China's integration into the world economy since the WTO agreements has been a wild ride, to put it mildly. With the country becoming a «strategic rival» and disagreements rising across swathes of topics, DeepSeek is a good opportunity to take stock and reflect on what China can bring positively to the world, Jacques-Aurélien Marcireau of Edmond de Rothschild AM, writes in an article for finews.asia.
DeepSeek announcements in the GenAI field have two major characteristics that caught our attention: first, it helped reduce by a 10x factor versus western competitors the cost of computing, therefore good for making GenAI more viable and environmentally friendly.
Second, it is open source, meaning that instead of surrounding advancement with secrecy, China this time actively contributes to the open-source community, sharing knowledge for everyone’s benefit.
Being Creative
Beyond the concrete benefits, the fact of making strides without disproportionate financial firepower also invites us to positively rethink our place as Europeans in the coming world: by being creative we can overcome some of the «tech debt» that some doomsayers would like us to think as insurmountable.
Beyond DeepSeek, which at the end of the day is incremental to the long arc of the AI world and maybe not as revolutionary as today’s headline and market reaction suggest, one of the often underestimated topics is healthcare.
More Drug Discoveries
China is innovating in the healthcare sector, and it would be hard to argue against more drug discoveries and ways to treat patients. US-based pharmaceutical companies are making an increasing number of deals to in-license early-stage assets from China biotech. Some of the best and most innovative drugs, including antidrug-conjugates drugs in oncology, were licensed by Chinese companies.
Last but not least, in a world where industry concentration is rising, and poised to rise even more given President Donald Trump's deregulation agenda, it is worth noting that both theoretically and empirically, innovation tends to suffer from too much concentration.
Much-needed Competition
Why innovate when you can just extract value from your dominant position? In many cases, China Inc. brings much-needed competition to keep the incentive to innovate vital. The question about whether this competition is fair is of course a matter of debate – and rightly so –, but in DeepSeek's case, there is none.
Jacques-Aurélien Marcireau is Co-Head of Equities at Edmond de Rothschild Asset Management.
