DeepSeek launches AI revolution: Impact on Korea's IT industry

Welcome to Within The Frame where we bring the most pressing issues across the globe into focus, I'm Kim Mok-yeon.

The global AI landscape is undergoing a seismic shift with the emergence of DeepSeek's groundbreaking generative AI model, R1, which has sent shockwaves across the tech industry.

Developed by China-based startup "DeepSeek," R1 is being hailed as a formidable competitor to OpenAI's models, showcasing unprecedented performance despite being built with just a fraction of the budget typically required for such large-scale AI projects.

What sets DeepSeek apart is its "open-source approach" and the use of cost-effective, older-generation hardware—a strategy that challenges the traditional AI development model and opens new doors for innovation.

In today's Within The Frame, we explore the impact of DeepSeek R1 on the global AI market and its implications for the future of the AI industry. For this, we invite Sung Soo Eric Kim, Adjunct Professor at Yonsei Graduate School of Business. Welcome, Professor.

Also joining us via Skype is Ashique KhudaBukhsh, Assistant Professor of Software Engineering at Rochester Institute of Technology. Great to have you with us.

1. (KhudaBukhsh) Let's begin with Professor KhudaBukhsh, The Chinese open-source AI model "DeepSeek R1" was released on January 20th, and its low-cost, high-performance technology has shocked the global AI market. As an AI expert, how do you assess the performance of DeepSeek and China's AI capabilities?

2. (KhudaBukhsh)The most noteworthy part is that DeepSeek R1 was reportedly developed in just two months with 10 percent of the research funds of big tech companies. Unlike the closed AI models developed by American big tech companies such as OpenAI, DeepSeek has adopted an open-source approach. Professor, What is the significance of this difference?

3. (Kim) Now to Professor Kim, what impact will the competition between "open-source" and "closed-source" AI development approaches have on the AI industry? Also, will the spread of open-source methods be an opportunity for South Korean companies, who are later entrants in the generative AI field?

4. (Kim) Despite U.S. restrictions on the export of high-performance AI chips, China's AI technology development continues to accelerate. Does this mean the U.S. sanctions have not been effective? What is your outlook on the future of the U.S.-China power struggle?

5. (KhudaBukhsh) Meanwhile, governments around the world, including that of South Korea, are ramping up efforts to block the use of DeepSeek. Professor KhudaBukhsh The ongoing debate about data leakage with generative AI is a concern, but why have countries only taken action against DeepSeek specifically?

6. (KhudaBukhsh) Meanwhile, the Trump administration is pushing forward with a 500 billion-dollar AI infrastructure investment project called "Stargate." Professor, what impact will the emergence of DeepSeek have on Trump's AI policy direction, including Stargate?

7. (Kim) Then Professor Kim, amidst the strong competition from China, OpenAI CEO Sam Altman visited South Korea last week and made it clear that the company plans to expand its presence in the Korean market. Why is Sam Altman focusing on South Korean companies?

8. (Kim) In particular, the meeting between Sam Altman, Samsung Electronics Chairman Lee Jae-yong, and SoftBank's Masayoshi Son has garnered attention. It is reported that the main topic was "Stargate." If Samsung participates, what role will it play? Also, will it be an opportunity for Samsung to make a comeback?

9. (KhudaBukhsh) The global AI industry is facing a dramatic shift due to DeepSeek from China. Prof. KhudaBukhsh, How do you foresee the future of the AI power struggle? Also, what direction should South Korea's AI-related technologies take?

10. (Kim) South Korea is set to implement the AI Basic Act, which will support the development of the AI industry starting next year. What are the challenges South Korea must address to enhance its AI industry competitiveness Prof.Kim ?