DeepSeek and RedNote: China 2 - U.S. 0

Recently, there have been two significant events—one more media-driven than the other—that have triggered an escalation in what many specialists call the Second Cold War, in this case, between China and the United States. The first was the phenomenon of migration from a “banned” Chinese social network in the United States (TikTok) to another—also of Chinese origin—called RedNote. Days later, the second major event and milestone for the Mandarin country occurred, which was the totally unexpected appearance for some and surprising yet nothing unexpected for others: the launch of DeepSeek, the “competitor” to ChatGPT.

But what is DeepSeek? What is RedNote?

It's worth starting with the most recent and well-known event: the new Chinese AI.

DeepSeek

DeepSeek, whose full name is Hangzhou DeepSeek Artificial Intelligence Basic Technology Research Co., Ltd., is a Chinese company founded on July 17, 2023, specializing in artificial intelligence and developing Large Language Models (LLMs); that is, artificial intelligence models designed to process and generate natural language. So what’s new that has generated such a stir? Well, there are several reasons for its media, political, and financial impact.

Viral image on social networks of pre-market trading on January 27, 2025, after the emergence of DeepSeek, which has become China's banner.

Regarding the technical aspects, DeepSeek’s novelty can be summarized into three:

Firstly, until now, traditional artificial intelligence models used 32 bits of precision to perform their calculations with high accuracy, but this consumes a lot of memory and energy. DeepSeek's innovation here was reducing the precision to 8 bits, which meant four times less memory space. This alone cut the required memory by 75%, minimizing precision but retaining most of the relevant information, making it more accessible, optimal, and efficient.

Secondly, another novelty is its system of multiple tokens which, unlike most AI models that predict each token or word individually before moving to the next, DeepSeek, with its multiple token prediction technique, instead of predicting just one word at a time, generates several words and then checks to see if they are correct. This method is twice as fast—advantageous for, for example, real-time applications—and maintains 90% accuracy compared to traditional methods, allowing for savings in time and computational resources; thus, it reduces operational costs.

Finally, models like GPT-4 function as a monolithic neural network, meaning all knowledge is integrated into a single model, and every time a question is asked, the model processes all the information it has, even if only a specific part is needed. This consumes significant computational resources, as the model must consider all parameters, even those irrelevant to the query. In contrast, DeepSeek developers employed a method inspired by the Mixture of Experts (MoE) model, which uses multiple models specialized in specific types of problems or domains (like mathematics) to solve a problem. This way, upon a query, the system decides which “experts” to activate and combines their outputs to produce a final result. This reduces calculation costs during pre-training and improves performance during inference.

For these reasons (and more), DeepSeek generated not only a technological earthquake but also financial and political ramifications, as its AI model is nearly at par or, in some respects, ahead of the most advanced models from its competitors. Furthermore, it was developed at a significantly lower cost, is free to use, and is also open-source (unlike its competitor which is “Open” in name only), meaning its model can be downloaded, used, and altered freely and locally.

The DeepSeek model signifies a revolution because many companies will prefer it over others, both due to its lower cost and its open-source nature. If it had achieved a performance level similar to ChatGPT thanks to several million dollars, it would be just another news item in the race between the AIs of the U.S. and China; but what is revolutionary about DeepSeek is that it required much less investment—around 6 million dollars—with just over 2000 GPUs to train the model, compared to 100 million dollars, using estimates of 100,000 GPUs—perhaps more—that GPT-4 needed.

DeepSeek's significance lies not only in its technological innovation but also in the fact that China has achieved this—and many other things—despite the sanctions and restrictions imposed by the United States, which have focused primarily on limiting China’s advancements in the race for artificial intelligence, restricting its access to the most advanced chips. DeepSeek was at a clear disadvantage and still managed to accomplish what many thought impossible.

This is the same strategy the U.S. has been applying against China for years, which continues to fail. With the now-clear example of DeepSeek, along with telecommunications networks, cell phones, electric and autonomous vehicles, and a long list of categories in which China dethrones North America. It's the constant blunder of “American intelligence,” based on the false notion that China will eventually fall due to its model, not only of planned economy and socialist orientation but also politically that does not align with what the West understands as democracy. Under this assumption, the U.S. attempts to corner China, achieving greater unity among the Chinese people and their companies, and more support for the government (because they do support it, and it is one of the most supported globally); this is what the North American country should fear the most. The greater the pressure and exterior attack, the more unity, resistance, and struggle the Chinese people demonstrate (it’s crucial to remember the century of humiliation with the opium wars and Japan's unparalleled atrocities towards them).

