China 'Promoted DeepSeek AI Launch Prior to US Stock Plunge'

The Chinese government ramped up publicity about DeepSeek’s ‘breakthrough’ AI model in the days leading up to the tech stock crash early this week by Nvidia and other AI and chip-related firms.

Online analysis firm Graphika said social media accounts linked to the Chinese state wound up PR and congratulatory notes about the success of AI models launched by the previously little-known local startup.

The push involved accounts operated by Chinese diplomats, embassies and state media, which amplified media coverage of the launch and promoted the idea that DeepSeek challenged US dominance in the AI sector, the New York-based Graphika said in a report it provided to Reuters on Thursday.

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The messaging was rolled out on platforms such as Elon Musk’s X and Meta Platforms’ Facebook and Instagram, as well as Chinese services Toutiao and Weibo, Graphika said.

‘Beijing keen to amplify its narrative’

“This activity shows how China is able to quickly mobilize a range of actors that seed and amplify online narratives casting Beijing as surpassing the US in critical areas of geopolitical competition, including the race to develop and deploy the most advanced AI technologies,” Graphika Chief Intelligence Officer Jack Stubbs was quoted as saying.

“We’ve consistently seen overt and covert Chinese state-linked actors among the first movers in leveraging AI to scale their operations in the information environment.”

Graphika said it also found a video featuring pro-China, anti-Western content on a YouTube channel whose activity resembled that of Shadow Play, a coordinated influence campaign involving at least 30 YouTube channels that was first identified by the Australian Strategic Policy Institute in 2023.

YouTube owner Alphabet, Meta, X and the Chinese embassy in Washington DC did not immediately respond to requests for comment on the report.

Graphika said it found a small spike in discussion about DeepSeek’s advancements in relation to OpenAI’s ChatGPT on X immediately after DeepSeek released its models on January 20, followed by a much larger uptick that started on Friday and continued to build over the weekend.

By Monday, DeepSeek’s free AI assistant had overtaken US rival ChatGPT in downloads from Apple’s app store.

That led to global investors dumping US tech stocks, wiping $593 billion off chipmaker Nvidia’s market value in a record one-day loss for any company on Wall Street.

Nvidia declined to comment on the Graphika report.

DeepSeek’s researchers claim to have developed aspects of their AI model at a far lower cost than US rivals, sparking worries that US companies that have plowed tens of billions of dollars into AI data centres could face a price war with China.

Shares of Microsoft, a major investor in OpenAI that operates data centres on behalf of the ChatGPT creator, slid earlier this week when it disclosed slower cloud revenue growth than Wall Street expected while it continued to plow billions into capital expenditures.

Microsoft and Meta have vowed to continue deep investments in AI for the foreseeable future.

DeepSeek’s rise to prominence was celebrated in China as a sign that the nation was beating back Washington’s attempts to contain China’s tech industry with curbs on technology exports.

In the US, DeepSeek’s accomplishments sparked accusations that it had improperly accessed technology from OpenAI and other leaders, though the allegations remain unproved.

The US Commerce Department is looking into whether DeepSeek has been using US chips that are not allowed to be shipped to China, a person familiar with the matter said. The latest claims suggest it may have sourced advanced Nvidia chips via Singapore.