Western technology giants have long been regarded as the main force in the artificial intelligence market. In 2025, top players are expected to be invested more than $300 billion is spent on AI development. Amazon alone plans to fork more than $100B.
However, the emergence of China’s Shensok became a major turning point. It shows that the balance of power in artificial intelligence may shift rapidly. Many governments around the world are fast prohibit New AI model for various security issues. But that hasn’t changed the fact that many businesses are starting to focus on. They have not stopped adopting this technology, especially loving the low cost DeepSeek offers.
But is it really the future of AI, or is it being revoked due to all risks? No matter who wins or loses, AI competitions will reshape many things. Investors must keep an eye on things to avoid betting on losers.
Let’s see how the market has already dealt with the ongoing competition.
DeepSeek transfer AI development
The arrival of DeepSeek shows that China may be a serious competitor in shaping the future of the AI industry. Admittedly, Research Cisco proves that the model has a lot of errors and hallucinations, so it is no exceptionally better than already-established players like Openai’s Chatgpt or Anthropic’s Claude. But the simple fact that China could close the technology gap so quickly and bring serious challenges almost blow up the Internet.
However, this rapid growth is not without risks. Unlike Western AI companies, Chinese developers seem to prioritize speed and large-scale adoption over security. Many countries have banned DeepSeek due to security risks and concerns about data privacy. At the same time, these reasons have attracted great attention to the Chinese AI model and raised many questions about the possible threats the application has posed.
However, despite its shortcomings and official ban, its adoption has taken a huge step. Only in January 2025, the DeepSeek app is download More than 10 million times.
How AI race affects investor sentiment
There is no doubt that artificial intelligence development has caused a huge wave in the market and has influenced investment strategies. Nvidia’s stock value when DeepSeek is introduced Falled Overnight, nearly $600 billion. This is one of the largest waterfalls in the history of the U.S. market.
Investors are worried about missing out on investment in emerging technologies. Furthermore, many of them even bet that if AI can be trained more effectively, this means companies like Nvidia and Microsoft may need to rethink their spending.
Still, I think the names of large Western technicians still have many advantages: strong data, global scope and large customer base, deep industry connections, and more. DeepSeek’s success is now driving them to improve their game and keep improving, but that hasn’t eliminated all the progress they’ve made so far.
For many today, whether US-based AI companies can keep competing is a big question. Moreover, I personally think the answer is “yes”. They will most likely compete with DeepSeek’s lower cost by making their AI models more efficient and affordable.
There is also the fact that these companies will be supported by President Trump’s administration. He believes that AI is a tool to gain a competitive advantage over China call Maintain global leadership in AI technology. Therefore, Trump’s future AI policies are likely to have a positive impact on local players, thereby facilitating their growth.
The role of regulation in shaping the AI market
As competition for AI grows, the government has played a more proactive role in regulating the industry. The problem is, of course, that the technology is developing far faster than the evolution of existing regulatory frameworks.
In addition to Trump’s position, other countries’ administrations have taken various methods to solve AI problems. For example, the UK introduced AI-centric Code of practice Improve network security and make AI models safer.
In the EU, we have OpenEurollm – A program initiated by a group of regional research institutions to develop better LLMs with the European regulatory framework. This will also help reduce dependence on US development.
These measures highlight a growing trend: countries are working to build and protect their own AI ecosystems. But they have not really solved the problem of global control over AI development. China continues to follow its own regulatory scripts on the one hand without having to pay too much attention to Western needs.
As long as countries take action on their own, companies and investors will continue to handle AI models in different markets. A truly effective regulation requires an international approach, but at present, it is not even discussed globally. I think that if AI technology is to achieve true global adoption, that will have to change.
What’s next?
DeepSeek proves that the tech industry is undergoing a huge shift. Chinese companies are no longer behind – they are riding the wave of AI race and changing the power in the market.
For investors and entrepreneurs, this means new opportunities, but also new risks. AI is no longer a field dominated by the West, and the competition will only become more intense from now on. Of course, for investors, growth in AI development means they will have more choices when choosing who they trust.
Meanwhile, regulatory uncertainty remains despite the high growth rate. Participants in this market will have to continue to pay close attention to policy developments in different jurisdictions.
But one thing is certain. AI adoption is the largest technological evolution in modern history. The question is how businesses and investors adapt to this transformation and who will be abandoned.
