China’s AI ambitions have been making headlines for years, but recent developments have thrown a curveball into the global tech landscape. DeepSeek, a Chinese AI company, has managed to develop a top-tier AI model despite facing significant sanctions and restrictions. And here’s the kicker—it’s open source.
While open-source AI isn’t new (META’s LLaMA models have always been open-source), what’s surprising here is that DeepSeek was trained using a handful of non-cutting-edge technologies, for a fraction of the cost and time compared to Western models. Yet, it has managed to outperform proprietary AI examples from Silicon Valley.
I’ve spent the day thinking about what this might mean for geopolitics, the economy, and cybersecurity… so let’s break it down.
Geopolitical Shifts: Sanctions? What Sanctions?
Traditionally, sanctions have been the go-to move for slowing down technological advancement. But when AI models go open source, those restrictions become a lot less effective. Once an AI model is out in the wild, it’s free game for anyone to adapt, improve, and deploy—whether it’s a solo entrepreneur in Sydney or a tech giant in Silicon Valley.
By open-sourcing their AI, China isn’t just sidestepping sanctions; they’re playing a long game of global influence. Offering accessible, cutting-edge technology boosts their soft power and positions them as a leader in international AI collaboration. Meanwhile, the U.S. and its allies may find themselves needing to rethink their containment strategies.
Key takeaway: Open-source AI erodes the power of sanctions, making regulation and governance the next battleground.
Economic Impact: A Pricing Tug-of-War
Let’s talk money. When high-quality AI models are freely available, what happens to the businesses that charge a premium for similar capabilities? U.S.-based AI giants like OpenAI and Google could face downward pressure on their valuations as companies opt for free, highly capable alternatives.
DeepSeek’s success story also proves that cutting-edge results don’t always require cutting-edge resources. This disrupts the traditional belief that AI superiority is tied to enormous budgets and the latest hardware. Instead, efficient algorithms and strategic training methodologies are emerging as game-changers.
Moreover, this shift could impact investment trends as well. Investors may start questioning why they’ve been asked to pour vast sums of money into proprietary models that have now been outperformed by cost-effective alternatives. This could lead to a reallocation of funding towards more efficient, lean AI startups and open-source initiatives.
Key takeaway: The AI business model is evolving—companies will need to pivot to value-added services to stay ahead.
Cybersecurity Ramifications: A Double-Edged Sword
Here’s where things get interesting (and a little nerve-wracking). Open-source AI opens the floodgates for both good and bad actors. On the positive side, it fosters innovation, collaboration, and wider adoption. But on the flip side, it also means that cybercriminals and nation-states now have access to cutting-edge AI to automate attacks, craft sophisticated deepfakes, and refine social engineering tactics.
More than ever, businesses and governments need to double down on securing their AI supply chains, ensuring transparency in AI model development, and implementing robust data governance frameworks. Because once the genie’s out of the bottle, there’s no putting it back.
Key takeaway: Open-source AI amplifies both opportunities and threats—cyber resilience is now a top priority.
So, What Now?
The open-source nature of China’s AI advancements forces a shift in global strategy. The focus can no longer be just on restricting access but rather on:
- Ethical AI deployment – Building frameworks that ensure responsible use.
- Trust-building – Creating AI ecosystems that prioritise transparency and security.
- Value differentiation – Moving beyond raw AI capabilities to solutions that solve real business problems.
In short, this is less about who has the best AI model and more about who can deploy it in the smartest, most responsible way.
Over to you: How do you think open-source AI from China will impact your industry? Let’s discuss in the comments!
Post written by Kim Chandler McDonald and originally published on LinkedIn:
China’s Open-Source AI: The Genie Is Out of the Bottle in the Race to the Top.