DeepSeek's Rise and Korea's AI Challenges

In recent months, the AI landscape has been considerably altered by the advent of DeepSeek, a Chinese startup that is gaining global attention. Founded in May 2023 in Hangzhou, DeepSeek made headlines on January 22 after launching its DeepSeek-R1, an open-source AI model known for its impressive performance and affordability. Remarkably, some industry experts argue that this model has outperformed OpenAI's renowned ChatGPT in various benchmark tests. Adding to the surprise, DeepSeek’s mobile AI chatbot application topped the charts for downloads on Apple’s App Store in the U.S., surpassing ChatGPT.

However, what truly stands out is DeepSeek's apparent success in sidestepping U.S. semiconductor and AI technology restrictions. This raises important questions regarding the effectiveness of U.S. regulations meant to control China's advancements in AI technology.

Another intriguing aspect of DeepSeek is its founder, Liang Wenfeng. At just 40 years old, Liang has emerged as a significant figure in the tech world, possessing no foreign education or experience. He was born in Guangdong Province and earned his computer science degree from Zhejiang University. In 2015, he co-founded a hedge fund with two of his classmates, using deep-learning AI techniques for algorithmic trading, and they managed to accumulate assets worth $8 billion. His journey highlights the strength of China's burgeoning innovation and startup ecosystem, demonstrating that it can create success stories rivaling those of Silicon Valley.

DeepSeek's influence quickly rippled through the financial markets, particularly affecting U.S. stock prices. Nvidia, a leading provider of AI-focused GPUs, saw its shares plunge by as much as 17.7% following the news of DeepSeek's achievements.

Despite concerns over issues like technology appropriation and data security, the rise of DeepSeek is set to dramatically influence global AI competition and market dynamics. AI technology, no longer a concept of the future, is already interwoven into our daily routines. Experts predict that by 2029, AI could potentially surpass human intelligence across almost all fields, reaching a stage often referred to as the "technological singularity."

Currently, the AI sector is primarily dominated by two nations: the United States and China. In contrast, South Korea finds itself positioned around sixth or seventh globally, highlighting a significant gap in comparison to the leading countries. The escalating concern is that Korea may struggle to catch up to both the U.S. and China in crucial areas such as computing power and data resources, which are essential for AI development.

The emergence of DeepSeek should act as both a warning and a motivational signal for Korea. Reports indicate that DeepSeek's GPU infrastructure rivals that of all of Korea combined. In stark contrast, it is reported that Samsung Electronics, a major player in the tech industry, is investing only a fraction—about one-tenth—of what DeepSeek is allocating towards AI development. Therefore, expecting Korea to maintain competitiveness without substantial investments is unrealistic.

On a positive note, the cost of AI hardware, particularly GPUs, is decreasing at an astounding pace—with prices reportedly dropping to one-tenth of their previous levels each year. Although Korea has been slow to adapt, there are encouraging developments underway. In April 2023, the government officially identified AI, alongside biotechnology and quantum computing, as one of the three essential sectors for future progress. Following this, the National AI Committee was established in September, and Korea recently became the second country to enact comprehensive AI framework legislation.

Nevertheless, the ongoing political instability stemming from impeachment processes has threatened these initiatives, leaving them in an uncertain state. Presently, it is imperative for Korea's political authorities to grasp the urgency of this situation, while corporate giants need to commit to substantial investments in AI technologies.

AI, China, Korea