The competing AI industry

A free AI-powered chatbot called DeepSeek functions, feels, and looks a lot like ChatGPT. This indicates that it is utilized for many of the same jobs, yet it is debatable how effective it is in comparison to its competitors. It is very amazing how quickly the new Chinese artificial intelligence (AI) program DeepSeek disrupted the markets, the technology sector, and the optimistic belief that the United States is the leader in AI. According to DeepSeek's technologists, the chatbot was created for a fraction of the price of competitors like ChatGPT. A week before, shares of AI chip creator and recent Wall Street sensation Nvidia had fallen 17%. According to Bloomberg, it lost around $600 billion in market value, the largest decline in US stock market history. Marc Andreessen, a venture capitalist  brilliantly explains it as  AI's Sputnik moment.

As of 2025 Alibaba is the top-performing Big Tech stock in China, surpassing the growth of Baidu, Tencent, and JD.com, among other significant technological firms in the nation.

Alibaba has made significant investments in China's most promising AI firms, such as Moonshot and Zhipu, since ChatGPT started a global AI race. It has also slashed cloud computing rates in an effort to win back clients that have left for competitors. With Alibaba doubling down on AI investments and cloud development while winning significant alliances, including reports of a collaboration with Apple on AI features for China, the rise has been fueled by confidence over its AI ambitions.

China's cloud business is still lagging behind the US, despite the hype. In comparison to Amazon's 19% and Microsoft's 31% cloud revenues over the same period, Alibaba's and Baidu's cloud revenues increased 9.7% and 7.7%, respectively, in the December quarter. Alibaba's ability to fully capitalize on AI-driven development is called into question by this disparity.

Concerns of US

According to US President Donald Trump, it is a "wake-up call" for American businesses to concentrate on "competing to win." There are concerns like DeepSeek uses fewer sophisticated chips, secondly the company claims that it was developed at a tenth of the expense of industry-leading models like OpenAI. This is what makes DeepSeek so unique. Thirdly, Washington's attempts to restrain Beijing's ambition for technological dominance are also called into question by DeepSeek. Considering that the prohibition on exporting cutting-edge chips to China has been one of its main aim. But Beijing has stepped up, with the founder of Deepseek Liang Wenfeng saying that if the US can develop its quantitative trading sector, why not China and we cannot be followers always; also the President Xi Jinping announcing AI as a high priority. Technology dominance is at the heart of Xi Jinping's goal for a "Chinese Dream" and national renewal.

Deepseek’s rise is great a boost Chinese govt to compete and challenge technological prowess of the west. Since DeepSeek is privately held, investors are unable to purchase shares on any of the main stock exchanges.

Banning, or closing eyes from Reality:

A new law filed by Missouri Republican Senator Josh Hawley titled the Decoupling America’s Artificial Intelligence Capabilities from China Act, aims to restrict the import and export of artificial intelligence (AI) technology between the United States and China, with harsh sanctions for violators. This could imprison anyone for up to 20 years if they intentionally download artificial intelligence models created in China, like the DeepSeek. The Senator Hawley bill suggests prohibiting American businesses from working with Chinese enterprises or doing AI research in China. Additionally, it would stop US businesses from funding Chinese AI research.

However, the bill's ambiguity has drawn criticism from experts. Although the measure states that sanctions only apply to "willful" conduct, some contend that it would penalize people who innocently use an app like DeepSeek. The AI research community may also be affected by the bill. Its rules forbid the publication of research papers or AI models that could wind up in China, as well as the "transfer of research." Academics who frequently publish their work, particularly research articles from Chinese scholars, may suffer as a result. If the legislation be approved, it may hinder cooperation between Chinese and American researchers, which could be detrimental to the advancement of AI worldwide.

The Electricity Demand and AI:

Based on a recent International Energy Agency (IEA) report, the Global electricity demand increased 4.3% last year alone, and experts estimate that it will expand by an astounding 3,500 terawatt-hours over the next three years—the equivalent of adding the annual electricity needs of a whole nation the size of Japan to the global grid. Assessments of electricity demand are becoming more questionable due to the rise of DeepSeek, a Chinese AI firm that claims to be more efficient than its rivals, amid mounting concerns about AI's power-hungry nature.

Whether DeepSeek's efficiency gains can reduce the enormous electricity demand anticipated from AI-driven data centres is currently the key question. AI's energy footprint may have been overestimated in the past if its models require a lot less power to operate and train. Experts warn, meanwhile, that rising usage of AI could counteract any energy-saving measures due to efficiency increases.

Impact on Global Politics:

The arrival of AI in the international politics had brought new changes in nation-states' diplomacy at global stage.  AI enhances data analysis - providing strategic advantage and makes informed decisions, predictive modelling; analysis of vast data thereby predicting behaviour of states and organisations like UN and SCO,  and enabling diplomats to take informed decisions based on vast data available. It also influences public diplomacy, enhances new platforms for communication and deeper connections. However, there are certain ethical and security challenges involved like accountability, transparence and sensitivity of certain diplomatic contexts. As well as risks like misinformation and  manipulation.

Lessons for India

China demonstrated its prowess in nuclear fusion, sixth-generation combat jets, and artificial intelligence. India needs to reflect on its sluggish progress and the reason that one of its technological hubs could not produce such a breakthrough.

The social media, gaming, and entertainment platforms are among the internet platforms that Xi Jinping has mostly dismissed, calling them "spiritual opium" and claiming that they endanger the advancement of people's "common prosperity." He believes that even experimental research should be grounded in constructive national power objectives, as reflected in his phrase, "Walk with two legs." These include being self-sufficient, modernizing the military, advancing the Chinese economy, and making significant discoveries that establish China as a global leader. But in India most of the youth is busy with reels, entertainment as well as spreading hatred.

China's lofty objectives to become a global force in the field by 2030 were outlined in the New Generation Artificial Intelligence Development Plan, which was introduced in 2017. Positive network initiatives like top-notch talent, tax incentives that reward R&D, and regulatory sandboxes that promote experimentation are likely to have benefited DeepSeek's AI lab, if not its parent firm.

State control is not the lesson to be learned from China. This is frequently only the outward manifestation of China's success, and it hides the reality that, despite frequent conflicts between corporate ambitions and the government, China has established an environment that encourages private sector innovation.

Through market incentives, regulatory frameworks, and strategic investment, the government can subtly influence the environment, but it should avoid micromanaging innovation paths.

Conclusion:

The Chinese are working hard to compete with global players when it comes to AI industry. The recent advancements like the DeepSeek shocked the world as Chinese AI advancement was cheaply built and in less time. American president Trump had called it a warning call for American businesses to compete to win. From banning Chinese AI applications to cooperate with the research and development, it raised many issues in international politics like electricity crisis, governance, influencing decision making and future projections of AI and its advancements in the field of new AI technology. The future lies before us to see what are the possible outcomes of this technological advancements.

ARFAT AHMAD BHAT, PhD Student at Centre for Russian and Central Asian Studies, School of international Studies Jawaharlal Nehru University, New Delhi.