With the Trump administration having now been in office for around one month, the spillover effects on Taiwanese domestic politics are being felt in a number of ways.
One illustration is the “DeepSeek shock.” In particular, the debut of Chinese AI start-up DeepSeek has prompted a round of rethinking in the AI industry, seeing as DeepSeek does not rely on expensive hardware infrastructure but achieves similar results to western AI models.
As the trend in AI development was toward the expansion of expensive and costly infrastructure, DeepSeek’s apparent strong performance led to panic in western markets. Companies that have banked on AI infrastructure, such as Nvidia, were immediately affected, losing 17% of stock prices. With the US having made maintaining advantages in the field of AI over China into a national security concern, the reaction from the US has sometimes been compared to a “Sputnik moment.”
The world is currently reliant on Taiwan for semiconductors, with Taiwan producing 60% of global supply, and 90% of advanced chips. As AI development will continue to rely on such chips, Taiwan could have potentially benefited from the infrastructure-heavy model of AI development. Along such lines, Nvidia had signaled that cultivating ties with Taiwan was a large priority for it, with Taiwanese American founder Jensen Huang visiting Taiwan on numerous occasions to great fanfare, and suggesting that Nvidia would build an overseas headquarters in Taiwan.
Still, enthusiasm over DeepSeek died down to some extent after it became clear that DeepSeek was heavily censored when it came to topics that the Chinese government finds politically sensitive, such as discussion of Tiananmen Square, Taiwan, or Xinjiang. Questions about whether DeepSeek circumvented import controls to obtain Nvidia chips and whether its performance is truly as strong as claimed have also been raised.
Jensen Huang. Photo credit: Raysonho @ Open Grid Scheduler / Scalable Grid Engine/WikiCommons/CC0
As a result of the international discussion of DeepSeek, however, this has also become a political issue in Taiwan. While the Lai administration has banned the use of DeepSeek in government agencies, the pan-Blue camp has taken a line critical of the Lai administration, calling on the Lai administration to clarify the scope of this ban.
Such moves are not surprising from the pan-Blue camp, which has generally criticized efforts by the DPP government to regulate Chinese media or software, including TikTok, or Chinese streaming platforms such as iQiyi. The pan-Blue camp has framed such moves as infringing on freedoms of expression, though this is in line with the pro-China leanings of the pan-Blue camp.
Still, the advent of DeepSeek would probably be welcomed by the pan-Blue camp, in the sense that the KMT has historically leveraged on the claim that China will eventually overtake Taiwan’s traditional backer, the US, and so Taiwan should seek to strengthen political and economic ties with China. As such, it would not be surprising to see the pan-Blue camp leaning into claims touting the superiority of DeepSeek in the near future.
Likewise, with the Trump administration freezing USAID for 90 days affecting civil society organizations working on China or Southeast Asia, this has led to some criticisms from pan-Blue commentators against Taiwanese organizations with allegations that Taiwanese civil society organizations are US-backed or may do little but receive large amounts of funding.
Such allegations have been made against the Taiwan Fact-Check Center, as well as the Taiwan Rebels, the legal body of longstanding activist space Touat Books. Ironically, however, such organizations do not actually receive USAID funding, and such allegations have sometimes mixed up George Soros’ Open Society Foundation (OSF) with USAID – including odd claims that OSF is a vehicle for money laundering for USAID.
Still, it will not be surprising if political discourse in the US about USAID ends up impacting Taiwan. The pan-Blue camp has not sought to scrutinize funding sources for Taiwanese civil society in any systematic manner in past years, but it may use the present political upheaval in the US as an opportunity in order to do so. This upheaval also takes place at a time in which Taiwanese groups were beginning to accept foreign funding, even if this meant moving away from the local membership models that they previously were based on, but the shifts in the US may reverse this trend.
Brian Hioe is a freelance journalist, translator, and one of the founding editors of New Bloom.
This article originally appeared in New Bloom, an online magazine featuring radical perspectives on Taiwan and the Asia-Pacific.