How Savvy Companies Are Using Chinese AI

OpenAI’s November 2022 launch of ChatGPT caught Chinese technology companies completely off guard. Overnight, firms like Alibaba, Tencent, and Baidu, once competitive with global players like Google and Microsoft, had become laggards. But nearly three years later, Chinese companies have more than caught up to their U.S. rivals: They have forged a new parallel path with generative AI. DeepSeek, which was founded in 2023, is perhaps the most notable of the Chinese entrants in the AI space. In less than a year, and with a fraction of the computing and data resources of U.S. models, DeepSeek-R1 is performing comparably to OpenAI’s GPT-4o and Anthropic’s Claude 3.5 Sonnet. Another startup, 01.AI, has launched the Yi-Lightning model, which rocketed up the leaderboard in terms of price, performance, and accuracy. But what’s emerging in China isn’t a clone of Western systems. It’s a strategically distinct model of gen AI, adapted to thrive under different constraints and to meet different priorities. Firms such as DeepSeek are leveraging foundational advances while engineering distinct AI systems designed for cost-efficiency, rapid deployment, and targeted applications.