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The success of DeepSeek, a Chinese AI startup, has thrown a wrench in the middle of what many observers thought were largely American, or at least democratic, gears.
While the world seems to have been woken up by an AI surprise, DeepSeek’s breakthrough should be a timely reminder for Australia of the need to reduce consumer dependence for technology on China through a proactive and strategic approach to AI. The Australian government should not want our public to be getting its world view from only the ‘facts’ Beijing permits.
DeepSeek’s development of ‘R1’, a highly efficient and cost-effective AI model, has sent ripples through the global tech community, challenging the perceived dominance of the US in AI and raising questions about the effectiveness of current export controls in preserving technological advantage.
DeepSeek’s R1 model represents a significant departure from conventional AI development paradigms. Reportedly twice the size of Meta’s open-source model and trainable at a fraction of the cost of US-developed models, R1 has fuelled speculation that DeepSeek may have circumvented export controls to access restricted US-made Nvidia chips.
While DeepSeek’s CEO has denied these allegations, attributing the company’s success to innovative development methodologies, he has also openly acknowledged that US export controls have inadvertently spurred his efforts to reduce China’s reliance on American technology. This statement highlights a broader trend of indigenous innovation in China, driven by a desire to achieve technological self-reliance and reduce vulnerability to external pressures. If true, it doesn’t mean the US export controls were so ineffective to be dropped, but rather that the US and its allies have more work to do.
DeepSeek’s emergence as a major player in the AI arena has profound implications for AI in Australia.
First, it challenges the prevailing assumption that US technological leadership, which has long underpinned Australia’s strategic and economic partnerships, can be taken for granted in the medium term.
Second, it shows that while export controls are a tool for maintaining technological advantage, it needs to be part of a full toolbox in an era of rapid technological diffusion and globalised innovation networks.
Third, and most importantly, it underscores the urgent need for Australia to cultivate sovereign AI capabilities. In this regard sovereignty is not going it alone, but not relying on our partners, even our great ally the US, to do all the heavy lifting. Over-reliance on China is a national security threat while overreliance on the US is national negligence. This is why in addition to Australian investment in indigenous AI capabilities, doubling down on the AUKUS partnership is required to safeguard our national interests, maintain our competitive edge, and ensure our strategic autonomy in a technology-driven world. And it is why Australia, the UK and the US made AI one of the six advanced capabilities of AUKUS Pillar 2.
Australia cannot continue the current approach of responding to each new tech development—whether it’s HikVision surveillance, TikTok data manipulation, smart car communications or the risk of AI facts delivered by the Chinese government. As such, we must adopt a comprehensive tech strategy that covers AI.
This strategy should encompass the following key elements:
—Investing in sovereign AI capabilities: Increased investment in AI research and development is essential, along with the development of a national AI strategy that prioritises areas of national interest, such as defence, cybersecurity, and critical infrastructure. This investment should focus on building a robust and resilient AI industry that can support innovation, drive economic growth, and enhance national security.
—Fostering international collaboration: In addition to AUKUS, strengthening partnerships with like-minded nations, such as Canada, Japan, and South Korea, is crucial for collaborative AI development, knowledge-sharing, and the establishment of international standards and norms for responsible AI development and deployment. Ideally groups like the Quad and the G7 plus should take this on.
—Promoting ethical AI development: Australia must play a leading role in promoting ethical AI development and ensuring that AI systems are designed and deployed in a manner that respects human rights, promotes fairness, and safeguards against bias and discrimination but that does not politically censor.
—Engaging the public: A public education campaign is necessary to raise awareness of the potential benefits and risks of AI, foster informed public discussion, and ensure that AI development and deployment align with society’s values and expectations.
As former Google CEO Eric Schmidt wrote yesterday: ‘DeepSeek’s release marks a turning point … We should embrace the possibility that open science might once again fuel American dynamism in the age of AI.’
Australia should work with the US and other partners to ensure it is our ‘open science’ and not Beijing’s closed world that is keeping the world informed. This underscores the importance of international engagement to shape the global AI landscape.
By taking a strategic approach that recognises the enormous impact that AI will have on every field, by investing in sovereign capabilities, by fostering international collaboration, and by promoting ethical AI development, Australia can navigate the AI revolution and secure its place as a leader in this transformative technological era.
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