The launch of the new Chinese open-source artificial intelligence (AI) model by DeepSeek in late January has created a stir in the global IT community and among political circles. It marked significant changes in the distribution of power and technology globally. US President Donald Trump even said that DeepSeek “should be a wake-up call” for America’s tech businesses while the global debates on the ramifications of Chinese AI-powered chatbots are still raging [Ingram, 2025]. Against this background, the paper explores the factors that helped such a breakthrough to arise.
DeepSeek is an open-source large language model (LLM) that claims low training costs and low computing power used in comparison to the leading American analogues, such as Open AI’s GPT-4o. It was developed by a Zhejiang-based start-up amid restrictions on the use of Nvidia chipsets imposed by the US. By introducing a more cost- and energy-efficient approach with alternative chips, it challenges the so-called ‘AI arms race’, a competition between global tech giants, primarily from the US, for global AI dominance. It also raises security concerns for American officials, who have long been worried about the security implications of Chinese technology, leading to bans on Huawei and TikTok.
Technological supremacy has long been acknowledged as a crucial element of great power status, instrumental in maintaining economic strength, military capabilities, and geopolitical influence. The capacity for leading, shaping, and controlling technical developments is essential for maintaining great power status. Therefore, the introduction of the sophisticated AI-powered chatbot by the Chinese company signals not only China’s step forward in becoming one of the most advanced technological powers but also its success in developing conditions that align with the country’s geopolitical ambitions. It also reflects the concerns of many in the West—China’s technological advancement threatens the position of the Western market in the global high-tech industry and risks shifting the AI market from the US and Europe to Asia and China in particular.
China’s stake in global AI supremacy is well-grounded. It has already secured the top position in AI-related patents, research papers, and citations [Khanal, et. al., 2025]. China’s AI industry exceeds $70 billion, with over 4,300 companies working on AI with further plans to reach $140 billion by 2030 [WEF, 2025].
At the state level, China’s State Council in July 2017 defined a Next-Generation Artificial Intelligence Development Plan with three strategic objectives for 2020, 2025, and 2030. In particular, the plan outlined a progressive vision for AI development: reaching a globally advanced level by 2020, achieving major theoretical breakthroughs by 2025, and establishing itself as the world’s leading AI innovation hub by 2030, driven by advanced theories, technologies, and applications. The plan also seeks to build world-class AI infrastructure, foster a dynamic innovation ecosystem, and establish top-tier training centers to cultivate talent and drive breakthroughs. It also emphasizes the development of comprehensive rules and regulations for AI technology creation [State Council, 2017]. In line with the plan, in 2017, the Chinese government launched the National New Generation AI Innovation and Development Pilot Zone, aimed at fostering major AI innovations and formulating rules and policies for developing advanced AI technologies. In 2022 and 2024, the Chinese government issued detailed guidelines to accelerate the development of the national AI industry. These measures were followed by massive investments in the AI sector at national and local levels.
Before AI was defined as a separate strategy, its core elements were outlined in the Made in China 2025 plan, released in 2015, followed by the Internet Plus Action Plan 2015 and AI Three-Year Activities and Implementation Program in 2016. In October 2018, during a Politburo session on AI, Xi Jinping stressed the need for China to attain world-leading levels in AI technology while reducing its reliance on foreign sources for critical technologies and advanced equipment [Allen, 2019]. This was further underlined at the Two Sessions of China’s People’s Congress in March 2024 in the Government Work Report: accelerating digital transformation by integrating AI across all spheres of the economy is a top priority [Omaar, 2024].
As part of this goal, Beijing was designated as China’s prime AI hub. According to the Implementation Plan for 2023–2025, the city must advance to a new stage of development by 2025 and establish itself as an AI innovation hub with global influence [Beijing Municipality, 2023]. There, the prestigious Tsinghua University, along with the Chinese Academy of Sciences, has been established as a key AI innovation hub. Tsinghua University is home to leading AI startups such as Zhipu AI, Baichuan AI, Moonshot AI, and MiniMax—all created by Tsinghua University’s academics and alumni. Worth mentioning, those start-ups are China’s AI “unicorns” valued at over $1 billion, challenging the American tech giants.
Meanwhile, the Chinese Academy of Sciences produces the largest number of AI patents and is key to advancing AI research [Omaar, 2024]. Efforts of these and other institutions and private companies allowed Beijing to become central in global AI research, not just domestically but also internationally, housing the largest number of AI scientists and nearly 30% of the AI enterprises in China [AlShebli, 2022].
