a storage density of 0.239Gb per square millimetre and memory cells 20% smaller than previous generations. Despite initial production challenges, CXMT has improved its yield rate from 20% to 80%. The report highlights that while CXMT has made notable progress, a technology gap of about three years still exists compared to its rivals, who are using 12nm and 14nm processes. The company's advancements are seen as a benchmark for China's DRAM industry amid ongoing US sanctions, although it still faces import restrictions on equipment. CXMT is also exploring future technologies, including sub-15nm chips and high-bandwidth memory for AI applications.
https://www.scmp.com/tech/tech-war/article/3296794/chinas-top-memory-chip-maker-cxmt-narrows-tech-gap-leaders-samsung-hynix-micron?utm_source=rss_feed
The Global Race for Humanoid Robots Heats Up
Foreign Policy
The recent emergence of DeepSeek-R1, a Chinese AI model that competes with OpenAI's offerings at a fraction of the cost, has caused significant turmoil in the stock market, erasing $1 trillion in U.S. stock values. This development highlights the intensifying technology race between the U.S. and China, which is expanding beyond AI models to include the development of humanoid robots. The CEO of Nvidia, Jensen Huang, envisions humanoid robots as a critical component of the company's future, with Elon Musk predicting that Tesla's humanoid robots could ultimately surpass the value of all its current offerings combined. Simultaneously, China's industrial policy is fostering a surge of start-ups focused on humanoid robotics.
Since 2022, advancements in generative AI have accelerated the progress of humanoid robots, evidenced by the debut of 27 new models at Beijing's World Robot Conference in 2024. Huang has introduced a foundational model designed specifically for controlling these humanoid robots, which, while not yet ready for widespread use, have started to perform tasks in environments like Amazon warehouses and automotive factories. Projections for the humanoid robot market suggest it could be worth $38 billion by 2035, with estimates of 648 million humanoid robots by 2050. The potential for humanoid robots lies in their ability to navigate human-centric environments and utilize tools designed for human use.
As the U.S. and China compete in the humanoid robot sector, each country possesses unique strengths. China excels in manufacturing at scale, having dominated various key markets, while the U.S. leads in cutting-edge technology development at companies like Nvidia. However, the recent advancements from China underscore the need for the U.S. to bolster its own manufacturing capabilities and maintain its research advantages. Increased awareness and understanding of the competition are vital for U.S. policymakers, who must balance the implications of this race with domestic concerns while implementing strategies to support emerging technologies. Ultimately, the development of humanoid robots represents a significant shift, as AI begins to transition from the digital realm into practical applications in the physical world.
https://foreignpolicy.com/2025/01/30/humanoid-robots-united-states-china-competition/
DeepSeek Is Reshaping China’s AI Landscape
Foreign Policy
On January 20, 2024, Chinese AI lab DeepSeek made waves in the global AI landscape with the release of its "R1" model, which is touted as one of the top AI models worldwide, second only to OpenAI's o1. The model was praised by notable figures such as former Intel CEO Pat Gelsinger, who called it a “world-class solution.” DeepSeek has a history of innovation, having previously disrupted the market with its open-source V2 model in May 2024, which offered competitive performance at drastically lower pricing, and its V3 model in December 2024, which outperformed several major competitors.
The rapid advancements in AI by Chinese firms, exemplified by DeepSeek, are reshaping the competitive landscape with the U.S. As the AI sector in China accelerates, it reflects a broader trend where companies like Xiaomi and Meituan are integrating AI into their operations. Industry insiders indicate that it is becoming increasingly common for firms to develop their own AI models in-house. This trend is not only driven by market potential but also by supportive government initiatives, such as the Bank of China's recent commitment to invest heavily in AI infrastructure.
The emergence of DeepSeek and its innovative models signal a narrowing gap between U.S. and Chinese capabilities in AI. While U.S. export controls have attempted to limit China's access to advanced technologies, they have simultaneously accelerated Chinese innovation and collaboration within the domestic AI industry. Experts suggest that the U.S. strategy may need reevaluation, emphasizing the need for domestic innovation and competitive measures to ensure that the U.S. maintains its technological lead in AI. The developments in China are prompting U.S. policymakers to consider a more proactive approach to bolster the country's AI competitiveness in the face of growing global competition.
https://foreignpolicy.com/2025/01/29/deepseek-china-ai-chatgpt-stocks/
OpenAI alleges evidence China's DeepSeek used its model for training
Nikkei Asia
OpenAI has alleged that Chinese AI startup DeepSeek may have used its proprietary models to train its own competing model, potentially breaching intellectual property laws. OpenAI noted signs of "distillation," a technique where smaller models learn from larger ones, to enhance performance at reduced costs. Concerns arose after DeepSeek's release of its R1 reasoning model, which achieved notable success. OpenAI and Microsoft previously blocked DeepSeek's access for suspected violations. Industry experts highlight the common practice of using outputs from established AI models, complicating efforts to safeguard intellectual property. OpenAI is also facing copyright infringement lawsuits from various content creators.
https://asia.nikkei.com/Business/Technology/Artificial-intelligence/OpenAI-alleges-evidence-China-s-DeepSeek-used-its-model-for-training
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