Digital geopolitics: A two-headed dragón

Jorge F. Negrete P.

Is the digital war between the U.S. and China recent? No. Does it start with DeepSeek? No. Does it impact digital geopolitics and the future of the global economy? Yes.

China. In 2017, a report published on LinkedIn (Artificial Intelligence Global Talent Report) noted that, within the top 700 AI personalities, “the US outnumbers China by more than double.” According to the report, there were also a total of 1.9 million AI professionals. Most were in the U.S. and only about 50,000 in China.

On July 8, 2017, China’s State Council launched the New Generation AI Development Plan, where it noted that “the rapid development of AI will profoundly change human social life and change the world. This plan is formulated…in order to seize major strategic opportunities for the development of Artificial Intelligence, to be a pioneer in the development of Artificial Intelligence and a world power in science and technology.” 

Soon after, President Xi Jinping issues the historic speech where he announces that China will be an AI powerhouse by 2030. Since then, China has invested more than $150 billion. Today, China leads the AI patent race in terms of volume (WIPO). Between 2014 and 2023, more than 38,000 generative AI inventions are from China, almost six times more than the USA.

The shock. In a conversation with Carmen Aristegui, she called the arrival of DeepSeek “the shock,” the day after the announcements of $500 billion by OpenAI and SoftBank, and Zuckerberg’s mega Data Center.

This company’s app arrived with an efficiency comparable to ChatGPT, but with an investment of six million dollars and the use of 10,000 Nvidia processors. But the strategic blow was its free and open source nature. An effective propaganda blow to the waterline of digital geopolitics. The effect? ​​A collapse of nearly 600 billion dollars in Nvidia’s value and a series of questions about the American model of technological development.

You have to be careful, this is circumstantial and has a marketing effect. Mustafa Suleyman, president of Microsoft AI, pointed out in his book “The Coming Wave” that “a central attribute of technology is its tendency to become cheaper, more efficient and more widespread.” This is supported by the mythical Moore’s Law, when it points out that every two years the data processing capacity will double.

Satya Nadella, CEO of Microsoft, strikes a blow to his partner OpenAI and announces that “they will soon be able to use the DeepSeek R1 model with Copilot+ and in the vast ecosystem of GPUs (graphics processors) available in Windows.” In other words, China strikes on several fronts, including a system of competitive pressure, within the Microsoft-OpenAI partnership.

Europe. Responding urgently, presents “The Compass of Competitiveness”, where it proposes closing the innovation gap, making it easier for companies to operate throughout the EU by simplifying regulations and laws, and supporting the development of new technologies: advanced materials, artificial intelligence, quantum computing, biotechnology, robotics, and space technologies

China has been investing in AI for 8 years and its progress is spectacular. The small amount of money and few processors from DeepSeek are a mix of reality and propaganda. The US dominates AI in terms of impact, technological efficiency, and investments. It has dominance in the heart of AI: processors. US patents are cited almost seven times more for their quality than Chinese patents, and they concentrate the largest direct investments in processors, data centers, and software.

The war is being fought between the United States and China, with Europe far behind, which sells its model with the values ​​of the West.

This is the war of a two-headed dragon, where one head seeks moral hegemony and the other, the digital economy of the world.

President of Digital Policy & Law

X / @fernegretep