What China Does Not Want the U.S. to Know

A leaked call with DeepSeek’s CEO, Liang Wenfeng, offers a perspective on China’s AI landscape, highlighting resource limitations, especially compute power, as the main disadvantage compared to the U.S. Despite this, the CEO believes China’s talent pool is comparable and that the country can excel in efficiency and product development, potentially playing a major role as a global producer in the AI sector.

• DeepSeek’s CEO identifies resources, specifically compute power, as China’s most significant gap with the U.S. in AI development.
• The CEO believes the talent gap is minimal, with the perceived difference stemming from fewer experimental opportunities due to limited compute.
• China’s largest models are an order of magnitude smaller than U.S. counterparts, requiring vast numbers of domestic or foreign GPUs for training.
• Huawei’s limited production and lower capital investment hinder China’s ability to train large-scale models.
• The CEO suggests Chinese AI companies will likely focus on cost-effectiveness and product development, potentially becoming major global producers.
• There is optimism regarding domestic chip development, with Huawei’s capabilities potentially rivaling NVIDIA’s, albeit with a time lag.
• DeepSeek prioritizes reasonable returns over maximizing profit, aiming for cost efficiency in services.
• China’s AI development is estimated to be 1-2 years behind the U.S. in some aspects but uses significantly less compute.
• The CEO foresees no upper limit to language model scaling and emphasizes the future inevitability of embodied intelligence.
• High-cost data labeling, a U.S. strength, is a challenge for China due to capital structure limitations, with a focus on labeling lower-cost data.
• The most reasonable approach for China seems to be focusing on general AI Agents, with Coding Agent as a top priority.
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