A new AI juggernaut has roared onto the scene, poised to upend the global tech landscape — or so the Chinese Communist Party would like you to believe.
Stocks tanked, and so-called industry whisperers predicted a new world order coming in tech. Nvidia, one of the most important tech companies on the planet and a driving force in last year’s stock rally, suffered the largest market loss in history when it shed nearly $600 billion in market value in a single day.
All thanks to DeepSeek, a new AI technology company wholly owned by a Chinese hedge fund, which purports to have created an AI app to rival the popular ChatGPT for a fraction of the cost. Several outlets reported that Chinese AI tech has lagged behind American AI for the last few years, but DeepSeek’s advances have propelled the communist nation to the forefront of AI development.
Some of the claims made over the last couple of days about DeepSeek’s capabilities are nothing short of incredible. Tech entrepreneur Marc Andreessen praised DeepSeek’s “amazing and impressive breakthroughs.” Several experts touted claims that DeepSeek’s AI could operate far more efficiently than competitors like ChatGPT, needing a fraction of the computing power. Even Nvidia, trying to downplay its losses, called DeepSeek an “excellent AI advancement” when asked by CBS News.
And DeepSeek allegedly developed its trailblazing AI for the absolutely rock bottom sum of only $6 million. For comparison, OpenAI, the developer of ChatGPT, has operated on huge losses for the past few years, north of half a billion dollars overall, and tech companies like Microsoft have invested billions of dollars into OpenAI’s efforts.
Early Wednesday, Chinese tech company Alibaba announced that it had created an AI model that surpassed DeepSeek’s.
Maybe, just maybe, the Chinese have cracked the code for super-cheap AI and stand ready to revolutionize the global tech landscape thanks to hard work and good ole Chinese ingenuity (And, of course, the enlightened leadership of the CCP). But an old adage still rings true: If it seems too good to be true, it probably is.
It’s far more likely that the Chinese are lying through their teeth about the reported costs of their new AI and exactly how they developed this new technology. Tech mogul Palmer Luckey called DeepSeek’s AI “legitimately impressive” but called the supposed development cost “bogus” and rightly admonished those who have uncritically parroted “Chinese propaganda.”
The whole thing stinks of a Chinese op to hinder American AI development, make money shorting Western tech stocks, and strike a blow at Nvidia. Based on history, China’s seemingly miraculous latter-day Great Leap Forward in the AI sector is likely due to a concerted effort to infiltrate American tech companies and steal their technology. In fact, Microsoft and OpenAI have opened an investigation into whether a group linked to DeepSeek improperly gained access to important OpenAI data, Bloomberg reported late Tuesday.
And their agents in this scheme aren’t James Bond-esque spies deftly slipping past lasers and circumventing fingerprint-encrypted doors. They’re the “highly skilled” workers we’ve invited into Silicon Valley through H-1B visas.
China has honed its reputation as a world leader in industrial espionage over the last few decades. In 2017, the U.S. Trade Representative reported that Chinese theft of U.S. intellectual property amounts to anywhere between $225 billion and $600 billion each year. The Center for Strategic and International Studies identified over 200 incidents of Chinese espionage in the U.S. alone since 2000. Of those incidents, 54 percent “sought to acquire commercial technologies,” and 90 percent of the perpetrators involved were Chinese nationals.
Chinese nationals account for the second highest number of H-1B recipients, after Indians. Specifically, China represents the top source for “top-tier” AI researchers for Silicon Valley, according to Business Insider.
The first Trump administration recognized the threat of Chinese industrial espionage, launching the “China Initiative” in 2018 to root out Chinese spies in U.S. companies and universities. Though it managed to catch several Chinese agents, including Harvard Professor Charles Lieber, the Biden administration canceled the program in 2022 after allegations of racism.
Even tech giants like Tesla and Google have become wary of Chinese employees, implementing stricter personnel screening procedures to catch Chinese spies, the Financial Times reported. U.S. prosecutors charged Linwei Ding, a Chinese national who worked as a software engineer for Google, in March 2024 for stealing hundreds of secret files on Google’s AI and trying to sell them to Chinese companies.
During the Cold War, the Soviet bloc, particularly Romania, managed to steal vast amounts of technology from the U.S. and Western Europe under the guise of cooperation and goodwill. Romanian dictator Nicolae Ceauşescu made it the official policy of the country to outright steal as much Western technology as possible, according to Lt. Gen. Ion Pacepa, the head of Romania’s secret police who defected to the West. Economic missions to Western nations would be packed with Romanian spies who would steal blueprints, prototypes, and technical manuals.
If a backwater country like Romania can manage to abscond with billions of dollars worth of Western technology, imagine what a country that has vastly more resources at its disposal and is heavily ingratiated with the Western ruling class can do.
President Donald Trump recently announced a $500 billion AI infrastructure project alongside the makers of ChatGPT that could once again make the U.S. the undisputed leader in AI tech. But how useful will it really be if Chinese agents are able to steal our technological secrets and siphon them back to Beijing for a fraction of the cost and labor?
Given the scale and intensity of China’s industrial espionage efforts in the American tech industry over the last few years, China’s earth-shaking advancements in such a short period of time almost certainly come at the expense of U.S. companies. The Chinese, like all communists, are thieves first and foremost, and their most effective agents are hiding in plain sight in America’s tech giants.
The developing AI race between the U.S. and China will have unfathomable effects on U.S. national security if China comes out on top. Trump should reinvigorate his “China Initiative” from his first term and take it even further by cracking down on H-1B visas granted to Chinese nationals. Keeping hostile foreign nationals in this country and inviting more in year after year only serves to give our enemy an undue advantage. We don’t need them here in the first place, and they represent an unacceptable threat to our technological dominance over our greatest geopolitical adversary.
Hayden Daniel is a staff editor at The Federalist. He previously worked as an editor at The Daily Wire and as deputy editor/opinion editor at The Daily Caller. He received his B.A. in European History from Washington and Lee University with minors in Philosophy and Classics. Follow him on Twitter at @HaydenWDaniel
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