The fact that DeepSeek’s low-cost, high-performing chatbot is challenging US AI models that cost billions of dollars to build offers hope to resource-strapped European tech firms, industry experts told Semafor — meaning that Europe can still hope to be a key player in AI innovation.

“We’re so fixated on the geopolitical story,” Andreas Cleve, CEO and co-founder of Denmark-based AI healthcare company Corti, referring to US-China tech rivalry.

Europe’s role in developing specialized AI often gets overlooked, he added, stressing that European AI firms “should be excited about the fact that [DeepSeek’s success] shows we’re not in the final inning at all.”

European startups “have historically excelled at building focused, efficient solutions rather than chasing scale at all costs,” said Muj Choudhery, co-founder of UK company RocketPhone.ai. DeepSeek “suggests there’s room for strategic players who can execute well without massive capital outlays.”

The UK — the third-largest AI market globally after the US and China, according to the US International Trade Administration — earlier this month published an AI Opportunities Action Plan that emphasized the need for more computing power to stay competitive, including plans to commission a new supercomputer.

But DeepSeek demonstrates “that AI leadership isn’t just about computational scale — efficiency and innovation are powerful advantages,” Zoi Roupakia, Policy and AI Research Lead for the Institute for Manufacturing at the University of Cambridge, told Semafor.

In countries like the UK, which has a vibrant research and startup scene but lacks the deep pockets of US tech giants, there is a need to balance infrastructure investment with innovation to succeed, she said.