Tesla Switches to DeepSeek AI in China as Tech Rivalries Heat Up

Tesla is taking a different path in China, opting to power its electric vehicles with DeepSeek’s AI rather than xAI’s Grok model.

Vehicle Identification Number (VIN) filings in the country now list DeepSeek as the onboard AI, a departure from Tesla’s global reliance on Grok for intelligent features.

The shift reflects Beijing’s tightening stance against heavy dependence on American technology. Chinese regulators have been discouraging domestic companies from relying on U.S. chips and software, even warning against NVIDIA’s H20 GPUs over security concerns. In this climate, Tesla’s alignment with a local AI model appears to be a pragmatic decision to navigate political sensitivities and ensure smoother operations in the market.

Still, DeepSeek faces its own hurdles. The company recently postponed the rollout of its R2 model due to limited computing power from Huawei’s less competitive AI chips, underscoring the challenges of scaling homegrown AI systems to match global leaders. Whether DeepSeek can provide the same reliability and depth as Grok remains an open question.

Meanwhile, Elon Musk confirmed that Tesla’s Full Self-Driving version 14 will debut in September. Around the same time, xAI will begin training the next generation of Grok, which Musk boldly described as having a chance to be “true AGI.” On the regulatory front, Tesla is also contending with a new U.S. probe into delays in reporting crash data, adding to the list of headwinds the company faces worldwide.

Between technological rivalry, regulatory pressures, and market politics, Tesla’s pivot in China highlights just how intertwined innovation and geopolitics have become for global automakers.