China is embracing open-source AI models in a trend that’s boosting adoption and innovation in the country. The shift has been spearheaded by AI startup DeepSeek, whose R1 model released earlier this year challenged American tech dominance.
DeepSeek’s R1 has been widely adopted, with large companies like Baidu moving to open source their own LLMs in response. Baidu recently released its latest version of Ernie 4.5 and Ernie X1, making them free for individual users and planning to make the model series open-source from June.
The trend is also being driven by Chinese tech giants such as Alibaba Group and Tencent, which are providing their AI offerings for free and making more models open source. Smaller players like ManusAI and Zhipu AI are also joining the trend, citing the power of open-source as a key factor.
Experts say that open-source models have pushed down costs, enabling product innovation and democratizing access to AI. Ray Wang, principal analyst and founder of Constellation Research, says that companies have been compelled to move to open-source business models in order to compete with DeepSeek’s free offerings.
AI scholar and entrepreneur Kai-Fu Lee notes that the biggest revelation from DeepSeek is that open-source has won, with OpenAI struggling to justify its pricing. Microsoft has invested $13 billion into OpenAI, but the company still expects significant losses and is seeking funding to raise its valuation.
The shift towards open-source models is seen as a key factor in China’s AI landscape, with Tim Wang calling it the “Android moment.” This refers to when Google’s Android operating system source code was made freely available, fostering innovation and development in the non-Apple app ecosystem.
Source: https://www.cnbc.com/2025/03/24/china-open-source-deepseek-ai-spurs-innovation-and-adoption.html