DeepSeek Sparks Tech Turbulence in China’s AI Ambitions | Image Source: table.media
SINGAPORE, 7 April 2025 – At a tense press conference on 3 March, Singapore authorities acknowledged that Nvidia chips manufactured in the United States had crossed the state of the city before landing in Malaysia. However, Malaysia cannot be the final destination of fleas. This subtle but powerful recognition has attracted the attention of China, a country currently under control for having been able to reverse American technological embargoes across Southeast Asia. And at the heart of this intertwined geopolitical drama is DeepSeek, a Chinese start-up of AI that is a miracle of lean innovation or a pawn in a well-written industrial narrative.
According to The Kobeissi Letter, Nvidia’s sales in Singapore have increased by 740% since DeepSeek was founded in July 2023. The boom triggered alarms in Washington, D.C., which led to an investigation into whether China acquires chips banned by indirect routes, such as Singapore and Malaysia. For the United States, it is not just commercial compliance, but the control of the future of artificial intelligence. And so to speak, DeepSeek could be Beijing’s main agent in this technological confrontation.
What is DeepSeek and why do eyebrows increase?
DeepSeek appeared almost thin in early 2024, presenting itself as China’s response to OpenAI and Google’s AI domain. Western media hastened to compare it to ChatGPT, referring to the figures provided by the company that claimed to have built a highly competitive artificial intelligence model with only $5.5 million in funding. The allegation raised eyebrows for a reason of vision: no external party could verify these figures. Despite this, the DeepSeek app has published local download graphics, a feat made considerably easier by China’s ban on Western AI services such as ChatGPT, Gemini, LLAMA and Mistral.
Beijing, generally hostile to Western narratives, suddenly began to quote the praises of the American media to strengthen DeepSeek’s profile. The strategy worked. The combination of censorship, state-supported marketing and the innovation aura has helped frame DeepSeek as a milestone in China’s AI autonomy movement. But as analysts begin to support diapers, the image of an elegant and economical AI empire begins to look like a card house.
Is DeepSeek a symbol of Chinese ingenuity or industrial extension?
DeepSeek’s launch coincided with the end of the “Made in China 2025” industrial policy, particularly the lunar New Year on January 29. Most of the parameters of this policy have been respected, including advances in robotics, drones and electric vehicles. However, AI remains a visible lagoon. DeepSeek emerged just in time to serve as a child in the poster for China’s efforts to catch up.
But the technological world is not so easily balanced. According to the reports in the table. In the media, China has raised huge subsidies to build a national network of data centres. However, these investments have not resulted in an energy advantage. More than one third of the world’s 500 most powerful data centres are located in the United States, while China hosts only 12%. Without enough IT infrastructure, the development of the truly forward-thinking AI remains an uphill battle – one that brilliant startups like DeepSeek can only temporarily obscure.
Why do venture capitalists retract from China?
The financial backbone of technological innovation – venture capital – is also moving away from China. According to the World Private Capital Association (GPCA), only $1.4 billion in QOL funds concentrated in China were raised in US dollars in 2024, a sharp decrease from the peak of $17.5 billion in 2022. This capital outflow reflects the investor’s concern about China’s economic slowdown, regulatory cracks on technology giants such as Alibaba and Tencent, and the global cooling of US-China relations.
Funds from the local currency QOL in China have improved, with 84% of the $9 billion raised. However, analysts argue that this change is not just about foreign immersion, but about a broader “decoupling” of global technological ecosystems. As Carlos Ramos of the GPCA Vega says, “there is a new game on capital efficiency in China.” DeepSeek, with his lean team and open source approach, fits well into this story, perhaps too good to be a game.
Is this the open source secret weapon to China?
While US companies such as OpenAI and Google are looking for high closed investment models, Chinese players such as Alibaba and DeepSeek adopt open source methodologies. DeepSeek’s release of its open source R1 model in January was a turning point. Previously, Chinese companies would have felt on the margins of AI’s global race. As indicated in the GPCA report, JP Gan of INCE Capital notes that the DeepSeek model gives local companies the confidence to build IA systems internally with more tilted equipment and tighter budgets.
There’s still a cave. Free AI can reduce barriers to entry, but it also raises concerns about intellectual property, control and long-term sustainability. It’s one thing to open the hood; It’s another thing to make sure the engine works well under all conditions. Thus, the DeepSeek Open Source Pivot could be a short-term engine rather than a long-term solution.
China Exactly the West in the battle of narratives?
In many ways, the narrative defeat of the West is more critical than any technological loss. By representing DeepSeek as a popular triumph, Beijing has developed a compelling story that resonates at home and abroad. Even Western media, generally skeptical of Chinese technology, played unintentionally in this narrative by accepting unverified claims for the controlled information environment in which DeepSeek works.
This narrative domination is not just about pride. This is a strategic move to attract domestic investment, encourage adoption and eliminate foreign competitors. As space AI is becoming more polarized, controlling history could be as important as controlling technology itself.
Is the race of artificial intelligence a global technological decoupling?
GPCA data indicate that global technology investments are being reallocated. In 2024, China recorded a 42 per cent decrease in technology funds ($18.1 billion). Meanwhile, South-East Asia attracted $8.6 billion, an increase of 68 per cent. India, too, remained resilient with only a 2% decrease. The message is clear: capital seeks safer and more predictable environments.
More than that, India surpassed China in technology outflows, with $12 billion compared to $9 billion in China. For startups, this sign that China may no longer be the final destination for growth and liquidity. And yet, China will not return. In March 2025, he announced a new publicly funded venture capital fund to raise 1 trillion yuan ($138 billion) over the next 20 years, mainly against robotics and AI.
What is the reality of the threat of US export violations?
The Washington investigation into Nvidia chip sales can ultimately determine whether China has violated export controls. The journey of tokens through Singapore and Malaysia is worrying, and highlighting the end user remains a challenge. If proven, it could lead to a new wave of sanctions or even criminal prosecution, reshaping the already tense technological landscape between the United States and China.
For DeepSeek, this search is found as a storm cloud. If it is found that the startup has benefited from illegal material routes, all its credibility could be lost. In the back, if no dirty game is found, it can cement its place as a legitimate, though controversial, player in the global AI ecosystem.
In conclusion, DeepSeek is not just another startup; It is a prism through which you can see the complexity of US technological competition – China, industrial policy and the realignment of global venture capital. Whether it is successful or collapsing, its history offers invaluable ideas in the next chapter of artificial intelligence, which deals with both politics and perception and code.