The most amusing part of all this is that companies like Microsoft, NVIDIA, and Amazon have announced the incorporation of DeepSeek into their services. Moreover, DeepSeek also launched a state-of-the-art open-source image generation AI model.

One very relevant aspect of DeepSeek is that, besides being formed by a team where all members are under 35, none studied outside of China; they all completed their education in the People's Republic of China, and some haven't even graduated. A few years ago, Chinese citizens studying in Europe or the United States generally remained living in those countries; whereas, currently, the opposite happens: most graduates abroad return to the Mandarin country. At the same time, recently, Chinese companies are hiring fewer professionals graduated outside the Eastern country, as they consider them “less prepared.”

A large part of the world's AI experts are Chinese, leading us to the immense importance placed on education in this country, and often in the West, technology is fetishized, forgetting that it advances thanks to human capabilities. Last year, 40% of graduates in China were linked to STEM (Science, Technology, Engineering, and Mathematics), while in the U.S. it was 20%; furthermore, in China, about 1,500,000 engineers graduate each year, while in the United States, the number drops to 200,000.

DeepSeek team. Notably, women are in the majority.

On another note, another aspect that may have contributed to the decline of the U.S. stock market is that DeepSeek launched just one day after the announcement in the United States of the Stargate Project, “a new initiative aiming to invest $500 billion over the next four years to build new AI infrastructure for OpenAI (the creators of ChatGPT) in the United States,” in which “the first funders of Stargate are SoftBank (a Japanese multinational investment holding), OpenAI, Oracle, and MGX (an investment company from the United Arab Emirates dedicated to AI),” and “Arm (a British software and semiconductor design company), Microsoft, NVIDIA, Oracle, and OpenAI are the initial key technology partners,” according to the project’s official website.

In summary, DeepSeek achieved results similar to those of large companies—like Microsoft—with a much lower cost, fewer resources, developed by a young team exclusively trained in China, and in a matter of months.

DeepSeek represents a democratization (a central aspect of the Chinese socialist-oriented model is the democratization of the means of production) of technology thanks to its open-source policy, enabling anyone to access the code and observe how it works. It’s curious that this comes from a country often labeled as “non-democratic” or “capitalist” from the West; simply absurd.

RedNote

Now moving towards the truly unexpected and more interesting event: Xiaohongshu -RedNote in English (“little red book” in Spanish, a nod to Mao)- is a Chinese social media platform that combines lifestyle content with integrated e-commerce. Launched in 2013, it allows users to share product reviews, fashion tips, beauty advice, travel insights, and more, facilitating direct purchases from the app. Notably, it is estimated that 70% of its users are women, and 85% are under 30 years old.

And what is this important event involving a social network? With the temporary suspension of TikTok services in the United States following the implementation of a law prohibiting its operation under Chinese control, a completely unexpected phenomenon occurred. The so-called “TikTok refugees” headed towards another little-known Chinese app in the West—RedNote—until it became one of the most downloaded apps in the United States.

This took rival platforms by surprise, which had prepared to welcome a large influx of users; instead, they migrated to a “much more Chinese” social network to the extent that it was not fully prepared to operate in English or translate content; moreover, unlike TikTok, RedNote does not function differently in China compared to the rest of the world, nor does it present different content (a recurring complaint from the West). The platform has had to work against the clock to incorporate translation functions.

This phenomenon surprised everyone, both Westerners and Chinese. And this migration posed a significant problem for the U.S. government, since, unlike TikTok, which stores American user data on Oracle servers in the United States, RedNote has its servers in China. The scenario could not have unfolded worse.

This transition from TikTok to RedNote resulted in a strong intersection of two cultures. The encounter has been historic for the world of social media. A significant number of American users have expressed delight, even surprise, at the warm reception the Chinese have given them and their kindness. This is unsurprising, as they were incentivized by the disparaging way figures like Donald Trump refer to China, leading them to view Chinese people as almost something other than human, like strange beings. Unfortunately, almost all have this poor image of the Chinese due to widespread “anti-China” propaganda.

