Why the World Should Be Cautious About China’s Low-Cost AI

China’s rapidly expanding artificial intelligence (AI) industry is raising concerns among policymakers and security experts, as companies such as DeepSeek offer powerful AI models at a fraction of the cost of their Western competitors, potentially creating new economic and data-security risks for countries that adopt the technology.

A report in the UK newspaper The Guardian highlights how Chinese developers are releasing new AI models at a rapid pace, often at significantly lower costs than comparable US products. This presents businesses and governments with an attractive choice: affordable, open AI systems that can be customised for specific needs, or more expensive American alternatives that may include features and services users do not require.

However, the low cost of Chinese AI could come with significant questions about data privacy and national security.

According to the report by Phillip Inman, DeepSeek’s online chatbot privacy policy states that it collects user prompts and uploaded content, processes and stores personal information in China, and allows information to be disclosed to Chinese authorities under specified circumstances.

Michael Wooldridge, a professor of AI at the University of Oxford, said it was reasonable to assume that information entered into the chatbot could potentially be shared with the Chinese state.

The concerns extend beyond individual users to governments, public institutions and businesses handling sensitive information. Widespread adoption of inexpensive Chinese AI systems could create long-term dependencies on foreign technology and raise questions about who controls the data, infrastructure and services on which essential operations rely.

The Guardian report argues that the UK should resist becoming dependent on cheap Chinese AI, strengthen oversight of American AI companies and support domestic and European technology providers. It warns that dependence on Chinese products, ranging from electric vehicles to AI, could weaken local industries and compromise data security.

The report also draws a comparison with China’s expanding exports of low-cost electric vehicles, which have intensified competition for established automobile manufacturers in other countries. Affordable AI could pose an even greater challenge because it can be integrated into a wide range of industries, public services and government operations.

China’s growing technological ambitions are also unfolding against the backdrop of its expanding economic and military influence. The report points to Beijing’s efforts to strengthen its naval capabilities in the Pacific, its strategic interest in Taiwan and the island’s central role in the global semiconductor industry.

It further contrasts China’s approach with Russia’s reported use of AI to support cyber operations targeting European government agencies and businesses. While Russia has been associated with efforts to disrupt institutions and create instability, the report suggests that China’s broader strategy could involve expanding the global market for its technology and building lasting economic relationships with countries that adopt it.

Such relationships could gradually turn into strategic dependencies if governments and businesses become reliant on Chinese systems for essential services, data management and technological infrastructure.

The challenge for governments, therefore, is to balance the immediate benefits of affordable AI with the longer-term implications for privacy, economic competitiveness and national security. As AI becomes increasingly embedded in everyday operations, decisions about which technologies to adopt could have consequences extending well beyond cost savings.

Advertisement