Chinese AI startup DeepSeek captured 89% of its home market and significant shares across developing nations, according to Microsoft's report released Thursday, January 8, 2026. The free, open-source platform now dominates AI usage in Belarus (56%), Cuba (49%), and Russia (43%) while expanding across Africa.
Global generative AI adoption reached 16.3% of the world's population from October through December, Microsoft's AI for Good Lab found. That marked a 1.2 percentage point increase from the previous quarter's 15.1% adoption rate.
The digital divide widened despite overall growth. AI adoption across developed economies advanced nearly twice as fast as in developing nations, according to Microsoft's analysis of anonymized device telemetry. "We are seeing a divide and we are concerned that that divide will continue to widen," said Juan Lavista Ferres, chief data scientist for Microsoft's AI for Good Lab.
DeepSeek's combination of zero-cost access and open-source availability lowered barriers for millions of users in price-sensitive regions. The platform comes pre-installed on widely available Chinese smartphones from manufacturers like Huawei, accelerating its spread in markets underserved by Western AI services.
Microsoft's report identified DeepSeek as a geopolitical instrument extending Chinese influence where U.S. platforms face restrictions. The startup, founded in 2023, gained traction in Russia, Iran, Cuba, and Belarus - nations where American tech services encounter limited access or outright bans.
DeepSeek's R1 reasoning model, released in January 2025, surprised the global tech industry with its cost-effectiveness compared to OpenAI's offerings. Nature journal published peer-reviewed research from DeepSeek founder Liang Wenfeng in September, describing the work as a "landmark paper" from the Chinese startup.
The platform performs well on technical tasks like mathematics and coding but operates differently from U.S.-based models on political topics. "They follow the same type of access to the internet that China has," Lavista Ferres noted. "Questions will be answered very differently, particularly political questions."
Developed nations including Australia, Germany, and the United States have moved to limit DeepSeek usage over security concerns. Microsoft banned its own employees from using the platform last year. Adoption remains minimal in North America and Europe but surged in regions with restricted Western tech access.
African nations showed moderate DeepSeek penetration with market shares between 11% and 14% in Ethiopia, Zimbabwe, Uganda, and Niger. Syria and Iran registered 23% and 25% adoption respectively, according to Microsoft's estimates.
Early digital infrastructure investors led global AI adoption rates. The United Arab Emirates, Singapore, France, and Spain showed the highest user shares. Microsoft's findings aligned with October Pew Research Center data showing South Korea's particularly enthusiastic AI embrace.
The report highlights how accessibility and affordability shape global AI adoption as much as model quality. DeepSeek's rise demonstrates how open-source alternatives can bridge technology gaps while creating new geopolitical dynamics in the AI landscape.
