DeepSeek-led AI to raise China’s economic growth but threaten jobs: Goldman Sachs

Goldman Sachs said artificial intelligence (AI) will give a mild lift to China’s economy in the years ahead following the roll-out of home-grown generative AI tools by DeepSeek, but that the technology would have a limited effect on industry while threatening an already turbulent job market.

The New York-based global investment bank said in a research note on Sunday that AI would “start raising potential growth” in China by next year, and by 2030 will have spurred expansion of the world’s second-largest economy on the order of 0.2 to 0.3 percentage points – higher than previous estimates.

“The recent emergence of DeepSeek as a credible global competitor to US-based AI leaders suggests faster AI development and adoption in China than we previously anticipated,” the research note said.

“Recent developments have demonstrated Chinese companies’ ability to continuously improve performance while reducing … computing power requirements, paving the way for speedier AI adoption in China.”

Hangzhou-based start-up DeepSeek has released two advanced, open-source AI models at a fraction of the cost and computing power that major tech companies typically require for similar projects.

China’s AI adoption is expected to stimulate economic growth through task automation that saves labour costs and raises productivity, Goldman Sachs said.