China accelerates AI push as ByteDance and DeepSeek roll out upgrades

The latest AI model launches by ByteDance and DeepSeek underscore China’s ambition to close the technology gap with the West through open-source innovation, while broader momentum is evident with Alibaba and Baidu advancing their Qwen and Ernie models

China’s artificial intelligence (AI) ecosystem is expanding at a rapid pace, as domestic technology firms continue to unveil advanced models designed to rival offerings from global players such as OpenAI and Google. The latest announcements from ByteDance and DeepSeek highlight the country’s ambition to narrow the technological gap with the West through aggressive innovation and an open-source approach.

ByteDance expands AI portfolio with Seed-OSS-36B

TikTok parent company ByteDance introduced three versions of its Seed-OSS-36B model on Thursday (August 21), strengthening its footprint in the AI space. The model is designed with an extended context window and features aimed at developers, providing greater flexibility and performance. According to ByteDance, recent benchmark comparisons show that the new model is on par with—or in some cases surpasses—similar-sized systems released by OpenAI, Google, and Alibaba.

The launch builds on ByteDance’s entry into AI foundation models last year with the Doubao LLM. By keeping Seed-OSS-36B open source, the company is reinforcing China’s strategy of promoting broader adoption and faster iteration through community-driven development.

DeepSeek enhances V3 with local chip optimization

Meanwhile, DeepSeek upgraded its flagship V3 model, incorporating faster processing capabilities and features tailored to Chinese-produced chips. This optimization comes at a critical time, as China is prioritizing self-sufficiency in semiconductor technology to mitigate the impact of U.S. export restrictions.

DeepSeek gained attention earlier this year by developing competitive AI models at a fraction of the cost incurred by Western counterparts, positioning itself as a disruptor in the market. The company’s latest update underscores China’s focus on ensuring that domestic hardware and software ecosystems evolve in tandem.

Growing momentum in China’s AI industry

The wave of new releases reflects broader momentum in China’s AI sector, with major firms such as Alibaba and Baidu also rolling out updated versions of their Qwen and Ernie large language models. The progress has fuelled optimism in Chinese equity markets, with technology-focused exchange-traded funds (ETFs) like KraneShares CSI China Internet ETF (KWEB) and iShares MSCI China ETF (MCHI) climbing nearly 28% so far this year—well above the S&P 500’s 8.3% gain.

However, industry growth is tempered by geopolitical headwinds. Reports this week indicated that Nvidia has asked suppliers to halt orders for its H20 chips, which were specifically designed for the Chinese market under U.S. trade rules. Despite these challenges, China’s AI drive continues to gather pace, signalling a new phase in the global competition for leadership in artificial intelligence.