DeepSeek's Rise Highlights Korea's AI Challenges

DeepSeek, an emerging AI startup from China, has stirred considerable attention in the global technology landscape. Established in May 2023 in Hangzhou, the company captured headlines on January 22 with the launch of its open-source AI model, DeepSeek-R1. This model is celebrated for its impressive performance and affordability. Industry analysts claim that in certain performance tests, it has outperformed the well-known AI model ChatGPT developed by OpenAI. Remarkably, DeepSeek's mobile AI chatbot application has even managed to surpass ChatGPT in downloads on Apple's App Store in the United States, catching the tech community by surprise.

What stands out about DeepSeek is not just its cost-effectiveness and performance but also its ability to navigate around U.S. restrictions on semiconductor and AI technology. This situation raises significant doubts about the effectiveness of American regulatory measures in stifling China's progress in AI.

DeepSeek's founder, Liang Wenfeng, adds another layer of intrigue to the company's story. At the age of 40, Liang is a local talent without any foreign education or experience. He hails from Guangdong Province and studied computer science at Zhejiang University. In 2015, he co-founded a hedge fund that utilized deep learning AI techniques in algorithmic trading, which eventually grew to manage assets worth $8 billion. His journey emphasizes the strength of innovation and the startup ecosystem in China, mirroring the success stories traditionally associated with Silicon Valley.

The emergence of DeepSeek has already impacted the U.S. stock market, leading to sharp declines in shares of Nvidia, a leading supplier of GPUs focused on AI, with the stocks falling as much as 17.7 percent at one point.

Despite various controversies over technology transfer and data security issues, the rise of DeepSeek looks set to transform global AI competition and market conditions. AI technology is no longer just a concept for the future but is becoming a vital part of everyday life. Experts predict that by the year 2029, AI may achieve a level of intelligence that surpasses human capacity, known as the 'technological singularity.'

Currently, the race in AI development is effectively a contest between the United States and China, while Korea finds itself trailing in sixth or seventh place in the global rankings. There are growing concerns that Korea may find it increasingly difficult to catch up to the leading nations regarding essential components such as computing power and data resources necessary for AI innovation.

DeepSeek's emergence should serve as an alert as well as a beacon of hope for Korea. Reports have indicated that the GPU infrastructure operated by DeepSeek is comparable to that of the entirety of Korea. In contrast, Samsung Electronics, one of the largest technology companies globally, is reportedly investing only a fraction—roughly one-tenth—of what DeepSeek is committing to AI development. It is unrealistic to expect Korea to maintain competitiveness without significant investments in the sector.

On a positive note, the costs associated with AI hardware, especially GPUs, are falling dramatically, with prices dropping to about one-tenth each year. Although Korea has been slow to adapt, there are emerging signs of progress. In April 2023, the government identified AI alongside biotechnology and quantum computing as critical areas for future development. Subsequently, in September, Korea established the National AI Committee and recently became the second country worldwide to enact a comprehensive AI framework law.

However, ongoing political instability surrounding impeachment proceedings has cast doubt on these initiatives, leaving many of them in a state of uncertainty. The urgency of the situation demands that Korea's political leaders take the necessary steps to address these challenges while corporations need to invest boldly in AI initiatives.

AI, Technology, Investment