Lee Kai-fu Pivots 01.AI to Focus on DeepSeek and Open Source Solutions

Lee Kai-fu, founder and CEO of Chinese AI start-up 01.AI and former head of Google China, has repositioned his company to leverage DeepSeek's open-source models rather than continuing to develop proprietary alternatives, according to an exclusive interview with the South China Morning Post.

Lee described DeepSeek's launch of its latest open-source models as China's own "ChatGPT moment," igniting widespread AI adoption across the country while raising fundamental questions about the viability of developing pre-trained in-house models.

"It becomes imperative for us to embrace [DeepSeek] as our primary bet," Lee told SCMP on Friday, noting that the strategic shift "became as clear as the writing on the wall" following an enormous surge in demand for DeepSeek's models from Chinese CEOs after late January.

Instead of competing directly with DeepSeek's foundational models, 01.AI is now focusing on selling AI solutions to corporate clients, particularly in the finance, video gaming, and legal sectors, all built upon DeepSeek's popular open-source technology.

This pivot represents a significant strategic realignment for 01.AI, which had previously been positioning itself as a developer of its own large language models. Lee's decision acknowledges the transformative impact DeepSeek has had on China's AI landscape and signals a broader industry trend toward building specialized solutions on top of established open-source foundations rather than competing at the base model level.

This story was first reported in an exclusive interview with the South China Morning Post