America invents and China scales while Europe regulates. The US will throw $billions to create an orthogonal path in technology, totally different from whatever that currently exists, enabling a new basis of competition, but it is China that drives everything, out of phase, in 90 degrees horizontally, to a scaled product for all. Like the Zero to One thesis of Peter Thiel, the orthogonal-horizontal element converges to the same thing: America invents new technology, China is increasingly scaling tech globally.
That seems to be the case with AI as OpenAI ChatGPT, Microsoft Copilot, Google Gemini, etc, drive the vertical invention and innovation, but China seems to be inserting itself on the horizontal diffusion and globalization at scale. One Chinese company, DeepSeek, is causing problems across the markets as they have unveiled an amazing AI product within the open-source large language model framework.
This company has achieved its success by spending just $1 for $100 their US counterparts need. That frugality means these AI models will be largely available to everyone since they made it largely FREE and also anyone can build upon it. Largely, if they succeed, the business models of OpenAI will expire because when something is FREE, great and open all to use, there is really no reason to pay for those special subscriptions.
Watch out, the US AI market will enter a panic mode because DeepSeek is seeking something deeper which is global disruption on who controls the future of AI.
A new artificial intelligence model is challenging OpenAI’s ChatGPT and Google’s Gemini — despite using less advanced chips — to the astonishment of Silicon Valley. China’s DeepSeek says it spent only $5.6 million to develop its R1 model. As of Monday, it was the U.S. Apple App Store’s top-rated free app and sparked a rout in shares of global rivals in pre-market trading. Meta’s AI chief wrote on LinkedIn that it highlights the advantages of open-source over proprietary models.
About DeepSeek: DeepSeek AI is a rapidly emerging player in the artificial intelligence industry, developed by the Chinese startup DeepSeek. The company’s flagship model, DeepSeek-R1, was launched in January 2025 and quickly gained popularity, even surpassing ChatGPT in downloads on the U.S. Apple App Store. Here are some key points about DeepSeek AI:
- Open-Source: DeepSeek AI makes its models open-source, allowing developers to inspect, improve, and customize the software.
- Cost-Effective: DeepSeek-R1 offers performance comparable to leading chatbots at a fraction of the cost, making it accessible to small businesses and developers.
- Reasoning Engine: The platform includes a reasoning feature that articulates its thinking before providing responses, enhancing transparency and user trust.
- Geopolitical Challenges: Despite U.S. export controls on advanced semiconductors, DeepSeek managed to stockpile Nvidia’s H100 chips and continue its development.
- Global Impact: DeepSeek’s success has raised questions about the need for vast expenditures on AI hardware and has challenged the dominance of U.S. tech giants.
DeepSeek AI aims to democratize AI technology, making it accessible to a broader audience. It has been praised for its superior code-generation capabilities and open-source ethos.
