China’s “Art of Artifical Intelligence”
At the start of 2025, we observed new approaches to robotics and AI model training from Nvidia. This technology promises to be game-changing. However, we witnessed something unexpected with the release of DeepSeek’s R1 model. It’s superior performance to OpenAI’s ChatGPT technology was a big surprise. What is more remarkable is it comes at just 3% of the cost. Leading to a 15% drop in valuation of Nvidia by investors.
This was unimaginable a few weeks ago and caught many of the Western AI companies by surprise. It’s fascinating yet again to see the disruption of a small company on big tech companies. What is encouraging is that Deepseek’s technology is released as open source and available to everyone. This article is looking at the leaders behind the technology and the strategies AI companies in China are using.
The impact of Deepseek’s model
The Deepseek R1 model was built using just 2,048 Nvidia H800 GPUs at a cost of $5.6 million, showcasing a resource-efficient approach that contrasted sharply with the billion-dollar budgets of Western competitors.
Tech Radar
OpenAI ironically started with the goal of being open source from 2015 to 2019. It has since pivoted to a commercialisation model from 2019 onwards. This change upset early backers like Elon Musk.
Chinese AI companies have a focus on the long term. They are both innovative and resourceful. With a huge market, they can rapidly scale solutions. We can learn from their approaches and strategies. We will examine the CEO of TenCent (market cap of $362 billion). Then, we will compare the approach with the CEO of Deepseek. Both have interesting similarities and key differences.
TenCent

Pony Ma
Founded in 1998 by Pony Ma and four partners in Shenzhen, China. Went public on the Hong Kong Stock exchange in 2004. Then in 2011, TenCent launched WeChat (Weixin), an all-in-one messaging, social media, and payment platform. It transformed daily life in China and attracted over 1.3 billion users globally. It has since gone on acquire key stakes in gaming companies like Riot Games (League of Legends), Epic Games (Fortnite) and Supercell (Clash of clans.) Beyond gaming and social media, Tencent expanded into fintech (WeChat Pay), cloud computing, AI, and made strategic investments in companies worldwide, including Tesla, Snapchat, and Spotify.
Pony Ma (TenCent CEO)
- Visionary Thinking and Adaptability: Pony Ma can foresee industry shifts. His adaptability has been a cornerstone of Tencent’s success. His decision to develop WeChat, a super-app that combines messaging, social media, and payment services, was a game-changer.
- Embracing Innovation and Risk-Taking: Pony Ma’s willingness to invest in new technologies and explore uncharted territories has paid off immensely. Tencent has invested in companies like Tesla, Spotify, and Snapchat. These investments have diversified its portfolio. They have also positioned Tencent as a global tech leader.
- Building a Collaborative Culture: Pony Ma fostered an environment where ideas could be freely exchanged, and decisions were made collectively. This approach empowered employees and ensured that the best ideas were implemented.
- Strategic Partnerships and Investments: Pony Ma’s strategic vision extended beyond internal innovation. By investing in promising startups and forming alliances with key players, Tencent expanded its influence and stayed competitive.
- Navigating Regulatory Challenges: Pony Ma’s ability to navigate regulatory challenges while maintaining the company’s growth trajectory is commendable. His low-profile leadership style and strategic decision-making helped Tencent manage political risks and regulatory pressures effectively.
- Focus on Long-Term Growth: Pony Ma emphasized long-term growth over short-term gains. This strategy allowed Tencent to reinvest its profits into new ventures and technologies.
- Empowering Employees: By giving employees the freedom to pursue new projects and innovate, Tencent attracted and retained top talent.
Deepseek

Liang Wenfeng
Liang Wenfeng, an AI enthusiast, founded the hedge fund “High flyer” in 2016. It used AI trading algorithms for managing the fund. By 2021 High flyer was exclusively using AI in trading. Before the United States federal government imposed AI chip restrictions on China, Liang amassed a collection of 10,000 Nvidia A100 GPUs. These GPUs were intended for AI training. Liang had a strong faith in Large Language Models (LLM) and the linguistic nature of human intelligence. Deepseek was an experiment in how he could democratise AI access with a goal of reaching Actual General Intelligence.
Liang Wenfeng (CEO Deepseek)
- Unconventional Hiring Practices: Liang Wenfeng, the founder of DeepSeek, hires young people and bookworms for his engineering team. He emphasizes creativity and passion over experience. He believes that inexperienced workers are more innovative than seasoned experts who can get bogged down by their own knowledge.
- Focus on Long-Term Goals: Liang prioritizes long-term goals over short-term achievements. He believes that basic skills, creativity, and passion are more important than having done a similar job before.
- Openness in Innovation: Liang advocates for openness in innovation, believing that closed-source approaches to disruptive technologies only offer short-term advantages.
- Visionary Leadership: Liang aims to shift China’s AI focus from imitation to innovation. He provides open-source models to rival closed systems like OpenAI.
- Humble and Nerdy Leadership: Liang is a humble and nerdy leader. He values the unique journeys and ideas of his team members.
Sun Tzu, the military strategist and philosopher from 5th Century BC, describes military tactics in the “Art of War.” It’s interesting to compare Sun Tzu’s principles from The Art of War in the context of Chinese AI companies. These companies are competing with their Western counterparts.
1. The Importance of Strategy Over Force
Begin by seizing something which your opponent holds dear; then he will be amenable to your will.
