China's technological achievements did not happen spontaneously, despite the unlikely beginning of the DeepSeek deep shock.
The little-known Hangzhou hedge fund, which developed a ChatGPT competitor as a side project for a mere $6 million, is the product of a deliberate strategy to invest in upcoming technology advancements.
This is not mere coincidence; it is a deliberate policy.
The essential elements for artificial intelligence (AI) lie in microchips, science PhDs, and data. It seems that China is already ahead in the latter two aspects.
Chinese universities produce over 6,000 STEM PhDs on average each month, far surpassing the US and the UK in this aspect.
Although there are quality concerns, China has started to outpace the US in terms of "citation-weighted" patents too, adjusting for the frequency of reference in scientific papers.
Over the past decade, Chinese lithium-ion batteries' costs per kWh have decreased significantly, mimicking the success seen in AI with DeepSeek.
China's dominance is most evident in electric vehicles (EVs), where they are the largest global exporter and have seized control of supply chains and battery technology, expanding beyond this sector.
Chinese manufacturers are venturing into "electric intelligent vehicles," leveraging their supremacy in software development that traditional automakers struggle to match.
Chinese consumer electronics firms are entering the automotive industry, utilizing AI-powered robots in "dark factories" operating around the clock, many of which are now produced in China.
Driven partly out of necessity due to lack of fossil fuels, China is swiftly moving towards electrification, leading to a significant increase in clean tech patents filed.
Recent visitors to China were impressed by the transformation regarding cleaner air in Beijing, the prevalence of indigenous electric cars, and the grandeur of Huawei's campus, which resembles a traditional British university with its own transportation system.
Despite the remarkable progress, there remain apprehensions regarding censorship, democratic values, and security issues. The rise of China's AI industry has been fueled by access to vast amounts of data, a challenge for the West to counter.
The UK government faces a delicate balance in dealing with China's technological prowess. Chancellor Rachel Reeves' recent trip to Beijing underscores the global impact of such innovations.
Some European countries, like Spain, are actively encouraging China to not only establish factories but also transfer advanced battery technology to Europe.
The West's dependence on China for various goods may extend to data-driven AI models like DeepSeek, posing implications not only for technology but also for economic and geopolitical spheres.