Besides Beijing, Shanghai and Shenzhen closely follow ambitions to become global AI hubs. At the provincial level, according to the research by Khanal, et. al. [2025] some administrations, such as those in Guangdong province, aim to strengthen their position in the global AI market. Meanwhile, certain provinces focus on specific AI fields not necessarily with global ambitions, including Tianjin, Anhui, Hubei, Fujian, Guangxi, Hunan, Jiangsu, Liaoning, Shaanxi, Sichuan, and Zhejiang. Others, such as Yunnan, Gansu, Chongqing, Guizhou, Heilongjiang, Henan, Jiangxi, Jilin, and Qinghai, are working at the regional level, often concentrating on cross-border services. In contrast, provinces like Shandong, Hainan, Hebei, Inner Mongolia, Ningxia, Tibet, and Xinjiang have not specified their AI development plans [Khanal, et. al., 2025].
China’s breakthrough in AI was possible in addition to state support in strengthening the capacity of scientists and innovators. In April 2018, China’s Ministry of Education launched its AI Innovation Action Plan for Colleges and Universities, as well as a new five-year AI talent training program to train 500 more AI instructors and 5,000 more top students at top Chinese universities [Allen, 2019]. At present, at least 535 universities in China offer AI-related majors [WEF, 2025]. These efforts have led to a surge in talented AI scientists and specialists. China is a global leader in producing top-tier AI researchers, ranking first in AI research paper output, highly cited AI papers, and AI patents, while holding the second-largest AI talent pool [Allen, 2019]. China obtained the highest number of AI patents between 2013 and 2022, with the figure continuing to grow exponentially. Studies indicate that China produced 47% of the world’s top-tier AI researchers, while another analysis estimated that Chinese elite AI researchers account for 26%, compared to 28% from the United States [Omaar, 2024].
China’s AI initiatives are built both on state support and private sector innovations. Although Chinese AI companies have faced criticism for depending more on government funding than private-sector innovation, this gap is steadily closing. While the state venture capital funds have poured around $912 billion into early-stage AI startups during the last decades, there are already over 4,500 private AI companies in China, which is equal to 15% of the global share. Hence, while state support remains significant, private-sector contributions to China’s AI sector are also substantial [Astro Awani, 2025]. There is also growing interest in foreign investments, with Saudi Arabia’s Aramco as an exemplary case [Omaar, 2024].
On the hardware, China has been under sanctions imposed by the United States since October 2022 and cannot purchase advanced semiconductors and AI chips from leading chipmakers such as Nvidia. While the U.S. claimed that restrictions would prevent China from accessing cutting-edge AI capabilities, they instead spurred heavy Chinese investment in AI and semiconductor technologies. Chinese companies are pivoting to developing their own technologies to reduce reliance on U.S. firms [Astro Awani, 2025]. The launch of DeepSeek exemplifies the success of Chinese start-ups in this effort.
Overall, the strong reaction to the introduction of DeepSeek AI assistant underscored the well-substantiated concerns of the Western tech industry—China has effectively equipped and committed to succeed in the global ‘AI arms race’. As China’s neighbor and the most digitized economy in Central Asia, what potential benefits can Kazakhstan derive from this development?
Kazakhstan’s government is also leveraging China’s advancements in AI and robotics. Notably, in February 2025, the Ministry of Digital Development, Innovations, and Aerospace Industry, along with Qazaqstan Investment Corporation, signed a Memorandum of Understanding with ewpartners—a private investment company specializing in the Gulf states—and AgiBot, a leading Chinese AI and robotics company. This agreement aims to position Kazakhstan as a key innovation hub for advanced robotics and AI, serving as a strategic link between China, the Middle East, and Central Asia. It is expected that Chinese robotics start-up AgiBot will establish a joint venture and R&D center in Kazakhstan, accelerating robotics innovation and Industry 4.0 applications [Ewpartners, 2025]. Apart from that, the National Academy of Sciences under the President of Kazakhstan signed a memorandum with Zhejiang University of Technology to establish an International Joint Laboratory for Spatiotemporal Artificial Intelligence and Sustainable Development. The laboratory aims to focus on leveraging AI and GIS technologies for water resource management, developing early warning systems for natural disasters, and using AI-driven data analysis to predict environmental changes [Tengrinews.kz, 2025]. These efforts align with Kazakhstan’s strategy to advance in AI technologies. The opening of the International Center for Artificial Intelligence Alem.ai in Astana this year is expected to unite state and private sector efforts in advancing AI development [Informburo.kz, 2025]. Leading Chinese AI companies can also benefit from Kazakhstan’s inroads in AI to enhance the dissemination of Chinese AI experience in Central Asia.
References:
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AlShebli, Bedoor, Cheng, Enshu, Waniek, Marcin, Jagannathan, Ramesh, Hernández-Lagos, Pablo and Talal Rahwan (2022). Beijing’s central role in global artificial intelligence research. Scientific Reports volume 12, 21461.
Astro, Awani (2025). DeepSeek: How China’s embrace of open-source AI caused a geopolitical earthquake. Retrieved from https://international.astroawani.com/global-news/deepseek-how-chinas-embrace-opensource-ai-caused-geopolitical-earthquake-508668. Accessed on 14.02.2025.
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Note: The views expressed in this blog are the author’s own and do not necessarily reflect the Institute’s editorial policy.