Chinese AI Competition Landscape - Notes on DeepSeek

Alibaba Qwen, ByteDance, Moonshot Kimi competing with DeepSeek, poaching between groups common, big labs mostly in Beijing near Tsinghua and Peking University, Hangzhou as exception

DeepSeek stands out in China’s competitive AI landscape as a lean, low-profile powerhouse in Hangzhou, operating with a small but elite team that prioritizes practical efficiency over the massive scaling seen in Western labs. While major players like Alibaba and Moonshot compete for talent in a market centered around Beijing’s top universities, DeepSeek maintains a "cool" reputation by focusing on immediate technical achievements like their R1 model rather than existential AGI fears. This pragmatic approach reflects a broader national sentiment that treats AI as a standard technological tool for solving infrastructure and employment challenges rather than a path to a singularity, with firms often content to remain slightly behind U.S. benchmarks to maintain their focused, high-energy culture.

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thanks. this really isnt that long, might as well paste in full here since OP deleted.

Notes on DeepSeek:

We visited the company HQ last Tuesday. It was founded in 2023 by Liang Wenfeng and operated out of his hedge fund, High-Flyer, until somewhat recently. The company released their R1 model in January 2025, so it was interesting to see what they’ve been doing

The company is located in an unmarked, 12-story building in Hangzhou. There is no DeepSeek branding visible from the street or lobby. I asked why this is, and the team demurred and said, “Well, there are many companies in this building, and we are not special.” They want to keep a low profile.

We met with their Head of Data and Head of Infrastructure. The company only has 300 employees. They are at least an order-of-magnitude smaller than Anthropic, and don’t care to scale further just yet. Their Head of Infrastructure, in particular, was young; maybe 30 years old and apparently one of the best AI buildout and energy experts in the country. (We briefly walked through the labs, and everybody seemed young. There was a lot of discussion; it felt like an exciting and energetic place.)

Lots of competition is coming from Alibaba (Qwen), ByteDance, and Moonshot (Kimi). People in China seem to mostly use Kimi or Deepseek. Young people use VPNs to access Claude, though Anthropic has blockers around usage in China and make it difficult. Poaching between groups is common, just like in the U.S. DeepSeek has a reputation as being really smart and “cool,” maybe similar to Anthropic. Big labs are mostly in Beijing, near Tsinghua and Peking University, with Hangzhou as the main exception (DeepSeek and Alibaba/Qwen are there).

The DeepSeek team reads western AI writers. They listen to Dwarkesh and read Gwern. The people we met with said they had never met with any employees from Anthropic. They were not at all concerned with some kind of hostile / AGI takeover scenario. They kept bringing up job loss (which is already high amongst youth in China) as their main concern. When we asked if they do red teaming on their models, they said no. In China, AI models are not regulated directly; the government instead has restrictions on how those models can be used in software, services, etc.

As a whole, China seems to treat AI as just another technology, rather than as some kind of singularity moment. National attention is still on basic needs and infrastructure buildouts, and on providing more medicines for people. The “dreams of singularity" seem like a luxury or distant consideration.

We asked the DeepSeek team: “What has the highlight been so far? What are your plans for an exit?” And they said that their highlight and great achievement was R1. They did not gesticulate at a future model or vision, but rather seemed proudest of what they’ve already done. They are content for now to remain ~6 months behind U.S. companies while maintaining a lower profile and team size.