BLUF: Developments in the AI Race

The dust has just begun to settle from the release of Chinese startup DeepSeek’s new revolutionary AI model, R1, which sent shockwaves through the tech community and rattled the U.S. stock market earlier in the week. The company claims to have created a model which decisively outperforms established AI models such as OpenAI’s popular ChatGPT, all while using less sophisticated hardware and at a fraction of the cost. 

The assertion is raising eyebrows from U.S. tech giants, including OpenAI CEO Sam Altman, Scale AI CEO Alex Wang, and Tesla CEO Elon Musk, who are suggesting that the Chinese company may not be telling the whole story. From the improper distillation of competitor data to a misrepresentation of the Nvidia H100 GPU  (powerful chips under U.S. export controls which are critical to advanced AI technologies) stockpile, there’s certainly more than meets the eye. 

Through a national security lens however, the move is classic CCP. Unlike here in the United States, China doesn’t have the same separation between industry and government. The CCP thus uses its total market control to divert resources, ingest data, and manipulate the global market. It’s not far-fetched to imagine the CCP using a similar tact with DeepSeek, to create a veritable Trojan horse for manipulation and theft under the guise of nextgen technology.

Regardless of the veracity of these claims, it is clear that China—through industry or through government manipulation—is trying to cement itself as a world leader in AI technologies and both U.S. industry and the U.S. government are taking note.

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