DeepSeek stunned the world early this year when it released benchmark AI models created at a fraction of the cost of Western counterparts.

China could see more than 100 DeepSeek-like breakthroughs in the next 18 months, Zhu Min, a former deputy governor of the People's Bank of China, said during the World Economic Forum in Tianjin on Tuesday.

Zhu was basing his projection on China's vast pool of engineers, massive consumer base, and supportive government policies, according to a Bloomberg News report. The urge to innovate also stems from the fact that the U.S. has cut the country off from high-end technology, which could aid AI development.

DeepSeek stunned the world early this year when it released benchmark AI models created at a fraction of the cost of Western counterparts, sending shares of Wall Street darling Nvidia and other Big Tech firms tumbling before they clawed back losses.

Combined with Alibaba's (BABA) swift AI rollouts, the development underscored China's technological progress and helped fuel a rally in tech sector valuations this year.

Zhu said the next new software products from China "will fundamentally change the nature and the tech nature of the whole Chinese economy."

Bloomberg Economics estimates the contribution of high-tech to China's gross domestic product climbed to about 15% in 2024 — from nearly 14% a year earlier — and could exceed 18% in 2026.

China is currently engaged in a trade war with the U.S., the latest skirmish in a series of disputes that have been ongoing for years, as the latter has attempted to curb the growth of the Chinese tech industry.

In addition to efforts to prevent China from securing advanced semiconductor manufacturing equipment, Washington is now blocking Chinese companies from acquiring Nvidia's (NVDA) high-end AI chips. Beijing is now pinning its hopes on domestic tech giants, such as Huawei Technologies, for advanced chipmaking.

China's tech advancements would likely have implications for U.S. tech heavyweights like Amazon (AMZN), Alphabet (GOOGL), and Nvidia. In April, Nvidia CEO Jensen Huang said China was not behind in AI capabilities and praised Huawei as "one of the most formidable technology companies in the world."

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