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A phone showing the Nvidia logo appears against a backdrop of the DeepSeek logo. (Reuters/Yonhap)

The shock caused by Chinese artificial intelligence startup DeepSeek has lasted for more than a fortnight now. Behind the sudden appearance of DeepSeek’s AI model, which approaches the best in technical ability with minimal resources, is the Chinese authorities’ thorough preparation and sponsorship when it comes to the AI industry; the widespread nature of the existing AI ecosystem; and millions of talented engineers. 

Since taking power in 2012, Chinese President Xi Jinping has repeatedly spoken of the importance of AI technology. Xi made AI technology an official national agenda item in  October 2017, during the 19th National Congress of the Chinese Communist Party, when he began his second term. In his speech, Xi argued for a qualitative improvement in the Chinese economy, saying he would “promote further integration of the internet, big data, and artificial intelligence with the real economy.”

Three months earlier, in July, China’s State Council announced its plans for developing the next generation of AI technology. The plan stated three major objectives: China’s AI technology would be on par with global leaders by 2020. It would surpass global leaders to become the world’s best in 2025. By 2030, China would become the world’s best in overall technological prowess and application of AI. When DeepSeek was released on Jan. 20, China seemed to have achieved its second objective in the field of generative AI models.  

The announcement made by Xi and China’s State Council incited an AI boom so successful that AI was one of the most trending words used in Chinese media in 2017. Companies specializing in AI were founded left, right and center. According to data from Qichacha, a company that delivers analytics on Chinese companies, there were 1.67 million companies that dealt with AI as of the first half of 2024, with 88.6% (1.48 million) having been established after the State Council’s AI development plan in 2017. However, these numbers are not limited to companies directly involved in the development of AI technology, but include manufacturing companies that use AI technology and cloud computing providers.
 
China’s AI has also grown leaps and bounds in terms of quality. According to a Nikkei article published on Jan. 10, the top 10 institutions whose papers were accepted by major AI conferences all hail from the US and China, with six US institutions — Google, Stanford University, Microsoft etc. — and four Chinese institutions — Tsinghua University, Peking University, Zhejiang University and Shanghai Jiao Tong University.
 
A close look at the authors of the papers from the top 50 contributing institutions shows that 14,766 contributors were American while 8,491 were Chinese. While there are almost twice as many American authors as Chinese, the eightfold increase in Chinese researchers whose research papers were accepted over the past four years demonstrates that the gap is closing at a remarkable speed.
 
China harbors a steadfast telecommunication network which acts as a solid foundation for its AI technology to grow and has an overarching influence over the entire country. The daily lives of Chinese citizens rely heavily on smartphones, as people communicate with each other through social media, watch videos, shop online, call taxis, use online banking services and reserve restaurants online. The country is also rife with surveillance networks that utilize closed-circuit televisions and supervisory and control equipment that keep tabs on telecommunications. Telecommunication giants exist in every sector, such as Alibaba, Tencent, Baidu, JD.com and Didi Chuxing Technology, and are subject to strict governmental restrictions.
 
Advances in Chinese AI technology owe much to how the country puts the nation’s security and social stability above the privacy of individuals, as can be seen in the laws related to information security such as the Cybersecurity Law and the Network Data Security Management Regulations. While China, like every other country, strictly prohibits the abuse of personal information by companies, it makes an exception when it comes to issues related to national sovereignty and security. As China’s core AI technology became a national priority, the Chinese government likely played a key role in accumulating and utilizing relevant data.
 
The high level of importance placed on the science and technology sector in Chinese society is leading many students to pursue studies in the field. China sees millions of STEM graduates each year, but the number of STEM PhD graduates — key figures who drive research and development — in 2022 came to around 47,000, or 57% of the total number of PhD graduates (82,000). In 2021, Georgetown University in the US predicted that China would have around twice the number of PhD graduates in STEM fields than the US by 2025. 

By Choi Hyun-june, Beijing correspondent

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