For some time, the United States has been at the forefront of AI, and a new contender, China, has appeared. Recently, the Chinese AI lab made waves with its AI model which set new records within the AI ecosystem. What does India add to this mix? Worry not, because India’s role is very essential and we will look at it in this blog. In addition, let's explore how this AI race began in truly between China and the USA, and what it potentially means for the stock market and economy of India besides DeepSeek AI Stocks.
The United States' Position in Artificial Intelligence
For quite some time, the United States has held the first position in AI as US players such as OpenAI, Anthropic, Google, and Meta are focused on providing and investing in these sectors. With billion-dollar investments, these companies have achieved world-class models within AI.
This new AI of China sent fiascos worldwide in January 2025 when they released their model DeepSeek V3. Unlike Open AI's GPT4 which costs $100 million to train, it costs only $5.6 million. The innovation was made possible by the deep foresight and optimization of this new AI resource.
Chinese AI Trends
The trend of China AI relates to survival and innovation. After the US put in place export controls and prohibited China from accessing advanced NVIDIA H100 GPUs, it switched to using less powerful GPUs such as the H800. Although these GPUs are more dated, it was able to save a significant amount of money and reduce computational resources by adopting efficient architectures such as Multi-Head Latent Attention (MLA) and Mixture of Experts.
This transformation resulted in DeepSeek-V3 achieving advanced performance on various targets compared to leading models such as OpenAI's GPT-4, Meta's Llama 3.3, and Anthropic's Claude 3.5 Sonnet. It has taken the lead in tasks such as coding, solving math problems, and bug detection.
This event led to a fall in the Nasdaq 100 Index from which the Indian market was also predicted to suffer.
Open Source vs Closed Source: A Game Changing Move
Another interesting facet of this new AI from China is its open-source nature. This model allows developers all around the world to utilize, edit, and incorporate it into the global tech world. On the other end of the spectrum, this could lead to promoting censorship and authoritarian narratives for the sake of compliance with the Chinese state's policies.
This brings forward the question of whether AI should incorporate open and democratic values or become a hand of authoritarian regimes, a question similar to the TikTok issue.
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America's Reaction
China's progress has created a level of anxiety in the US. On his second day, President Donald Trump embarked on what he considers an unprecedented program, the $500 billion Stargate Project to establish an American Rust Belt. The objective of these investments is to guarantee Control of AI in the United States. These projects aim to collaborate with companies like OpenAI, Oracle, and SoftBank to create an additional 1,00,000 jobs.
By claiming this, Trump set the tone, “This will ensure that the USA will always have a headstart in AI-focused technologies with no scope for competitors like China.”
The project infographic also underscores just how much DeepSeek has impacted the world in such a short time.
India's Stock Market Impact
The important question at hand is, what will the consequences of this AI race be on India's stock market?
1. Instability: It is likely that as AI is being worked on by various nations, India’s stock market which is dependent on US and Chinese economies could be on a roller coaster.
2. Gains for Indian Technology Firms: The Indian tech ecosystem will be greatly benefit from DeepSeek’s open-source model as Indian developers could use this technology.
3. Investments in AI: With AI taking center stage, India is poised to gain investment for AI-focused startups and infrastructure.
Challenges
In the context of the AI race, opportunities and challenges go hand in hand:
1. Tensions Between Nations: India may be impacted due to the ongoing trade tensions stemming from the rivalry between the United States and China.
2. AI Policy: Indian authorities need to formulate effective AI policies if they wish to compete economically on a global scale.
3. Infrastructure and Skills Investment: India’s AI competitiveness depends on greater investments in AI infrastructure and talent development.
Latest News Update
The latest news update on the website chat.deepseek.com shows the new registration process is busy because of large-scale malicious attacks. Whereas registered users can log in normally.
Conclusion
Indeed, the AI global race started by the USA and followed by China is altering technology, economy, and international chips. DeepSeek's innovations put India at a sharp end regarding AI policy, infrastructure, and challenges to tackle. By being gifted and forgiven on open-source endeavors India might mold itself as an active participant in the AI field. The way forward is thus envisioned to be a mixture of collaboration, competition, and wise craft.