Sun Tzu, The Art of War
Chinese AI firms can focus on niche markets. They should avoid competing head-on with Western giants like OpenAI, Google DeepMind, or Microsoft. They can also develop innovative business models or create cost-effective solutions that exploit gaps in the global AI landscape.
Companies like DeepSeek develop open-source models that undercut the cost barriers of proprietary systems. These models offer advanced capabilities to a broader audience. This is particularly true in emerging markets where Western firms have less reach. The impact of such a large customer base in China gives companies a rich dataset on which to train their AI models.
Another example is the story of Transsion, a Chinese company that dominates the African mobile phone market. The company’s founder, George Zhu, started by selling phones in Lagos and now has a significant market share 48.2% across Africa (which surpasses Samsung!). It has manufacturing in Ethiopia and entered the Indian market in 2016.
Long-Term Impact: This avoids direct confrontation while quietly building influence and technological ecosystems globally.
2. Know Yourself and Your Competitor
If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.
Sun Tzu, The Art of War
Chinese firms rigorously analyze the strengths and vulnerabilities of Western AI companies. They consider factors like their reliance on high computing costs. They also look at regulatory challenges like GDPR and ethical controversies.
Access to US technology: The chip embargo from US has prevented Chinese firms from accessing the latest tech. This has meant they have innovated with less powerful chips. However there is significant evidence then the chips are still getting into the hands of Chinese military.
PIPL verus GDPR: The approach to data privacy is quite different in China, where in Europe GDPR gives consumer rights. The landscape in China data has less regulatory restraints. In recent years there has been a new regulation the Personal Information Protection Law (China’s version of GDPR with significant differences)
Internal Focus: They recognize their own strengths, such as state support, a vast domestic data pool, and engineering talent. They can fine-tune strategies to maximize these advantages.
Example: Tencent’s investments in global gaming and AI startups provide not just financial returns. They also offer insights into Western AI trends, technologies, and business cultures. The gaming businesses have generated huge profits by offering free-to-play games like Fortnite or League of Legends. They allow players to buy in-game merchandise to dress their characters. In 2025, Fortnite alone had 650 million registered players and has generated a revenue of over $40 billion to date!
3. Adaptability and Flexibility
In the midst of chaos, there is also opportunity.
Sun Tzu, The Art of War
Rapid iteration, pivoting products based on market feedback, and adapting to regulatory environments give Chinese companies an edge. Chinese consumers willingly surrender their data for convenience. They do this for getting a food delivery, a taxi, or for paying for financial services.
Baidu has been a leader in AI innovations, particularly in autonomous driving and natural language processing. The company has developed its own AI models, such as the Ernie Bot, which competes with major Western players like OpenAI’s GPT-4
In regions where Western tech faces political or cultural resistance, Chinese firms adapt their offerings. They fit local needs more effectively. We can see partnerships between Russian and Chinese collaborations in the banking and AI sectors.
4. Deception as a Tool
All warfare is based on deception.
Sun Tzu, The Art of War
While “deception” sounds aggressive. In the business context, it can mean strategic obfuscation. This involves downplaying capabilities while quietly advancing in key areas.
A company might present itself as focused on narrow AI applications. Meanwhile, it develops more powerful general AI systems in the background. Similarly, partnerships with Western firms could be leveraged to gain insights without revealing long-term intentions.
Companies like Huawei have faced scrutiny partly because of concerns about dual-use technologies. These are civilian products with hidden strategic advantages.
5. Efficiency and Economy of Effort
The greatest victory is that which requires no battle.
Sun Tzu, The Art of War
Chinese AI firms avoid expensive tech “arms races.” They focus on cost-effective R&D. Techniques like model distillation help reduce computational costs without sacrificing performance.
For example, Doubao AI Chatbot: ByteDance, known for TikTok, has developed the Doubao AI chatbot. This bot challenges the dominance of Baidu’s Ernie Bot. This demonstrates ByteDance’s flexibility in exploring new AI applications and competing in different sectors.
ByteDance has shown adaptability by expanding its AI capabilities globally, making significant strides in various markets.
Achieving AI breakthroughs with minimal resource expenditure allows for faster scalability in both domestic and international markets.
6. Psychological Warfare
The expert in battle moves the enemy, and is not moved by him.
Sun Tzu, The Art of War
Shaping global perceptions of Chinese AI as innovative, indispensable, and inevitable can create an environment. In such an environment, Western firms may feel pressured. They might even feel strategically cornered.
High-profile successes in AI competitions include outperforming Western models in benchmarks. Hosting influential global AI summits can also shift the narrative of technological leadership.
Investment in AI ethics discussions can subtly influence the global AI discourse. Collaborations with Western universities and public diplomacy also play a role in this influence. These efforts reduce fears and increase acceptance of Chinese technologies.
Conclusion
Chinese AI companies, consciously or unconsciously, often reflect Sun Tzu’s principles in their global strategies:
• Indirect competition instead of head-on battles
• Strategic partnerships that double as intelligence-gathering
• Rapid adaptation to shifting regulatory and technological landscapes
• Subtle influence campaigns to shape global perceptions
Dominance in AI may not come from a single decisive victory. Instead, it results from a series of calculated, strategic moves that gradually shift the balance of power. The first few weeks of 2025 show that major changes in technology are coming.
It is key to note that disruption is a theme. Small companies can have disproportionate effects on the market. We need this disruption to keep the status quo and create opportunities for every country in the world. This is a very exciting time to be observing what humanity can do with this new technology. What are your thoughts on the rise of this technology?