Before DeepSeek shook up the tech world and put Chinese artificial intelligence on the map, Wu Chenglin’s own startup had nearly folded three times – but in the past year it has raised $30mn. The January 2025 release of a low-cost generative AI model from DeepSeek that performed at a similar level to ChatGPT and other top American chatbots upended assumptions of US dominance in the sensitive sector.The breakthrough has galvanised China’s AI scene, despite hurdles posed by rivalry with the United States, and fears of a global market bubble. “It gave a lot of people confidence” that China’s AI community previously lacked, Wu told AFP. His venture DeepWisdom, whose flagship product is a platform for AI-powered software development, had struggled to stay afloat despite its popularity among programmers.But as excitement around DeepSeek fuelled a boom in spending, Wu raised 220mn yuan in two funding rounds. Meanwhile, Shi Yaqiong and her team at Beijing-based Jinqiu Capital have closed deals with more than 50 AI firms over the past 12 months. Shi, the fund’s vice-president, described a “clear surge” in enthusiasm around Chinese AI and competition among investors since the DeepSeek shock. “The kind of projects with an initial valuation in 2024 of $10-20mn were, in 2025, expected to have initial valuations around $20-40mn,” she said.Shares in two leading Chinese AI startups, Zhipu AI and MiniMax, soared on their market debuts in Hong Kong this month. Frenzy over the much-hyped potential of AI to change the world is driving global stocks to record highs, led by chipmakers and tech giants. But the big-spending euphoria has sparked fears of a market crash, with many investors hyper-focused on any sign the AI bubble could burst, and questioning when new companies will become profitable.Access to top-end chips made by US giant Nvidia is also restricted in China under White House policies designed to curb China’s technological development. But that hasn’t dampened the spirits of young developers in the world’s second largest economy.At an AI networking event held on a brisk winter afternoon last week in a stylish Beijing cafe, animated discussion filled the air about the future of the fast-moving industry. Chip export controls mean Chinese AI is more likely to be “open-source and cheap” which could make it more useful to society, said one participant, entrepreneur Li Weijia.China is often said to enjoy an “engineer dividend” that benefits its AI sector, and talent is flocking to the field. Online hiring platform Zhilian Zhaopin reported a 39 percent increase in applications to AI-related jobs in the first three quarters of 2025, after DeepSeek’s breakout.“China has a huge application developer ecosystem and people are very good at building apps,” Shen Qiajin, founder of ideaFlow, told AFP. “But for a very long time, we didn’t have a good cost-efficient model,” he said. That is a gap DeepSeek has now filled.The firm began in 2023 as a side project of a data-driven hedge fund co-founded in the tech hub Hangzhou by Liang Wenfeng, which had access to a cache of powerful Nvidia processors.Today, the company – expected to release its next AI model within weeks – holds four percent of global market share for chatbots, according to web traffic analysis company Similarweb.ChatGPT dominates at 68 percent while Google’s Gemini is catching up at 18 percent, Similarweb estimates. DeepSeek’s decision to make its systems’ inner workings public, in contrast to the closed AI models sold by OpenAI and other Western rivals, has boosted adoption of its tools by developers and businesses, Neil Shah at Counterpoint Research said.Its tools have had “strong adoption in cost-sensitive emerging markets”, he said.But in the West users are more cautious, “primarily on account of privacy and national security concerns”. Even so, the domestic market is huge. By June 2025, more than half a billion Chinese Internet users reported having used generative AI products, according to the China Internet Network Information Center.Entrepreneur Yang Yiwen said her parents had their first meaningful encounter with AI during last year’s Chinese New Year, when they watched her use DeepSeek to plan a family trip.“They found it quite fun,” she said. — AFP

The US and Taiwan clinched a ‌trade deal on Thursday that cuts tariffs on many of the semiconductor powerhouse’s exports, directs new investments in the US technology ‌industry and risks infuriating China. The deal deepens ‍the Trump administration’s ties with Taipei at a critical time as China ratchets up pressure on the island, which it views as its own, and Washington has worked to avoid an all-out trade war with Beijing.Under the long-negotiated deal, Taiwanese chipmakers like TSMC that expand US production will be charged a lower tariff on semiconductors or related manufacturing equipment and products they import into the US and ‍can import some duty-free. Broad tariffs that apply to most other Taiwanese exports to the US will fall from 20% to 15%.Generic pharmaceuticals, aircraft components and “unavailable natural resources” will face a 0% tariff, the Commerce Department said. The US also committed that Taiwan will be treated no worse than anyone else should chips tariffs be increased later, according to Taiwan.In exchange, Taiwanese companies will invest $250bn to increase production of semiconductors, energy and artificial intelligence in the US. That includes $100bn already committed by TSMC in 2025, with more to come, according to US Commerce Secretary Howard Lutnick.Taiwan will also guarantee an additional $250bn in credit to facilitate further investment, the Trump administration said. Lutnick said in an interview on ‌CNBC that the objective was to bring 40% of Taiwan’s entire chip supply chain and production to the US. He said that if they did not build in the US, the tariff was likely to be 100%.The boost in chip production will likely provide more business for TSMC’s ‍major suppliers, including major chip manufacturing toolmakers such as ASML, Lam Research and Applied Materials. It ‌should also provide a boost to smaller suppliers of chemicals and materials, such as Sumitomo Corp and DuPont spinoff Qnity Electronics. Many of those firms have long had a presence in Arizona due to Intel’s major operations there, but they have expanded facilities with TSMC’s arrival in the state, where it is enlarging an existing manufacturing plant.Shares of chip company Nvidia, which depends on TSMC for manufacturing, rose more than 2%, keeping most of its gains from earlier in the day. Intel shares were modestly lower. Depository receipts and shares of ASML, Lam, Applied Materials and Qnity rose about 4% to 6%.Washington has grown increasingly impatient with its reliance on computer chips from abroad, especially an island in China’s sights. Semiconductors were invented in the US, many are designed there and it remains a top importer of them for everything from consumer gadgets to AI chatbots and advanced weaponry. But many of the most cutting-edge chips are manufactured abroad, especially in Taiwan. Intel and South Korea’s Samsung Electronics are also expanding US production capacity. TSMC announced its Arizona factory in ​2020, during US President Donald Trump’s first term, and ‌expanded it under his Democratic successor Joe Biden.As it expands further, TSMC risks overspending on a high-flying industry, running into labour and skill shortages, navigating tricky politics around foreign worker immigration and shifting business away from Taiwan at a time of immense geopolitical vulnerability for the island.China ‍views Taiwan as its own territory, a position Taipei rejects. Washington has formal diplomatic ties with Beijing, but maintains unofficial relations with Taiwan and is the island’s most important arms supplier. “Look, they need to keep our president happy, right,” said Lutnick told CNBC, referring to Taiwan. “Because our president is the key to protecting their country.”Under the agreement, chipmakers that expand in the US will be able to import up to 2.5 times their new capacity of semiconductors and wafers with no extra tariffs during an approved construction period. Preferential treatment will apply to chips that ​exceed that quota. Dan Hutcheson, vice-chair of technology analysis firm TechInsights, said the deal was likely to drive higher demand in the chipmaking supply chain as Taiwanese firms build US operations. — Reuters