Deepseek’s AI model has sent shockwaves through the financial world. Marc Lussy, an expert in fintech and AI, analyzes how China’s rapid advances could change the Swiss banking sector—and why the West wasn’t prepared.

Mr. Lussy, Deepseek’s presentation caused a major stir. Were you surprised?

I didn’t expect China to take the lead in this field just yet—I would have anticipated breakthroughs in image recognition, autonomous driving, and robotics first.

However, it was only a matter of time before a Chinese company like Deepseek made a breakthrough.

Why?

China has a wealth of highly talented and hardworking engineers whose ambition drives progress. While large language models (LLMs) face structural disadvantages—such as fewer publicly available training datasets compared to English and the linguistic complexity of the Chinese language—these challenges are not insurmountable.

The reaction in the West was intense. Chipmaker Nvidia lost $600 billion in market value overnight…

That doesn’t surprise me. The West has little understanding of China, which is why the shock and uncertainty were so great. And uncertainty is poison for the markets.

What was the reaction in China?

There were strong political signals. On January 20, Premier Li Qiang, a close confidant of Xi Jinping, hosted a high-level symposium and invited select speakers—one of whom was Deepseek’s founder, Liang Wenfeng. This was a highly symbolic endorsement.

And among the general public?

There is a strong sense of pride, especially among younger generations. This could serve as a much-needed catalyst for renewed innovation. Many young Chinese, who have only ever known a rapidly growing and prosperous China, have been growing increasingly pessimistic.

«The West has little understanding of China.»

The restrictions on well-known entrepreneurs and innovators in recent years have also made it harder to inspire young people to pursue entrepreneurship.

What are China’s ambitions in AI?

The Chinese government identified AI as a strategic priority early on, closely linking it with robotics and autonomous driving.

«China is already more digitalized than the rest of the world.»

With a declining birth rate, increasing productivity is essential. AI is bound to play a key role in China’s economic future.

China is already more digitalized than the rest of the world—whether in payments, IoT, or the digital central bank yuan. The possibilities are almost limitless.

Where is AI heading in the medium term?

Deepseek is ushering in a new dynamic by enabling its model to run on smaller computing units. This eliminates the need for a constant online connection, paving the way for more compact, standalone AI-powered tools.

I expect significant advancements from the Deepseek team. Since 2023, founder Liang Wenfeng has been pursuing the development of Artificial General Intelligence (AGI). He is not interested in creating just another ChatGPT clone.

You have connections within Deepseek’s inner circle. Who is Liang Wenfeng?

Before the launch of Deepseek R1, Wenfeng was only known in certain circles. Then came the moment that changed everything—his public appearance alongside Premier Li Qiang catapulted him into the spotlight.

«Liang Wenfeng is exactly the kind of unassuming figure that many—especially in the West—tend to underestimate.»

He is extremely intelligent and reserved. Wenfeng is exactly the kind of unassuming figure that many—especially in the West—tend to underestimate. He is the textbook definition of a Chinese tech nerd.

His story proves that innovation does have a place in China. The common belief is that China’s system does not foster groundbreaking ideas, which is not entirely wrong. But there are exceptions—Wenfeng is one of them.

What does AI’s progress mean for Switzerland’s financial center?

The pace of AI-driven transformation in the financial sector will accelerate. Put simply, Deepseek is reshaping Switzerland’s financial industry.

I believe the Swiss financial sector will place greater emphasis on client consultation rather than on managing products and portfolios.

«Chinese AI products will establish themselves in Western markets.»

However, client interactions will increasingly follow a hybrid model, while portfolio management and investment selection could become fully automated through AI.

As AI models become even more reliable, the impact will be profound. If a provider develops a solution based on AGI, the financial sector will face yet another seismic shift.

Deepseek’s responses are monitored by the Chinese government. Can its AI still succeed in the West?

Yes, Chinese AI products will establish themselves in Western markets as long as they are superior or at least cheaper than Western alternatives.

A potential ban, particularly from the US, is possible but would be driven primarily by the economic interests of American tech giants. However, the rollout of Chinese AI cannot be completely prevented.

Currently, around ten Chinese AI models are competing with Deepseek—and this is just the beginning. If the reported performance figures hold up, the West can hardly afford to ignore them. Failing to adopt these technologies would result in a competitive disadvantage.

OpenAI has accused Deepseek of using its data. How do you assess these allegations?

These accusations seem hypocritical. OpenAI itself is known for scraping massive amounts of data from the internet, often disregarding intellectual property rights and incorporating content from personal data, social media, and developer source code into its training models.

Marc Lussy has 35 years of experience across various fields including consultancy and banking. He is currently a partner at IBO, an investment performance comparison network based on compiled data from real portfolio management strategies. Previously, he also worked at Banque CIC, Cantonal Bank of Grisons and Credit Suisse.