Technological dominance was once synonymous with proprietary innovations. But recent history suggests differently: true disruption comes from making technology cheap, accessible and inescapable.
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China rejects the traditional high-cost, high-margin model of innovation. While foundational artificial intelligence (AI) and biotechnological breakthroughs still largely originate in the United States, China excels at rapidly scaling up and optimising the costs of these innovations, turning them into mass-market products at an unmatched pace.
DeepSeek challenges Silicon Valley with its low-cost, open-source AI offerings, Chinese biotech manufacturers are undercutting US drug developers and now BYD is offering autonomous driving to the masses.
This isn’t just about cost-cutting. It’s a strategic imperative forged in one of the world’s most competitive markets and shaped by China’s industrial policy to cultivate global champions. The result is an innovation model where widespread adoption comes first, profits come later and high-margin incumbents scramble to adapt.
Silicon Valley and Bill Gates once dismissed open-source software as a niche movement. Yet Linux revolutionised enterprise computing, Android overtook Apple’s IOS, and open-source AI models from DeepSeek, Meta Platforms and Mistral AI are closing the gap with proprietary models like OpenAI’s GPT-4.
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Founded in 2023, China’s DeepSeek released its open-source R1 reasoning model the day before the US announced its US$500 billion Stargate AI investment initiative. Weeks later, DeepSeek’s chatbot app topped the US iOS App Store, surpassing OpenAI’s ChatGPT.