28 June 2025

What Democracies Get Wrong About Chinese AI

Kai-Shen Huang

Democracies are increasingly anxious about China’s AI rise, but not always clear about what exactly is at stake. The sudden emergence earlier this year of DeepSeek, China’s most popular open-weight model to date,

 brought the issue to the surface. Western commentary has since swung between alarm over Beijing’s rapid progress and a lingering belief that it still lags behind. For example, OpenAI indicates that China is rapidly narrowing the gap, even if it does not yet lead. Jensen Huang, CEO of NVIDIA, stated plainly: China is “not behind.” His remark did more than challenge a technical narrative. It sharpened a mounting unease that few countries have the strategy or readiness for what China’s expanding AI footprint might mean.

This is where much of the current alarm goes astray. The disruption DeepSeek represents lies not necessarily in surpassing Western frontier models, but in showing that China can sustain a commercially viable AI ecosystem, capable of producing services that are globally competitive in both performance and price. Yet public anxiety continues to fixate on the fear of falling behind in a model race, while missing a more immediate blind spot: the lack of a coherent strategy to confront the systemic risks posed by China’s accelerating deployment of AI services within democratic societies.

Taiwan’s Chinese AI Moment

Nowhere is this fear of falling behind more palpable than in Taiwan. DeepSeek was a wake-up call for Taiwanese policymakers. It forced a national debate not just about the scale of China’s AI progress, but also about Taiwan’s own slow, fragmented efforts to develop a homegrown language model of competitive scale or visibility. The question “Why can’t Taiwan have a DeepSeek of its own?” quickly became a source of political pressure and institutional soul-searching.

The main reason this anxiety has taken hold so quickly is that it found a domestic target. TAIDE, Taiwan’s state-backed initiative to build a language model reflecting its linguistic and cultural specificity, became an unflattering point of comparison. DeepSeek’s scale and openness turned it into a mirror, exposing TAIDE’s limitations and pushing it into the spotlight of public scrutiny.


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