DeepSeek's rise exposes Korea's AI shortcomings

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DeepSeek's rise exposes Korea's AI shortcomings

China’s rising AI startup, DeepSeek, has sent shock waves across the globe. Founded in May 2023 in Hangzhou, this company made headlines on Jan. 22 when it launched DeepSeek-R1, an open-source AI model that boasts both high performance and low cost. Some industry experts claim that in certain benchmark tests, it has even outperformed OpenAI’s ChatGPT. More strikingly, DeepSeek’s mobile AI chatbot application surpassed ChatGPT to claim the top spot in downloads on Apple’s App Store in the United States, stunning the global tech community.
 
Yet, what is even more astonishing than its cost efficiency and performance is that it appears to have effectively circumvented U.S. semiconductor and AI technology restrictions. This development raises serious questions about the efficacy of Washington’s regulatory efforts in curbing China’s AI advancements.
 
Equally noteworthy is the background of DeepSeek’s founder, Liang Wenfeng. At just 40 years old, Liang is a homegrown talent with no foreign education or experience. Born in Guangdong Province, he studied computer science at Zhejiang University. In 2015, along with two university classmates, he founded a hedge fund that leveraged deep-learning AI techniques for algorithmic trading, eventually amassing assets worth $8 billion. His story underscores the robustness of China’s innovation and startup ecosystem, to the point where it is now capable of replicating Silicon Valley’s legendary success stories within its own borders.
 
The impact of DeepSeek’s emergence was immediately felt in U.S. financial markets. At one point, shares of Nvidia — the dominant supplier of AI-focused GPUs — plunged by as much as 17.7 percent.
 
Despite ongoing controversies surrounding technology appropriation and data security, DeepSeek’s rise is poised to significantly reshape global AI competition and market dynamics. AI is no longer a futuristic concept — it is already deeply embedded in our daily lives. Experts predict that by 2029, AI will surpass human intelligence in virtually all aspects, reaching what is known as the “technological singularity.”
 
At present, the AI industry is essentially a two-horse race between the United States and China. While Korea ranks somewhere between sixth and seventh globally, the gap between it and the leading nations remains vast. Concerns are growing that Korea will struggle to catch up with the United States and China in terms of computing power and data resources — both critical components for AI development.
 
The DeepSeek shock should serve as both a wake-up call and a source of hope for Korea. Reports suggest that DeepSeek possesses a GPU infrastructure comparable in scale to that of the entire nation of Korea. Meanwhile, Samsung Electronics — one of the world’s largest technology firms — is said to be investing only one-tenth of what DeepSeek is pouring into AI development. It is unrealistic to expect Korea to remain competitive without significant investment.
 
Fortunately, the cost of AI hardware — particularly GPUs — is decreasing at an exponential rate, with prices dropping to one-tenth of their previous levels each year. Although Korea has been slow to react, there are signs of progress. In April 2023, the government designated AI — along with biotechnology and quantum computing — as one of the country’s three major game changers for the future. In September, the National AI Committee was established, and just recently, Korea became the second country in the world to pass a comprehensive AI framework law.
 
However, the ongoing political turmoil surrounding impeachment proceedings has cast a shadow over these initiatives, leaving much in limbo. Now more than ever, Korea’s political leaders must recognize the urgency of the situation, while major corporations must commit to bold investments in AI. 
 
Translated using generative AI and edited by Korea JoongAng Daily staff.   
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