Nine Deposit Money Banks (DMBs) that were set to be disconnected today from the Unstructured Supplementary Service Data (USSD) service have avoided this fate following a last-minute settlement of their accumulated debts.

The outstanding debts, which had reached N160 billion as of November last year, were cleared just before the deadline, preventing a major disruption in banking services for millions of Nigerians.

The USSD debt saga began in 2019 when telecom operators developed various USSD codes for financial transactions. Under an agreement with the Nigerian Communications Commission (NCC), banks were required to remit a fee of N6.98 for each successful transaction made via USSD codes. However, many banks failed to remit these payments, leading to the accumulation of significant debts. By October 2024, the total debt owed by banks had soared to over N200 billion, but by November, the outstanding balance had been reduced to N160 billion after several banks made partial payments.

This reduction, however, still left nine banks with outstanding debts, prompting the NCC to grant approval to telecom operators to disconnect these institutions from USSD services. The disconnection was slated to take effect on January 27, 2025. However, in a surprising turn of events, the nine remaining banks cleared their debts just before the close of business last Friday, averting the planned disconnection.

Billing Time Controversy

Despite clearing their debts, these banks withheld part of the amount due, citing the issue of the 10-second billing time approved by the NCC and the Central Bank of Nigeria (CBN). The 10-second billing time stipulates that banks should begin billing customers only after the first 10 seconds of a USSD transaction. This provision, introduced as a shift from the previous 5-second rule, has become a point of contention between telecom operators and banks.

The 10-second billing time rule has been a bone of contention for several reasons. Telecom operators argue that it results in a loss of potential revenue for them, as they are only compensated after the 10-second mark of a transaction. On the other hand, banks have expressed concerns that the time frame may not accurately reflect the duration of a customer’s interaction with the USSD code, leading them to withhold part of their debt payment.

The relationship between Nigerian banks and telecom operators has been fraught with tension over the years, particularly when it comes to the USSD service. The service, which allows customers to perform banking transactions via their mobile phones without internet connectivity, has seen a rapid increase in usage, especially in rural and underserved areas.

Despite its growth, the service has also exposed the financial friction between the two sectors. Telecom operators argue that the debt owed by banks has stifled their growth and created a bottleneck in the sector, while banks, on the other hand, have maintained that the costs associated with USSD services are too high, further straining their financial resources.

The controversy has further been compounded by the role of the NCC and the CBN, both of which have intervened at various points to mediate the dispute. As it stands, the 10-second rule remains a key sticking point, with both parties set to revisit the issue soon to avoid further delays or disruptions in the service.

The Need for Permanent Resolution

While the nine banks have settled their debts for now, the issue is far from resolved. The USSD billing time continues to be a significant factor in the ongoing disagreement, and it seems likely that further discussions will be necessary to establish a more sustainable framework for USSD transactions.

Observers have noted that the resolution of the USSD debt crisis will require more than just financial settlements. It will necessitate a comprehensive review of the service’s pricing structure, a clearer understanding of the role of telecom operators, and a more transparent mechanism for debt resolution.

For now, the immediate crisis has been averted, and Nigerians can continue to access USSD banking services without interruption. The focus is expected to shift to the next steps in addressing the long-standing tensions between the banking and telecom sectors, with the hope that a sustainable resolution will eventually be found.

Comment: “OpenAI’s model can be harnessed and utilized in ways that outperform DeepSeek in every way. Consider something as simple as a hammer ?, a tool that can build far beyond its own scale and size. These LLM’s will never go away but instead are generating guard rails and ecosystems for us to build within and or on top of.

“So what remains? Who am I most comfortable sharing my data with? Who is GDPR compliant, Fedramp compliant, allows your models to be your own, belongs to a country that has strong ethical compliance, rights for its citizens and a great quality of life? “

My Response: DeepSeek does not need to be as great as OpenAI to be successful. It simply needs its products to be above performance average as it has a massive cost competitiveness. In the Android smartphone market, China won, and controls most parts of the world, because it delivers products people can afford. So, this is not really about frontal competition, this is about breaking the economic veil that one must be so loaded with money to do AI. 

That myth that one must raise $billions for core AI work has been broken. And with that, Nvidia will not recover easily because its “new GPU” thesis has been invalidated. DeepSeek may not be valued at up to $50 billion but it has knocked out more than $300 billion in global AI market caps.

On data sharing, no one eats data, and we overestimate metadata-level digital privacy in an era people share their lives on social media. That is the reason people are buying Chinese phones, Chinese EVs, etc even as the US and Europe block them, denying their citizens the best EVs in the world right now. The Chinese EVs are well ahead of what we have in the US today.

On GDPR, Fedramp compliant, rights, etc, those are European and Western inventions that most people do not really care about except when in their domains. Unless the US puts an executive order to ban DeepSeek, I expect Silicon Valley startups to join the DeepSeek open model framework to find a positioning since they do not have $billions for Nvidia anymore. When that happens, everyone will understand that people do not really care about those GDPRs. With GDPR, you pay $200m for what someone is giving you $6m with/out GDPR, your choice?

On quality of life, the irony is that the DeepSeek advancement is how to keep improving the quality of life for ALL Nations, not just a few. This is how Microsoft’s boss sees it: “To see the DeepSeek new model, it’s super impressive in terms of both how they have really effectively done an open-source model that does this inference-time compute, and is super-compute efficient. We should take the developments out of China very, very seriously”.