In light of this encounter, both parties exchanged much information about daily life, especially regarding the cost of living. And it is here, precisely, where the interesting part lies: the Americans, after just a few days of interaction with their ideological antithesis, received a cold splash of reality, and shared through videos on various social media what they observed in what, for them, was the “new Chinese social network.”

In general, what stood out the most in those videos made by Americans was their constant expression—generally at the beginning of their videos—of a profound feeling of humiliation they experienced upon seeing the “real China.” So much so that in many cases they claimed to be more advanced and developed than the United States. This came after witnessing the cities of the Mandarin country—in a kind of cyberpunk style.

But that humiliation they felt worsened upon discovering the very low cost of, for example, electric cars, as Americans are used to the high prices and poor quality of Teslas. But the big shock for the “TikTok refugees” was the cost of living, particularly for food, medicine, housing, and rents. It should be noted that, according to the IMF, by 2014, China had already surpassed the U.S. in GDP at PPP (Gross Domestic Product at Purchasing Power Parity), which means that the Chinese economy is larger than that of the United States and the world, in terms of the real purchasing power of its currency.

The issue of food costs was something truly outrageous for Americans. Americans and Chinese grew tired of making videos about their supermarkets to compare prices, and the conclusion was always the same: for the price of a basic and everyday product - like deodorant - in the U.S., one could almost fill a cart in China.

On the other hand, regarding housing - a problem that is growing not only in the United States but in almost the entire world - English speakers popularized among themselves a series of data: First, that in China the percentage of the so-called “homeless” is less than 1% of the population, while Americans express in their videos that they have people living on the street beneath their buildings. Second, 96% of the Chinese own their homes - while in the U.S. it hovers around 65% and they struggle to make ends meet due to bank loan payments, in addition to all the other debts they have that tend to infinity -; and third, according to a study by HSBC published by the BBC, 70% of Chinese millennials are homeowners.

It is worth clarifying that this is due to a housing and land ownership system similar to Singapore, supported by Xi Jinping's famous phrase that says: “houses are for living, not for speculation”.

Continuing with the housing issue, TikTok refugees were alarmed at seeing rental prices in China, which are on average 74% cheaper than in the United States.

The last major aspect that surprised Americans is the cost of medicine. In one of the most viralized videos from TikTok refugees, an American recounted finding that cancer medication cost $22,000 in the United States, while the same medication was $20 in China. It is difficult to find information about this in both countries, but the fact is not surprising, as in China, the prices of drugs and medications are negotiated directly in meetings between the pharmaceutical company and officials of the CCP. This, combined with the fact that in the U.S., many drugs are protected by patents, allows pharmaceutical companies to sell them at high prices without competition. Meanwhile, in China, the government encourages the production of national generic versions of expensive medications.

It is also worth mentioning that, as usual, Americans have been surprised by the difference in education costs between China and the U.S., which generates so many credit problems in North America.

Also, it should not be overlooked that many mothers in the United States have begun to express on TikTok that their children, after just a few days of using RedNote, began to use Chinese expressions, both among their friends and at home. This is significant since this phenomenon has led to a 240% increase in the number of Americans learning Mandarin according to Duolingo.

Throughout history, states that have managed to resist great empires have not only defended their territorial and political borders but have also controlled the flow of information. It makes no sense to defend borders if enemies can buy politicians or if their propaganda can spread freely. Political resistance is, in essence, also an informational resistance.

Since the end of World War II, the main flows of global information have been dominated by the United States, and this information dominance is on par with territorial dominance with its military bases spread around the world, which, even though the North American country is in decline (and continues to do so inevitably in the future), still has power over the rest of the world that cannot be compared with any other country. This hegemonic position allows its version of events to spread through its domains without opposition capable of translating into actions.

In the case of China, recent studies such as the one from King's College London have shown how British media tend to publish negative news about the Chinese government and life in China in general; and this can be applied to the press of most European and American countries. So, what sense does it make for the Chinese to allow that essential anti-China information to circulate within their country? This would never be allowed in the United States; and this is why, at the slightest threat (non-existent, it should be noted), they took action against TikTok for, well-justified (in the logic that has been explained), national security issues.

