Bloomberg Intelligence says China's AI models narrow gap with US to record low after DeepSeek release

On October 5, 2026, Bloomberg Intelligence reported that the performance gap between US and Chinese AI models has narrowed to a record low of 3% on benchmark scores, down from 9% in May and 15% earlier in the year. This follows the September release of DeepSeek's V4.1 Flash, which ranked sixth globally on LiveBench. The improvement is due to China's AI expertise and hardware optimization. The report questions US export restrictions on Nvidia chips and notes that only three of the top 15 models are Chinese. Chinese AI firms face profitability challenges until 2030 due to price wars and market saturation.