China’s local governments are rapidly adopting the DeepSeek AI model, transforming operations with faster document processing and audits. In Shenzhen’s Futian district, 70 AI units slash task times, but public reactions range from praise for efficiency to fears of job cuts among the nation’s 8 million civil servants.

With rising interest in AI models like Deekseek, we explore whether a US$5.6M budget can develop a ChatGPT-scale AI. From compute costs to alternative approaches, discover the reality of AI development in this in-depth analysis.

DeepSeek’s latest AI model, R1, utilizes knowledge distillation to rival ChatGPT while reducing computational costs. However, OpenAI has raised concerns about potential IP misuse. This report explores the advancements, applications, and ethical implications of knowledge distillation in AI development.