ISLAMABAD, Oct 29 (ABC): China’s rapid advances in artificial intelligence (AI) are creating new opportunities for global digital growth. Increasingly powerful and affordable AI models could help businesses improve productivity, reduce operating costs and strengthen their competitiveness, particularly in developing economies.
The growing availability of advanced Chinese AI models is making sophisticated technologies more accessible to smaller businesses and emerging markets. As a result, companies could reduce their dependence on expensive proprietary systems and adopt AI across a wider range of industries.
According to Bloomberg Intelligence, the performance gap between leading Chinese and US AI models narrowed to around 3% following DeepSeek’s September release of V4.1 Flash.
The gap stood at 9% in May and 15% earlier in the year, highlighting China’s progress in developing competitive AI technologies.
These advances also reflect China’s ability to optimise AI models for domestic hardware, potentially reducing the impact of US technology export restrictions.
However, translating technological progress into economic benefits will depend on computing infrastructure, skilled workers, business adoption and the commercial application of AI innovations.
Dr Faiz Ahmed, an adjunct faculty member at Quaid-i-Azam University, Islamabad, and an expert in AI governance, institutional architecture and operational productivity optimisation, told Wealth Pakistan that China’s AI progress had implications beyond improvements in model performance.
“The headline is not the benchmark gap; it is the collapsing price of intelligence,” he said.
Ahmed explained that Chinese models such as DeepSeek, Qwen, Kimi and GLM were making advanced AI capabilities available through open-weight models or at significantly lower prices than leading proprietary systems.
According to him, declining AI costs could transform the global digital economy by making advanced technologies accessible to more businesses.
This could also reduce dependence on a limited number of major AI developers and encourage wider participation in technological innovation.
Affordable Chinese AI models create opportunities for smaller businesses
Ahmed said competition in the AI industry would increasingly depend on how effectively businesses used technology rather than simply which companies developed the most powerful models.
Smaller companies could particularly benefit from affordable AI tools by running or fine-tuning models using their own data.
This could reduce their dependence on expensive commercial AI services and help them develop applications suited to specific business requirements.
Consequently, competitive advantages could increasingly depend on specialised expertise, proprietary data and access to markets.
Such developments could allow smaller businesses to compete in areas previously dominated by larger technology companies.
For developing economies, affordable AI could create opportunities to strengthen industrial productivity, expand digital services and improve export competitiveness.
However, Ahmed cautioned that access to low-cost AI models alone would not guarantee sustainable economic gains.
Countries would also need to strengthen the infrastructure, workforce skills and regulatory systems required for effective AI adoption.
He identified three priorities for developing economies: affordable computing infrastructure and reliable electricity, practical AI training, and robust data protection and verification standards.
Training programmes should target researchers, professionals and small and medium-sized enterprises to support wider commercial adoption.
Meanwhile, stronger data protection and verification standards would help build confidence in AI applications.
“Countries that treat cheap models as a substitute for this groundwork will consume AI. Countries that build it will export with it,” he said.
Ahmed stressed that Pakistan and other developing economies needed to develop domestic capabilities to translate lower AI costs into productivity gains, technological innovation and export growth.
AI integration strengthens manufacturing competitiveness
Tech analyst Asad Baig said China’s growing strength in artificial intelligence was also linked to its integration with industrial manufacturing.
He highlighted the relationship between AI development and manufacturing, where factories produce robots and robots generate operational data.
Businesses can then use this data to improve AI systems, which in turn enhance industrial efficiency and production processes.
According to Baig, this integration could strengthen China’s industrial competitiveness while demonstrating how AI technologies could support manufacturing and economic growth in other countries.
He explained that technological advances would generate meaningful economic benefits only when businesses translated them into practical improvements.
These include greater production efficiency, lower operating costs and better management of industrial processes.
For developing economies, adopting AI could help streamline manufacturing operations and strengthen the ability of domestic companies to compete internationally.
However, Baig cautioned that countries lacking technical expertise and institutional capacity could become increasingly dependent on foreign AI technologies.
He said Pakistan and other developing economies should therefore prioritise practical AI applications rather than attempting to match the large-scale investments of global technology leaders.
Pakistan can benefit from practical AI adoption
China’s progress in developing competitive and affordable AI models could encourage broader participation in the global digital economy.
Smaller businesses could gain access to technologies previously available mainly to large corporations, creating opportunities for innovation and productivity improvements.
For Pakistan, the developments highlight the importance of investing in computing infrastructure, workforce training and industry-specific AI applications.
Affordable AI tools could help Pakistani businesses improve manufacturing efficiency, reduce production costs and strengthen their export competitiveness.
However, these benefits would depend on the ability of local companies to adapt AI systems to their operational requirements.
Stronger cooperation between technology developers, research institutions and industries could also support the commercial adoption of AI.
Baig emphasised that developing economies should focus on using affordable AI technologies to address practical economic challenges.
Such applications could improve industrial productivity, strengthen business competitiveness and create new export opportunities.
China’s continuing progress in AI development could therefore support wider access to advanced technologies and encourage innovation across emerging economies.
Ultimately, the long-term impact of these breakthroughs will depend on how effectively businesses and developing countries use affordable AI to achieve measurable productivity gains and sustainable economic growth.
