What's happening in China right now?
Deep-seated stories from our Beijing correspondent, delivered in-depth from the field.

A three-dimensional investigative report on behind-the-scenes information and people you've never heard of before.
What's the inside story behind China's AI offensive that shook up AI hegemony and the 21st-century hegemony war?

The "anticipated shock" thrown at the world by Liang Wenfeng, "China's Altman."
China's cutting-edge technology development strategy has sent Silicon Valley into a panic.
- The founder of the 'traitor to the people' fund became a 'hero of the people' overnight.
"1% of geniuses do what 99% of companies can't." - DeepSec's hiring philosophy
- Hong Kong's Hang Seng Index rose 15.41%.
Alibaba's stock price rose 69% (YTD to February 20)

I really want to tell this story to my readers.
The Deepsick Shock was not a fiction, it was a 'foreseen shock'.
The incident of DeepSec's launch of a high-performance AI model has been portrayed as a "mystery" on social media and in foreign media, but given China's "technological breakthrough" strategy, it was inevitable.
The Chinese party and government rapidly built an infrastructure for advanced technological innovation through a socialist-style national mobilization system (mobilizing industry, academia, research institutes, and the entire population), and by putting flexible, genius startups on top of it, they successfully broke through the US technological blockade against China.
China's "rigidity" in mobilizing all national resources to achieve its goals, combined with its "flexibility" in deploying young geniuses to the front lines, has produced results.
This strategy, which can be called a 'collaboration between the state and genius,' has proven effective and is sure to be used more widely in the future.

That's why Deepseek Shock is called 'Deepshock'.
Because it is not a temporary phenomenon or something that appeared by chance, but the starting point of something that will always happen in the future.
The emergence of DeepSec demonstrates that even if the United States controls the export of equipment and technology, it will no longer be able to stop China's technological rise.
Even though we mobilized our allies and applied pressure from all sides, didn't we face limitations?
China has already succeeded in producing 7nm semiconductors using older-generation exposure equipment, DUV, in 2023, and has secured advanced technologies in its electric vehicle and battery industries, backed by a huge market and government support.
It is no longer easy to expect South Korea to benefit from the US's containment of China.
Rather, the expectation that the United States will tie China's hands and feet in the field of advanced technology is blinding us and making us complacent.
--- pp.7-8

Silicon Valley was shocked, but I suspect that Jensen Huang, CEO of Nvidia and DeepSec's biggest 'victim,' was somewhat aware of it.
He was in Beijing on January 20th, the day of US President Donald Trump's second inauguration.
He praised China as "the greatest market in the world" and poured out words full of goodwill, saying, "China is the country that 'raised' Nvidia, and Nvidia and the Chinese technology industry have grown together."
He may have anticipated the Deepsick shock, but he at least knew that in a rapidly changing world, he could no longer ignore China.
--- p.10

However, questions persist as to why Huanfang Lianghua purchased such a large quantity of advanced semiconductors from the United States.
Coincidentally, the timing of his massive purchase of A100s, essential for developing high-performance AI models, was just before the United States banned the export of cutting-edge AI semiconductors to China in September 2022.
Accordingly, some have raised suspicions that Huanfang Lianghua may have made some kind of deal with Nvidia under government orders in preparation for the US's technological sanctions against China.

It is also possible that the Chinese government tipped him off to a strategy for securing advanced semiconductors in advance.
The period when Liang Wenfeng purchased semiconductors in large quantities was when the US-China technology war was showing signs of escalating, and Chinese big tech companies were also gradually starting to 'buy up semiconductors' as a preparation for the future.

--- p.53

"In my personal opinion, Liang Yuanfeng was not a person who was obsessed with money because he had too much money.
Starting around 2019, the company showed greater interest in AI technology development than in managing Huanfang Lianghua, and gradually delegated management to management.
A few years later, it seemed that Huanfang Lianghua was no longer his main occupation, but rather AI technology research, and he wanted to focus on things that would benefit society.
A global investment industry insider from Shanghai was a bit more blunt.
He said, "The sequence of events—Huanfang Lianghua stopping new fundraising in 2021, Liang Wenfeng making a large-scale anonymous donation the following year, and Huanfang Lianghua founding Deepseak in January 2023—is reminiscent of a child being punished after being scolded." He added, "At a time when the authorities' investigation and pressure on companies in China's financial industry were at their peak, Liang Wenfeng focused on an industry that he was interested in and that the country wanted."

