Chinese AI makers have learned to build powerful AI models that perform just short of the U.S.’s most advanced competition while using far less money, chips and power. American policies restricting the flow of top-end AI semiconductors and know-how to China may have helped maintain a short U.S. lead at the outer reaches of the AI performance curve — but they’ve also accelerated Chinese progress in building high-end AI more efficiently. In late December, Hangzhou-based DeepSeek released V3, an open-source large language model whose performance on various benchmark tests puts it in the same league as OpenAI’s 4o and Anthropic’s Claude 3.5 Sonnet. Those are the most advanced AI models these companies currently offer to the broad public, though both OpenAI and Anthropic have next-generation models in their pipeline. Training V3 cost DeepSeek roughly $5.6 million, according to the company. OpenAI, Google and Anthropic have reportedly spent hundreds of millions of dollars to build and train their current models, and expect to spend billions in the future. AI pioneer Andrej Karpathy called DeepSeek’s investment “a joke of a budget” and described the result as “a highly impressive display of research and engineering under resource constraints.”

Full report : DeepSeek-V3 shows China’s AI getting better — and cheaper.