DeepSeek poses key questions for China and US, says OpenAI GC

CORONADO ISLAND -- The emergence of China's DeepSeek AI platform as a competitive threat could push the U.S. toward more permissive artificial intelligence regulation, OpenAI's general counsel predicted Tuesday.

Che Chang was speaking to securities law practitioners in San Diego on Tuesday, a day after reports that DeepSeek had managed to achieve comparable levels of performance to U.S. companies' AI models for far less investment. The ensuing market panic resulted in $1 trillion being wiped off U.S. stocks, with chipmaker Nvidia hit particularly hard.

Chang acknowledged that DeepSeek was impressive, but said the goalposts for AI models were constantly shifting and predicted U.S. products would likely soon outpace it.

"They've done some really great optimizations around training and costs using slightly less advanced chips. And that's the reason Nvidia took a big hit, because they are the leading edge of GPUs, which are the chips that most people use for AI development and offering and commercialization," Chang said.

However, AI "generations move very fast," he added. "Everyone else in the field will be furiously catching up or trying to extend the frontier."

He said that OpenAI had moved up the timeframe for future releases, and predicted that it, and other AI companies, would be introducing updated models in the weeks and months ahead. He also cautioned that key questions remained over the Chinese government's role in the development of AI, including over issues of censorship and content moderation, as well as its attitude to venture capital.

Referencing the potential for DeepSeek to be caught up in copyright infringement lawsuits like those filed against OpenAI and other U.S. AI companies, Chang said, "good luck suing that, right?"

DeepSeek also posed key questions for the U.S. government regarding its policy of export controls on computer chips and its infrastructure policy, he said.

Despite the uncertainty, Chang was "pretty optimistic" about the direction of AI policy in the U.S. He said that the "the federal position is going to be very positive and pro innovation and pro progress" under the Trump administration, citing Trump's repeal of Biden-era AI guardrails and the institution of a short, pro-growth executive order on AI.

While states like California and New York may institute "stricter, more stringent AI regulation," the U.S. will overall maintain a "very positive, aggressive posture" toward AI, Chang predicted. He added that realizations around "national patriotism, or national security" related to DeepSeek would likely alert lawmakers and regulators to the risks of taking a restrictive approach to AI governance.

"Other countries are not going to consider waiting for us," he said.

He contrasted the U.S. approach to that taken in the European Union, citing the EU Artificial Intelligence Act. He said EU representatives had acknowledged they were "struggling" to balance the economic opportunities offered by AI with a rights-based approach to governing it.

He said that other jurisdictions, including the United Kingdom and Japan, were shifting to a more "U.S. like posture" that focused on the benefits AI could bring, including to the education and healthcare sectors.

"I've talked to different governments over the last few years on AI, and by far, the number one request every single kind of government that we talk to says, 'I want, how do I use this to fix my healthcare system?' And the number two request is, how do I use it to fix my education system?'"

He predicted that attorneys had little to fear from the widespread adoption of AI. While AI tools had replaced the need for database searches, for example, it did not replace what lawyers are then able to do with that information.

"No one here in this room is going to be that affected. We will all hopefully improve our lives and our, you know, efficiencies, using it," he said.

Chang spoke at the three-day Securities Regulation Institute hosted by Northwestern Pritzker School of Law. The Daily Journal is a sponsor of the event.