DeepSeek's Rise Highlights Korea's AI Challenges

The emergence of DeepSeek, a rising AI startup from China, has raised alarms regarding Korea's standing in the global AI landscape. Launched in May 2023 in Hangzhou, DeepSeek made significant headlines on January 22, 2024, with the introduction of its open-source AI model, DeepSeek-R1. This model is not only high-performing but also cost-effective, leading experts to suggest that it has outperformed established models like OpenAI's ChatGPT in certain benchmark tests. Moreover, DeepSeek's mobile AI chatbot application outshone ChatGPT, becoming the most downloaded app on Apple's App Store in the United States, surprising many in the tech world.

Perhaps even more remarkable than its performance is the way DeepSeek appears to have navigated around U.S. restrictions on semiconductor and AI technologies. This situation brings into question the effectiveness of Washington's efforts to limit China's advancements in the AI sector.

DeepSeek's founder, Liang Wenfeng, adds another layer of intrigue. At just 40 years old, he is a product of China's educational system, having studied computer science at Zhejiang University without any foreign experience. In 2015, he co-founded a hedge fund that applied deep-learning AI for algorithmic trading, accumulating assets worth $8 billion. Liang's story highlights the strength of China's innovation and startup ecosystem, which is now capable of generating success stories similar to those of Silicon Valley.

The impact of DeepSeek was felt immediately in the U.S. financial markets, with shares of Nvidia—a leading supplier of AI-focused GPUs—dropping as much as 17.7 percent at one point.

Despite ongoing debates regarding technology appropriation and data security, DeepSeek's rapid rise is likely to reshape global competition and market landscapes in AI. AI has transitioned from a futuristic vision to a part of everyday life. Experts predict that by 2029, AI will surpass human intelligence in almost all areas, achieving what is known as the "technological singularity."

Currently, the AI sector is dominated by a competition between the United States and China, with Korea falling somewhere between the sixth and seventh position globally. The disparity in capabilities, particularly in computing power and data resources necessary for AI development, raises concerns about Korea's ability to keep pace with its rivals.

DeepSeek's success serves as both a warning and inspiration for Korea. Reports indicate that the company's GPU infrastructure is comparable in size to that of the entire nation of Korea. In contrast, Samsung Electronics is reported to be investing only one-tenth of what DeepSeek is committing to AI technology. Without further significant investments, Korea faces challenges in remaining competitive.

On a positive note, the costs of AI hardware, particularly GPUs, have been decreasing rapidly, with annual prices dropping to about one-tenth of their previous levels. Though Korea has lagged in its response, there are signs of progress. In April 2023, the Korean government recognized AI, along with biotechnology and quantum computing, as one of its three primary future growth areas. The National AI Committee was formed in September, and Korea recently became the second nation to pass a comprehensive AI framework law.

However, the political unrest and impeachment proceedings occurring in Korea pose risks to these initiatives, leaving many plans in a state of uncertainty. It is crucial for Korea's political leadership to understand the urgency of this situation, while major firms must prioritize substantial investments in AI development.

AI, Technology, Investment