‘Chinese companies are born to make money’: AI pioneer Kai-Fu Lee on the 3 biggest myths about China’s AI race efforts
Profit motive One of the biggest misconceptions about Chinese companies is that they are more focused on winning the AI race and becoming the first to develop artificial general intelligence (AGI)—widely considered the ultimate goal of AI development—than on building profitable businesses.
Key points
- efforts to gain an edge over China in the AI race by restricting its access to the most advanced chips, one AI pioneer says America’s efforts have instead helped create a new generation of Chinese AI models that are quickly catching up to their American counterparts.
- In response to these limits, which American companies don’t face, Chinese AI developers have built open-weight models that Lee estimates are now just six to 12 months behind those created by some of the biggest American AI companies, including OpenAI as well as Anthropic—which is reportedly preparing to go public as early as next week.
- He pointed especially to DeepSeek, a Chinese startup that stunned American AI companies in early 2025 by releasing a highly capable AI model by the same name that it claimed was trained using significantly less computing power than its American competitors.
“It’s not so much to win AGI or win the race.” He compared questions about the profitability of the current wave of Chinese AI developers like DeepSeek with those surrounding other Chinese tech companies like Pinduoduo, Meituan, and ByteDance.
Additional details
- Because of their resourcefulness, Chinese companies can develop and operate models for as little as one-tenth the cost of their American competitors, making their products attractive to businesses that don’t want to pay premium prices for AI services.
- Motives and competition A second misconception, Lee said, is that China’s embrace of open-weight models and open-source technology is part of an organized government effort to compete with America.
- These tech giants’ business models were also initially questioned before they became some of China’s biggest companies.
- “The Chinese companies are naturally parsimonious; not just the startups,” he said, adding that “prudence and survival instinct” are more important to them than the pursuit of AGI.
- Kai-Fu Lee, an AI entrepreneur and former president of Google China, said in a Fortune Daily interview that U.S.
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