Industry leaders in both countries said the capability of China’s best AI model is just months behind

Industry leaders in both countries said the capability of China’s best AI model is just months behind

Today, they are two of the Chinese artificial-intelligence tycoons who have U.S. Computer geeks Tang Jie and Yang Zhilin were mere teacher and pupil more than a decade ago, with dreams of building a machine that could think like a human. AI pioneers looking over their shoulders with alarm.

Anthropic’s annual revenue reached $65 billion in July, according to investors briefed by the company. DeepSeek showed the Chinese industry a viable path to boost model performance while easing the demands on chips. Yang incorporated techniques that were invented or proven by DeepSeek into Moonshot’s subsequent models. Its K2 and K3 models adopted the MoE design and variants of MLA. DeepSeek, in turn, used a technique optimized by Moonshot to boost training efficiency and stability. That still trails American titans by a wide margin.

DeepSeek was among the earliest adopters in China of a model design called “ mixture of experts ,” or MoE, in which an initial routing mechanism directs the problem to a specialized expert model—akin to a head chef directing a spaghetti order to the kitchen’s Italian cook.

At the DeepSeek meeting in May, Liang said computer chips, not people, accounted for the most critical gap between Chinese and American companies. Researchers at top labs including Alibaba and Z.AI said they are often allotted one-fifth of the high-end chips available to peers at OpenAI and Google.

So I decided to stay. Liang’s team at DeepSeek came up with some of the most important workarounds, including multihead latent attention, or MLA. That technique slashes an AI model’s memory usage—such as in a chatbot conversation—by creating a shorthand version of what has gone before. Using less memory saves computing power and money.

Industry leaders in both countries said the capability of China’s best AI model is just months behind that of the best in the U.S. Nearly half of total equity-capital investment in China flowed into AI in the first half of this year, most of it from government-backed funds, according to the Investment Association of Central State-Owned Enterprises. Tang told technology writer Mehran Gul, according to his book “The New Geography of Innovation,” that after getting his Tsinghua doctorate, “I thought I could do something big in China and also in that way maybe I can help China better.