China Surpasses US in AI Race with DeepSeek’s Rise in Global Markets

TLDR

• Microsoft President Brad Smith highlights China’s rapid rise in the AI race, especially in Africa, Russia, and Belarus.
• DeepSeek’s AI model R1 has gained significant market share in regions where American firms have limited reach.
• China’s open-source AI models offer affordable solutions that are attracting users in countries with high tech costs.
• Microsoft warns that the AI divide between the global north and south is growing, with China leading the way in the global south.
• DeepSeek’s success is fueled by government subsidies and low-cost offerings that allow it to undercut American competitors.

Microsoft President Brad Smith has highlighted China’s rising dominance in the AI race, particularly in markets like Africa, Russia, and Belarus. He pointed out that Chinese firms are outpacing American companies, benefiting from government subsidies and open-source models. This shift in the global AI landscape is evident in the rapid rise of China’s AI company, DeepSeek.

China’s AI Growth in Key Global Markets

Chinese tech company DeepSeek has surged ahead, especially in regions where American firms have limited presence. According to Microsoft, DeepSeek’s AI model, R1, dominates markets like Belarus, Cuba, and Russia. The model holds 56% of the market in Belarus, 49% in Cuba, and 43% in Russia.

DeepSeek’s success can be attributed to the company’s low-cost offerings and government support. These factors allow Chinese firms to undercut American competitors, who often rely on paid subscriptions and closed ecosystems. In addition to this, China’s open-source AI models make it easy for users in regions like Africa to access AI tools without the constraints of expensive subscriptions.

DeepSeek’s Rise in Africa

The AI model R1 has also made significant inroads in Africa, where many nations face high costs for access to technology. In countries like Ethiopia and Zimbabwe, DeepSeek has captured 18% and 17% of the market, respectively. These numbers are expected to grow, as the affordability and accessibility of China’s open-source AI tools remain attractive to many users.

Brad Smith acknowledged the growing AI divide between the global north and south, with usage rates much higher in wealthier regions. He warned that if the U.S. does not step up its investments in AI infrastructure, this gap will continue to widen. According to Smith, private capital alone will not be enough to compete with China’s state-backed AI initiatives.

The Competitive Edge of China’s AI Models

China’s success in the AI field is largely driven by the low-cost nature of its offerings, which are powered by subsidies. Microsoft’s data points to how China’s DeepSeek has quickly gained traction in markets traditionally dominated by American companies. The global south, in particular, has benefited from China’s open-source AI tools, as they are more affordable and easier to access compared to paid models from U.S. tech firms.

In response, Microsoft has called for increased public and private investment to compete with China’s growing influence. Smith emphasized the need for international development banks and lending institutions to assist with funding AI-related infrastructure. Without this support, the growing AI divide between the global north and south will only continue to increase.

The post China Surpasses US in AI Race with DeepSeek’s Rise in Global Markets appeared first on CoinCentral.