With telecom carriers on board, DeepSeek emerges as national AI powerhouse

The frenzy over DeepSeek, a trending artificial intelligence application, has witnessed a milestone in China after the home-grown open-source large language model (LLM) was adopted by three state-owned telecommunications giants that boast over one billion users, Shanghai Daily learned on Monday.

The country's top three telecom operators, China Mobile, China Telecom and China Unicom, have integrated DeepSeek into their infrastructure, including cloud services, leveraging capabilities to enhance services ranging from network optimization to customer interactions, the Ministry of Industry and Information Technology (MIIT) said in a statement.

The adoption will "promote the universal application of latest artificial intelligence technologies," said the MIIT, China's top industry regulator.

With the latest adoption by the state-owned giants, DeepSeek, whose daily active users exceed 30 million, seems to have won national-level support, which can help China compete with the United States in the AI landscape. Earlier, DeepSeek had support in the tech industry landscape with partners including Huawei, Alibaba, Tencent and JD.com.

Also on the weekend, DeepSeek's influence expanded with its deployment on the National Supercomputing Platform. This collaboration, coupled with the use of domestic RISC-V chips, unlocks new possibilities for edge computing and cost-efficient AI deployment. The move aligns with China's push to reduce reliance on foreign hardware and build an independent AI ecosystem.

DeepSeek's cost efficiency (training costs 3-5 percent of global peers like OpenAI products) and compatibility with Chinese chips like Huawei's reduce dependency on foreign technologies, fostering a self-reliant AI supply chain. It is also democratizing access to advanced AI, potentially spurring new business models and industry-wide productivity gains, industry insiders said.

DeepSeek, with its low-cost and high-performance qualities, is creating a "new wave" in China's generative AI market. More commercial applications will come to the market with accelerated pace, according to Cheng Meng, an analyst with research firm IDC.

New business opportunities

Integration with DeepSeek will help the three Chinese carriers to accelerate telecom operators' cloud-computing revenue growth, with analysts predicting a "profitability and valuation re-rating" for the sector.

It makes sense for the carriers, who are seeking diversify their income source from the traditional voice and data services. Integrated with low-cost DeepSeek, they can develop various AI-powered services like voice control and personal assistance, targeting groups like the elderly and tourists, analysts said.

China Mobile closed 1.72 percent higher at 110.00 yuan (US$15.1) in Shanghai on Monday. China Unicom jumped 4.40 percent while China Telecom surged 6.59 percent, compared with a 0.56 percent gain of the benchmark Shanghai Composite Index.