One of China's great successes was to ban Western social networks, through which - understanding social networks as a non-neutral space - the CCP does not allow its population to be manipulated by information coming from them; creating its own networks. This necessary isolationism led to a situation where, while China experienced great economic development thanks to its successes in state policies and its socialist-oriented market planning; on the other side, Westerners were absorbing ideology and propaganda against the Mandarin country for years. This is what generated that widespread feeling of humiliation so often expressed.

Now, Westerners (especially North Americans) observe how Chinese influencers have a much better life than theirs, thanks to their videos showing what a normal day in China is like and what China is like in general, with backgrounds of scenery, buildings, and infrastructure that, reasonably, Westerners believed were made with AI; and this generated a mix of denial and a feeling of “how could I have been wrong all this time?” and a reconsideration of their opinions and assumptions regarding China as an almost anthropological effect.

Final Reflections

What could have caused the migration from a Chinese social network to an even more Chinese one? Possibly, it is due to a widespread weariness among Westerners with the atmosphere of X, Instagram, or Facebook, while in RedNote, there usually isn’t that aggressiveness, toxicity, and other characteristics of Western networks. Additionally, like all Chinese social networks, Xiaohongshu has strict rules regarding content, including a prohibition on superstitious or misleading content, authenticity (meaning that posts are not inflated by bots), and moderated political or social discourse.

On the side of the Chinese, they have experienced a slight disappointment because they thought that life in the United States was much better than in their country, while North Americans have discovered that China is not an underdeveloped country, and that the Chinese are not as far from their living standards as they thought - this is the result of anti-China propaganda.

Now there are many more Americans and Westerners in general aware that the media and social networks have been lying to them about China. Although to be fair, at various times what Chinese users on RedNote have shown to refugees is a reality, which is the best of the best, and perhaps not the most representative of the entire country; but it remains much more faithful than what is typically shown in American and European mass media.

Highly viral meme summarizing the phenomenon from both sides.

It is concerning that this separation exists between the Chinese reality and the propaganda fantasy disseminated by the United States. But what is really concerning is the degree of that separation, where people believe that there is no freedom of expression in China, that they live in overcrowded conditions, that there is only slave labor, that they wear masks due to smog, or that there is a social credit system akin to Black Mirror (it is incredible to have to clarify that this does not exist and is an invention of North American propaganda). These people repeat the xenophobic McCarthyist propaganda (because it is a remnant of McCarthyism) and think that the media they consume provide different opinions, and the reality is that those media outlets are: CNN, BBC, Fox, The Economist; basically the same thing but with different names and logos. Their entire political spectrum is not really a “spectrum,” but merely political and economic liberalism. People spend their whole lives inadvertently conditioned to a single stance, in which capitalism is presented as something inevitable, natural, and unchangeable, such that it is easier to imagine the end of the world than the end of capitalism, bringing Zizek and Fisher into the conversation.

And when talking about anti-China propaganda, it is not a fabrication of the “leftist impoverishing left,” but in 2021, the U.S. Senate approved a “Fund to Combat Chinese Influence.” As stated on the official Senate page: “it authorizes the allocation of $300,000,000 for each fiscal year from 2022 to 2026 for the Fight Against Chinese Influence to counter the malign influence of the Chinese Communist Party globally.”

For years, theorists, academics, and specialists have argued that China could not achieve virtuous economic development, advancements in innovation, progress, and creativity due to its lack of freedom and censorship, but this unsustainable discourse does not align with reality. DeepSeek is just one example that this ideological supposition is false, because it is not just that; only this year, China successfully completed the placement of satellites in low orbit - competing with Starlink, broke its own record for stable plasma operation with its “artificial sun,” and even launched an electric super-coupe capable of jumping. Moreover, it is a pioneer in telecommunications, renewable energies, robotics, industry, etc., etc. So, either the liberal theory is incorrect, or China is a free country without censorship; or a bit of both.

Many Americans have come to understand that their enemy is not the Chinese but their own politicians and financial and technological elite managing their country.

Both facts - the one generated by DeepSeek and that by RedNote - should serve as an alarm for the citizenry of the West. The current model (political, economic, social, and philosophical) is not yielding results, not just to meet the people's demands but also for covering the most basic needs, like having a place to live.

New ways of addressing problems are emerging, and these are not in North America or Europe; this century will not be ruled by them.