Last Sunday at 2:16 pm in California, US billionaire technical investor Mark and Leisen made a significant call. He declared, “Deepseek R1 is the AI equivalent of SPUTNIK,” on X.
In 2023, emerging companies in China, led by a group of mathematicians with centuries of expertise, unveiled new chatbots that rival the performance of major American models in just a few minutes.
Despite the CCP’s efforts to suppress all responses, from Taiwan’s status to the Tiananmen Square massacre in 1989, technology veteran Andreessen compared the Soviet Union’s shocking launch of the first satellite in 1957 to the current situation in the US.
The repercussions were felt the following day as shares of the world’s largest companies plummeted, marking the steepest decline in the US market’s history for microchip manufacturers, with losses nearing $600 million. Investors interpreted DeepSeek’s success as a sign that Chinese reliance on American chips was diminishing, potentially threatening or ending US hegemony in AI. Just a week prior, a Silicon Valley giant had announced a $500 million AI investment plan, spending more than necessary. Chinese AI Lab stated that the training cost for the basic model was only $5.6 million.
Since the release of Chatgpt in November 2022, the DeepSeek app had become the most downloaded application in the US and UK Apple app stores during the biggest AI week. Ta.
Speculation arose about the world’s largest dictatorship attempting to surpass the West in AI. This raised concerns about who would control technology that could potentially be exploited for cyber attacks, biological weapons, and thought control. With AI at the forefront of geopolitical competition, the ban on microchip exports hampering China’s progress could be a strategy to maintain hegemony.
Midweek saw significant developments from the DeepSeek research institute in Hangzhou, Shanghai’s suburbs. Experts were quietly impressed by the advancements led by Liang Wenfeng, Deepseek’s 40-year-old hedge fund boss. However, widespread recognition only came after the release of the Deepseek R1 model, boasting superior capabilities than Open AI’s 01 model in some aspects.
The unveiling of DeepSeek’s capabilities stood out from usual marketing hype from Google, Meta, and Openai with its focus on enhancing LLMS through reinforcement learning.
The model offered free usage and was a pioneering method designed for greater efficiency compared to Openai’s $20 inference model Chatgpt-O1. This approach reduced computational requirements by activating specific system components to respond to queries. It provided millions of performance capabilities at a fraction of the cost incurred by other companies.
In response, Openai announced the launch of a new inference model O3-mini on Friday, accessible to all users, including the layers of Chatgpt.
Lian’s team’s creation not only impacted the market but also potentially altered the landscape of AI dominance, economically, politically, and militarily, sparking speculation about the US and China’s future geopolitical rivalry. Reports suggested that Lian was on a Lunar New Year holiday while initiating geopolitical shifts. Experts worldwide sought to understand China’s quest for innovation and strategies to overcome chip shortages.
Jimmy Goodrich, a technology advisor at Rand Corporation, commented to Reuters, “It was well-known that DeepSeek had an exceptional team.”
Michael Urdridge, an AI professor at Oxford University, admitted, “They appear to have developed a GPT-like model that mirrors its capabilities.”
This development was likened to “pulling the rug out from under NVIDIA,” suggesting that more developers could now create AI models, expanding accessibility to the technology.
Mike Gualtieri, a principal analyst at Forrester Research, predicted an increase in startups creating unique AI models with elevated accessibility. However, major US tech companies possessed substantial data processing capabilities that could expedite their developments.
He elaborated, “Companies with abundant chip resources or access to them—such as OpenAI and Google—applying these [DeepSeek] techniques could iterate quickly.”
In London, conflicting sentiments of hope and fear emerged. Technology Secretary Peter Kyle expressed reluctance to download the Chinese app due to data storage concerns in China, where all companies are obligated to align with national information regulations, potentially linked to intelligence operations.
Nevertheless, he also expressed excitement at utilizing AI for economic growth, suggesting a shift in priorities from sheer computing power to breakthrough AI advancements, signaling positive prospects for the British tech industry.
By mid-week, DeepSeek vanished from the Italian Google and Apple app stores following demands from data protection authorities for enhanced security measures in handling personal data. Dublin’s Data Protection Committee sought clarification from DeepSeek regarding “data processing activities related to Irish data.”
In the US, a Presidential order signed by Donald Trump aimed to reinforce the nation’s leadership in AI. DeepSeek’s arrival was deemed a pivotal moment, prompting Trump to emphasize the need for a competitive stance to secure victory in the AI race. This drew comparisons to a “Morning Call in our industry” or “Return to Code Mine,” as one X user interpreted.
Soon after, doubts emerged. White House AI Advisor David Sacks expressed skepticism:
Openai founder Sam Altman initially welcomed new competition but later raised concerns about Deepseek potentially misrepresenting the model.
Deepseek also faced real-time challenges regarding politically sensitive or controversial topics with CCP. Users across various regions raised questions highlighting the suppression of freedom of speech in China, including discussions on protests in Hong Kong, censorship of Xinjiang re-education camps, and China’s Social Credit System.
In scenarios where China actively suppressed dissent, the chatbot’s responses were altered, raising concerns about DeepSeek’s compliance with Chinese censorship and the impact on free speech. The veiled responses without deliberate intent shed light on the complexities of AI interactions and their repercussions.
The bizarre world of AI grew even more peculiar as uncertainties continued to mount, setting the stage for another eventful week.
