China shakes up the tech world: Donald Trump's AI problem

Frankfurter Allgemeine Zeitung China shakes up the tech world: Donald Trump's AI problem Gustav Theile • 3 hours • 2 minutes reading time It was Joe Biden's last day as President of the United States of America. His government had used the previous weeks to tighten the tech sanctions against China. Those responsible saw the mission of slowing down the economic, technological and military development of the People's Republic as successful. But on January 20, the day of Donald Trump's inauguration, a start-up from eastern China published an AI model - and with a week's delay, it became clear to the world: This model from Deepseek is a strong indication that Biden's sanctions were not successful, but are likely to backfire. Because Deepseek's AI model seems cheaper and cleverer than the models of its US competitors. Those who create scarcity strengthen the incentive to find new solutions By denying the People's Republic access to Nvidia's most modern AI chips, Biden has hindered China's development in the short term, but has also created tremendous pressure to innovate. Firstly, mentally: Anyone who goes to AI trade fairs in the Middle Kingdom can sense anger, frustration and an enormous now-more-than-ever mentality among the developers. People are putting in the effort and sacrificing a lot. There may be patriotism behind this, which is being incited by propaganda. But the sanctions are preparing fertile ground for propaganda. Secondly, Biden's pressure had a practical-economic effect: Those who create scarcity strengthen the incentive to find new solutions. In the West, AI developers mainly had to raise more money to buy the expensive, high-performance chips. The Deepseek team, on the other hand, had to find technical ways to keep up with US competitors despite limited computing power. Thirdly, Biden has incited China's government apparatus. The provinces are vying to become the new AI and semiconductor stronghold. China has shown how much power this can generate with its race to catch up in electric cars. President Trump will probably not be happy that more than a trillion euros in tech stock market value has just been wiped out under his leadership. He has shown that he is ready to reorient China policy. A small team from Hangzhou has just significantly worsened its hand in this geopolitical poker game.