--- p.65

It is easy to explain why there are almost no 'sea turtles' (students who returned to Korea after studying abroad) among the members of Deep Seek.
If you are overseas, you cannot verify from a young age or get hands-on experience on the ground.
Above all, there were already enough geniuses within China.
As I will explain in Chapter 2 of this book, by this time China's genius training system was already well established.
Just as with the first wave of Chinese internet companies like Alibaba and Tencent two decades ago, China's top talent has opted to work for homegrown tech startups rather than seek opportunities abroad or join multinational corporations.
There was also a widespread belief in every Chinese household that "the moment you become a skilled worker, wealth and fame are guaranteed."
The story goes that no parent would stop their child from working at a tech startup.
China is poised to compete with Silicon Valley in ambition, resources, and influence.

--- p.82

"Whenever China faces a challenge requiring national innovation, it borrows the brains and passion of young, flexible 'child soldiers' to compensate for the inevitably rigid limitations of a government-led economy," said a Beijing-based tech industry insider.
China's "casting principle" of putting young geniuses at the forefront rather than seasoned, white-haired generals is surprisingly practical.
So, if we were to name China's cutting-edge technology breakthrough strategy, wouldn't "Collaboration between the State and Genius" be an appropriate name?
The Chinese government leads industry, academia, and research to build a solid foundation of cutting-edge technology, and then releases geniuses on top of it.
It seems that Liang Yuanfeng confidently said such things because the country had its backing.

“OpenAI is not God.
“You can’t stay at the forefront forever.”
--- p.118

It's not unusual for geniuses to start up startups or find jobs in China.
When asked by Chinese media how DeepSeek, a startup, managed to attract such talented individuals, Liang Wenfeng replied, "Because we are doing the most difficult job."
“What attracts the best talent the most is solving the world’s most difficult problems.
"There has been so little innovation in China so far that they are desperate for opportunities to showcase their talents," he explained.
--- p.131

Ultimately, in China, the "how to use genius" is to serve as a "breakwater" so that genius can achieve technological goals without being swayed by external storms.
In fact, China's leading companies in cutting-edge industries such as semiconductors and drones have been displaying their genius with the support and protection of the state.
The cutting-edge technology industry is characterized by small initial markets and large investment scales. In foreign countries such as Korea and the United States, large corporations dominate the market. However, in China, state-selected startups, backed by state-owned capital and preferential policies, play a central role in the industrial ecosystem.
Representative examples of this collaboration between genius and the state include YMTC (NAND flash) and CXMT (DRAM), the two pillars of China's memory semiconductor industry; HiSilicon and UniSOC, the top two fabless (semiconductor design) companies in China; and DJI, which accounts for 75% of the global drone market.
All of these companies are also unlisted.

--- p.151

As the 'DeepSeeker Ban' spread globally, the consolidation of Chinese companies also accelerated.
China's largest messenger company, telecommunications company, and even automobile company are pushing DeepSeak.
Tencent, which operates China's super app WeChat (the Chinese version of KakaoTalk), announced on February 15, 2025, that it would integrate DeepSearch's AI into its services.
Moore Threads Technology, an AI semiconductor design company founded by former Nvidia China general manager Zhang Jianzhong, announced that it plans to open an AI data center based on its own semiconductors to service DeepSec's AI models.
A list of about 10 companies that have stepped forward to provide DeepSearch services with their own technology, similar to Moore's Thread Technology, is circulating in China under the name of "patriotic semiconductor companies."
--- p.181

China's state-run Global Times reported that "South Korea blocked DeepSeek due to so-called 'data collection concerns,'" and that "China will resolutely protect its companies' legitimate rights."
Chinese IT media outlet ZAKER wrote, “Anyone who is not envied is stupid,” and “Countries like Korea, which call themselves science and technology powerhouses, have expressed their bewilderment.”
“Korea, as a country competing industrially with China, has great anxiety about China’s rise in AI,” said blogger Darao Zhuo, who has 150,000 followers.
“It was a political decision for the Korean government to step in and blockade Chinese technology,” he wrote.

--- p.214

Africa, a key target of China's "One Belt, One Road" initiative and the top destination for Foreign Minister Wang Yi's overseas tour, is embracing DeepSeak without resistance.
In countries with underdeveloped AI industries, such as South Africa and Nigeria, the use of DeepSearch is already being observed.
If China makes the Global South its "deep-secret sphere of influence," it may establish an AI order that can rival the United States.
DeepSearch was developed at a low cost and is open source, making it accessible to anyone, providing a new entry point into the AI ​​industry for developing countries.
In some countries, the United States, which monopolized the advanced AI industry based on expensive semiconductors, is portrayed as the "villain," while China, which brought open-source AI, is portrayed as the "benefactor."
Americas Quarterly, a New York-based South American political analysis media outlet, wrote, "It is true that China has brought about 'AI democratization' through DeepSec, enabling resource-poor countries to jump into AI development at a low cost," but added, "South American countries should be wary of China's 'AI diplomacy' as they move beyond the West's hardware (semiconductor) advantage."

--- p.224