China is catching up rapidly in artificial intelligence (AI) capabilities and other AI-related areas, overtaking the United States. According to industry analysts, Chinese AI models are more than just keeping pace-often outperforming those in the West. This comes amid tensions between the two nations, with the technology being seen by both as a strategic asset.
The US has also limited access to advanced chips, which China uses to develop AI, in the name of national security. In retaliation, Beijing has been more interested in creating open-source technology, high-performance software, and domestic chip designs that keep its AI on track.
Emergence of Chinese Large Language Models (LLMs)
Chinese tech giants Alibaba and innovative startups like DeepSeek are leading the charge in producing large language models. According to CNBC, these vast datasets are being used in applications such as chatbots and natural language processing.
Unlike OpenAI in the US, many Chinese companies are using an open-source approach. For example, Alibaba's Qwen AI model has become one of the most downloaded LLMs in the world because it allows companies to use it without complex legal constraints, which is possible with its flexible licensing.
DeepSeek has also gained recognition through its R1 model, competing head-on with OpenAI's reasoning-focused models. These advances point out China's rise in AI dominance.
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Open Source as China's Strategic Advantage
Open-source technology is the cornerstone of China's global AI strategy. The Chinese companies make models accessible in order to induce innovation and build a developer community across the globe. This not only propels the progress of technology but also puts China on the map, so to speak, globally.
"Chinese companies would like to see their models used outside of China, so this is definitively a way for companies to become global players in the AI space," Paul Triolo, a partner at global advisory firm DGA Group, told CNBC via email.
Beating US Chip Bans
Training large AI models requires tremendous computing power, which is usually built on high-end GPUs designed by Nvidia. But US export controls have so far restricted China's access to these high-end chips.
To these effects, Chinese companies stockpile Nvidia GPUs and invest greatly into alternatives in the domestic landscape. Top players like Huawei, Baidu, and Alibaba take the lead in pushing forward high-performance chips so AI progress will not be stalled despite international barriers.
China Sees LLMs as Important AI Component
Chinese companies view LLMs as the foundation of future tech ecosystems. These models are expected to drive the next wave of applications, from accelerating scientific research to reshaping industries.
The competition between U.S. and Chinese AI ecosystems mirrors past battles between operating systems like Windows and iOS. The winner could dominate the digital industry, influencing global markets and user behavior for years to come.
While US sanctions are hard to breach, China stands strong as it focuses more on open-source models and domestic innovation, which keeps it as one of the biggest AI powers in the world. The world is waiting to see if China will live up to the hype of surpassing its Western rivals—or if it's just another word of mouth.
In other news, the South China Morning Post reports that Zhipu AI, a Chinese startup raised $412 million in a new funding series. Although the valuation is not disclosed, the previous value hit 20 billion yuan sometime in September.
