The rapid rise of the Chinese AI startup DeepSeek has caught many in the West off guard. However, this reaction may reveal more about Western perceptions of China than about China itself.

A New AI Contender

Who would have thought? A Chinese startup that was virtually unknown in the West until this week has suddenly emerged as a leader in artificial intelligence language models. DeepSeek? The name is now likely being spoken with a mix of respect and anxiety in the hallways of major U.S. tech corporations, whose stock prices have been rattled by this unexpected competitor from China.

But just how surprising is this development? China’s high-tech sector has repeatedly made waves with groundbreaking innovations. From TikTok’s global dominance to the rapid expansion of Chinese electric vehicles, the country has consistently demonstrated its ability to disrupt global markets. Anyone who has visited China in the past decade has witnessed firsthand how deeply digitalization has permeated nearly every aspect of daily life—often in ways that seem overwhelming to those accustomed to Europe’s slower technological evolution.

China’s leadership has set highly ambitious goals for its tech sector, with a particular focus on artificial intelligence. Given these efforts, was it only a matter of time before China achieved a major breakthrough in AI, despite U.S. sanctions? Perhaps the West’s astonishment at DeepSeek’s success says more about lingering underestimations of China than about the company itself.

More Than Just National Pride

This isn’t the first time Western businesses have failed to take their Chinese competitors seriously—often at a steep cost. Take the automotive industry, especially Germany’s major car manufacturers, which long believed that their proven strategies would continue to secure strong profits in China. They failed to recognize that China was not standing still.

The Chinese government identified the strategic potential of electric mobility early on, supporting its growth with incentives for consumers and subsidies for manufacturers. In just a few years, a booming domestic market emerged—one that has now left Western automakers struggling to keep pace. Today, China leads the world in electric vehicle exports. In cities like Shanghai and Beijing, ultra-connected electric vehicles dominate the streets, making even Tesla models appear outdated and outpaced.

As DeepSeek’s rise demonstrates, the West continues to underestimate China’s ability to innovate and compete on a global scale. The question is: how many more surprises will it take before perceptions finally catch up with reality?