China's AI Startups Are Gaining on U.S. Rivals

Chinese startups show signs of catching up with America’s leading artificial-intelligence models more quickly than many in the industry had expected, despite the restrictions China faces in buying advanced chips.

- RAFFAELE HUANG AND TRACY QU

DeepSeek, a startup funded by one of China’s most successful hedge-fund managers, released a preview version of its latest large language model in November. It said the program’s abilities compared favorably with OpenAI’s reasoning model called o1, which came out in preview form in September.

Other Chinese companies have made similar claims in recent weeks. Moonshot AI, a startup backed by Chinese internet giants Alibaba and Tencent, said it developed a model specializing in math with capabilities close to o1, while Alibaba said one of its own experimental research models outperformed the preview version of the U.S. model on math.

The companies haven’t published papers describing their models, and evaluating the claims is difficult because there isn’t a single agreed-upon test of an AI model’s abilities. Still, some U.S. specialists said they were impressed.

China is “catching up faster,” said Andrew Carr, a former fellow at OpenAI and currently an AI entrepreneur. He said DeepSeek researchers trying to replicate OpenAI’s reasoning model “figured it out within a few months, and frankly many of my colleagues are surprised by that.”

One test used for comparison is the American Invitational Mathematics Examination, which is designed to challenge the brightest high school math students.