Remember: “Microsoft asked hundreds of China-based AI staff to relocate out of China by July 2024”. And that China has done this. The US must learn of the need for the rise of ALL, not just one region. China is likely going to win the AI development future in the Global South now.

That said, there is no need for panic because if China makes AI development easier and accessible, the global market will grow and everyone will benefit, assuming some presidents think that is a better outcome for the world.

In a stunning turn of events, a relatively unknown Chinese AI lab, DeepSeek, has thrown Silicon Valley into turmoil with the release of advanced AI models that outpace some of America’s best—at a fraction of the cost.

The timing couldn’t have been more dramatic: DeepSeek unveiled its models just hours after U.S. President Donald Trump announced Stargate, a $500 billion AI investment initiative aimed at cementing America’s leadership in artificial intelligence.

The stark contrast between Stargate’s monumental budget and DeepSeek’s cost-efficient triumph has left industry experts questioning whether the U.S. approach to AI dominance is sustainable.

Founded in 2023 by Chinese entrepreneur Liang Wenfeng, DeepSeek emerged from High-Flyer Quant, a quantitative hedge fund managing $8 billion in assets. Despite its modest origins, the lab has defied expectations, releasing cutting-edge large language models (LLMs) built with constrained resources and hardware.

DeepSeek’s latest reasoning model, R1, was developed for less than $6 million using Nvidia’s H800 chips, bypassing U.S. export restrictions that bar China from acquiring more powerful H100 chips. In benchmark tests, R1 surpassed American counterparts like OpenAI’s o1, Meta’s Llama 3.1, and Anthropic’s Claude Sonnet 3.5 in critical areas such as problem-solving, mathematics, and coding.

The lab’s earlier V3 model, trained on 14.8 trillion tokens with just 2,048 GPUs, cost a mere $5.58 million to develop—a figure that pales compared to the billions spent by Silicon Valley giants.

Stargate’s Grand Ambitions

Announced with great fanfare, Stargate is a bold initiative by Trump designed to secure U.S. dominance in artificial intelligence. With a budget of $500 billion, the program promises to fund cutting-edge research, build state-of-the-art AI data centers, and bolster partnerships between private companies and government agencies.

Speaking at the launch, Trump emphasized the importance of America staying ahead in the AI race.

“We are launching Stargate because America must lead in artificial intelligence. This is the technology that will define the future of global power, and we will spare no expense in making sure we stay on top,” he said.

However, the unveiling of DeepSeek’s highly competitive models hours later, which sent shockwaves through Silicon Valley, underscored that massive investments do not guarantee dominance.

DeepSeek’s success has raised uncomfortable questions about the U.S. approach to AI development. American tech giants have invested tens of billions of dollars in data centers, cutting-edge GPUs, and proprietary models, operating under the assumption that more money equals better AI.

By contrast, DeepSeek employed a process called distillation to train smaller, efficient models using larger pre-trained systems. This approach dramatically reduces computational costs while maintaining high performance.

Chetan Puttagunta, General Partner at Benchmark, explained the significance of this technique saying: “They can take a really good, big model and use a process called distillation. Basically, you use a very large model to help your small model get smart at the thing you want it to get smart at. That’s actually very cost-efficient.”

Microsoft CEO Satya Nadella, speaking at the World Economic Forum, lauded the ingenuity behind DeepSeek’s methods.

“To see the DeepSeek new model, it’s super impressive in terms of both how they have really effectively done an open-source model that does this inference-time compute, and is super-compute efficient. We should take the developments out of China very, very seriously,” he said.

A Slap to America’s AI Ambitions

DeepSeek’s breakthrough is seen by many as a direct challenge to the ambitions of Stargate. With its low-budget, high-performance models, DeepSeek demonstrates that innovative approaches can rival or surpass even the most well-funded initiatives.

“Necessity is the mother of invention,” noted Perplexity CEO Aravind Srinivas, who praised DeepSeek for turning constraints into advantages. “Because they had to figure out workarounds, they actually ended up building something a lot more efficient.”

Questioning the Export Controls

DeepSeek’s success also raises questions about the effectiveness of U.S. export controls. These measures, aimed at curbing China’s AI progress, bar the sale of advanced semiconductors like Nvidia’s H100s. However, by leveraging H800 chips and innovative training methods, DeepSeek has demonstrated that these restrictions may not be the chokehold Washington envisioned.

DeepSeek isn’t the only Chinese entity making waves in AI. Kai-Fu Lee’s startup 01.ai trained a competitive model for just $3 million, while ByteDance, the parent company of TikTok, recently updated its model to outperform OpenAI’s o1 in key benchmarks.

The achievements of these Chinese labs underscore a shifting dynamic in global AI leadership. While America’s Stargate initiative represents a moonshot approach, China’s cost-efficient advancements show that alternative strategies can achieve remarkable results.

The lab’s open-source approach, which makes its models freely available on platforms like Hugging Face, contrasts sharply with the proprietary systems dominating Silicon Valley. DeepSeek has overtaken ChatGPT on Apple’s app download rankings in the U.S. American tech leaders are now warning that DeepSeek is a sign of bigger AI feats coming from China.

“These developments show that talent and ingenuity can overcome resource constraints. We must take them seriously and prepare for a more competitive global AI landscape,” Nadella said.