Government policies, generous funding and a pipeline of AI graduates have helped Chinese firms create advanced LLMs.

The Chinese artificial intelligence firm DeepSeek has rattled markets with claims its latest AI model performs on a par with those of OpenAI, despite using less advanced, more energy efficient computer chips.

Two days after the release of DeepSeek-R1, TikTok owner ByteDance released an update to its flagship AI model, which it claimed outperformed Microsoft-backed OpenAI's o1 in AIME, a benchmark test that measures how well AI models understand and respond to complex instructions.