The Chinese AI Companies Poised to Rival DeepSeek’s Impact

DeepSeek’s recent AI breakthrough sent shockwaves through global markets, shaking Silicon Valley and challenging U.S. tech dominance. The company’s release of a model that rivals OpenAI’s O1—at a fraction of the cost—triggered panic among investors, causing Nvidia to suffer an unprecedented $500 billion market value loss in a single day.

Former U.S. President Donald Trump called DeepSeek’s rise a “wake-up call,” while in China, its founder Liang Wenfeng has been celebrated as a national hero, even receiving an invitation to a symposium chaired by Premier Li Qiang. This rapid progress underscores China’s growing prowess in AI, despite U.S. restrictions on advanced technology. But DeepSeek is just the beginning—several other Chinese AI firms are emerging as serious contenders on the global stage.

Alibaba Cloud made waves on January 29 by launching Qwen 2.5-Max, an upgraded version of its Qwen AI model. The timing, coinciding with China’s Lunar New Year holiday, was seen by some analysts as a sign of mounting pressure within the domestic market following DeepSeek’s success. According to Alibaba Cloud, Qwen 2.5-Max outperforms both DeepSeek V3 and Meta’s Llama 3.1 across 11 AI benchmarks. The company remains bullish, expressing “full confidence” in its next iteration.

Zhipu, a Beijing-based AI startup backed by Alibaba, has also entered the spotlight. Dubbed one of China’s “AI tigers,” Zhipu made headlines not just for its technological advancements but for being blacklisted by the U.S. government in January over allegations of aiding China’s military with AI development. The company strongly denied these claims, calling them baseless. Despite the controversy, Zhipu continues to push forward, recently launching AutoGLM, an AI-powered assistant that enables users to control their smartphones using complex voice commands.

Moonshot AI, another Beijing-based startup valued at $3.3 billion, released its latest AI model, Kimi K1.5, on the same day DeepSeek unveiled R1. Founded in 2023, like DeepSeek, Moonshot AI has quickly risen to prominence. Its Kimi series made headlines for being the first AI assistant capable of processing 200,000 Chinese characters in a single prompt, a figure later upgraded to an astonishing 2 million characters. Experts believe Moonshot AI is closing in on DeepSeek’s capabilities, with some predicting that its next model could match or even surpass its rival’s performance within months.

ByteDance, the parent company of TikTok, also made a major AI announcement on January 29 with the launch of Doubao-1.5-Pro. The company claims its latest model outperforms OpenAI’s O1 in select benchmarks, and perhaps most notably, ByteDance is aggressively undercutting its U.S. competitors on price. Doubao’s most powerful version costs just 9 yuan per million tokens—nearly half the price of DeepSeek-R1 and significantly cheaper than OpenAI’s O1, which charges the equivalent of 438 yuan for the same usage.

Tencent, best known for its dominance in gaming and its ubiquitous WeChat messaging app, has also entered the AI race. The company’s flagship model, Hunyuan, is a text-to-video generator that Tencent claims matches the performance of Meta’s Llama 3.1—while requiring only a fraction of the computing power used to train Meta’s model.

With China’s AI industry advancing at a breakneck pace, it’s clear that DeepSeek is not an outlier but a harbinger of things to come. U.S. policymakers and tech leaders who focus solely on countering DeepSeek may find themselves blindsided by the broader wave of Chinese AI innovation that is already reshaping the global landscape.

Team Sunday Times