China’s tech leap challenges US dominance through innovation. But unregulated competition increases the risk of catastrophe

Eight years ago, Vladimir Putin proclaimed that mastering artificial intelligence (AI) would make a nation the “ruler of the world”. Western tech sanctions after Russia’s invasion of Ukraine should have dashed his ambitions to lead in AI by 2030. But that might be too hasty a judgment. Last week, the Chinese lab DeepSeek unveiled R1, an AI that analysts say rivals OpenAI’s top reasoning model, o1. Astonishingly, it matches o1’s capabilities while using a fraction of the computing power – and at a tenth of the cost. Predictably, one of Mr Putin’s first moves in 2025 was to align with China on AI development. R1’s launch seems no coincidence, coming just as Donald Trump backed OpenAI’s $500bn Stargate plan to outpace its peers. OpenAI has singled out DeepSeek’s parent, High Flyer Capital, as a potential threat. But at least three Chinese labs claim to rival or surpass OpenAI’s achievements.

Anticipating tighter US chip sanctions, Chinese companies stockpiled critical processors to ensure their AI models could advance despite restricted access to hardware. DeepSeek’s success underscores the ingenuity born of necessity: lacking massive datacentres or powerful specialised chips, it achieved breakthroughs through better data curation and optimisation of its model. Unlike proprietary systems, R1’s source code is public, allowing anyone competent to modify it. Yet its openness has limits: overseen by China’s internet regulator, R1 conforms to “core socialist values”. Type in Tiananmen Square or Taiwan, and the model reportedly shuts down the conversation.