DeepSeek's Emergence Highlights South Korea's AI Challenges

DeepSeek, a rapidly growing AI startup from China, is creating waves in the tech industry worldwide. Founded in May 2023 in Hangzhou, DeepSeek gained significant attention after the launch of its open-source AI model, DeepSeek-R1, on January 22.

This new model has been reported to not only be highly efficient but also more affordable than many competing products. Some industry analysts even suggest that DeepSeek-R1 outperforms OpenAI's acclaimed ChatGPT in various benchmark tests. Furthermore, DeepSeek's mobile AI chatbot application recently climbed to the top of the download charts on Apple's App Store in the United States, surpassing ChatGPT and surprising technology experts.

What makes DeepSeek's success even more fascinating is how it seems to have navigated around U.S. restrictions on semiconductor and AI technologies. This raises important questions about the effectiveness of the U.S. measures aimed at hindering China's progress in AI.

The founder of DeepSeek, Liang Wenfeng, is particularly noteworthy. At just 40 years old, he is a product of China's domestic talent pool, having studied computer science at Zhejiang University without any overseas education. His entrepreneurial journey began in 2015 when he and his university peers founded a hedge fund that utilized deep-learning AI for trading, successfully growing their assets to around $8 billion.

Liang Wenfeng's success story underscores China's vibrant innovation landscape, demonstrating that the country is now capable of creating stories akin to those of Silicon Valley.

DeepSeek's entry into the market has already begun to impact the U.S. financial sectors, notably leading to a steep decline in Nvidia's stock prices, which fell by nearly 17.7 percent. Nvidia is known for being a key supplier of GPUs essential for AI applications.

Despite the ongoing debates about technology theft and data safety, the rise of DeepSeek is likely to reshape the competitive landscape of global AI and influence market dynamics significantly. Experts note that AI technologies are becoming an integral part of everyday life, with predictions suggesting that by 2029, AI could outpace human intelligence across various fields, marking what is known as the "technological singularity."

Currently, the AI space appears to be primarily contested between the U.S. and China. South Korea finds itself at a disadvantage, ranking around sixth or seventh in terms of global AI influence. Concerns are growing that South Korea will struggle to keep pace with the advancements in computing power and data resources critical for AI development.

The rise of DeepSeek serves as both an alarm and an inspiration for South Korea. Reports indicate that DeepSeek has built a GPU infrastructure that rivals the combined capabilities of South Korea. Interestingly, while major companies like Samsung Electronics are significant players in the tech industry, it is suggested that they are investing only a fraction—about one-tenth—of what DeepSeek is committing to AI advancements. Without substantial financial backing, it will be challenging for South Korea to maintain competitiveness.

On a positive note, the costs of AI-related hardware, particularly GPUs, are declining rapidly, with prices dropping significantly year over year. Although South Korea has been sluggish in aligning itself with current trends, there are signs of improvement. In April 2023, the South Korean government acknowledged AI, biotechnology, and quantum computing as pivotal areas for the future. By September, a National AI Committee was established, and shortly thereafter, South Korea became the second nation globally to implement a comprehensive AI regulatory framework.

However, ongoing political instability due to impeachment procedures has cast a shadow over these initiatives, leaving them uncertain. It is crucial now for South Korean political leaders to recognize the urgency of the current situation, while major corporations must be willing to invest boldly in the AI sector.

AI, technology, investment