The Passion of the DeepSeek

The future of humanity is being decided as we speak. And it is not being decided on a battlefield in Eastern Europe, or the Middle East or the Taiwan Strait, but in the data centers and research facilities where technology experts create “the physical and virtual infrastructure to power the next generation of Artificial Intelligence.”

This is a full-blown, scorched-earth free-for-all that has already racked up a number of casualties though you wouldn’t know it from reading the headlines which typically ignore recent ‘cataclysmic’ developments. But when President Trump announced the launching of a $500 billion AI infrastructure project (Stargate) just hours after China had released its DeepSeek R1 — which “outperforms its rivals in advanced coding, math, and general knowledge capabilities” — it became painfully obvious that the battle for the future ‘is on’ in a big way. And this is not a battle that either side can afford to lose, writes The Unz Review.

Here’s how technology expert Adam Button summed it up:

Imagine we’re back in 2017 and the iPhone X was just released. It was selling $999 and Apple was crushing sales and building a wide moat around its ecosystem.

Now imagine, just days later, another company introduced a phone and platform that was equal in every way if not better and the price was just $30.

That’s what unfolded in the AI space today. China’s DeepSeek released an opensource model that works on par with OpenAI’s latest models but costs a tiny fraction to operate. Moreover, you can even download it and run it free (or the cost of your electricity) for yourself.

The product is a huge leap in terms of scaling and efficiency and may upend expectations of how much power and compute will be needed to manage the AI revolution. It also comes just hours before Trump is expected to unveil a $100 billion investment in US datacenters. The model shows there are different ways to train foundational AI models that offer up the same results with much less cost. It also opens up far more applications for AI that would have been too expensive to run previously, which should broaden the applications in the real economy.

Imagine the panic that is spreading across western tech capitals right now. AI was supposed to be the fast-track to absolute societal control and oligarchic rule into the next millennia, but now those pesky Chinese have overturned the applecart leaving western elites with a problem they might not be able to fix. They expected that their microchip sanctions would sabotage China’s AI efforts for at least a decade-or-so but, instead, China has come roaring back with a system that has left the tech giants gasping for air.

TechCrunch reports that three Chinese labs — DeepSeek, Alibaba, and Moonshot AI’s Kimi — have now released models they say match OpenAI’s o1’s capabilities, with DeepSeek first previewing R1 in November. Cutting-edge Chinese “reasoning” model rivals OpenAI o1 — and it’s free to download, ars technica

This is a very big deal. The United States intends to dominate the world in this critical technology and yet the upstart Chinese have not only produced a system that is every bit as good as America’s best, but have made it more affordable, more accessible and more transparent. What’s not to like?

(Note — OpenAI is an American artificial intelligence (AI) research laboratory. It is made up of the non-profit OpenAI Incorporated and its for-profit subsidiary corporation OpenAI Limited Partnership. OpenAI has emerged to be one of the primary leaders of the generative AI era. OpenAI is a privately held company that has open sourced some of its technology, but it has not open sourced most of its technology… In contrast, DeepSeek AI R1 is open source which means its code is publicly accessible — anyone can see, modify, and distribute the code as they see fit. Open source software is developed in a decentralized and collaborative way, relying on peer review and community production.)

Here’s more from political analyst Arnaud Bertrand in a post:

Most people probably don’t realize how bad the news (about) China’s Deepseek is for OpenAI. They’ve come up with a model that matches and even exceeds OpenAI’s latest model o1 on various benchmarks, and they’re charging just 3% of the price. It’s essentially as if someone had released a mobile on par with the iPhone but was selling it for $30 instead of $1000. It’s this dramatic.

What’s more, they’re releasing it open-source so you even have the option – which OpenAI doesn’t offer – of not using their API at all and running the model for “free” yourself.

If you’re an OpenAI customer today you’re obviously going to start asking yourself some questions, like “wait, why exactly should I be paying 30X more?”. This is pretty transformational stuff, it fundamentally challenges the economics of the market…

So basically, it looks like the game has changed. All thanks to a Chinese company that just demonstrated how U.S. tech restrictions can backfire spectacularly – by forcing them to build more efficient solutions that they’re now sharing with the world at 3% of OpenAI’s prices. As the saying goes, sometimes pressure creates diamonds.

Get the picture?

Everything the US has done to stymie China’s development — including economic sanctions, chips embargoes, military provocations, political meddling, even arresting a Huawei executive (truly pathetic) — has blown up in their faces. China’s well-educated, highly motivated, technologically adept workforce have produced a model of AI that equals or exceeds the best the West has to offer at a fraction of the cost and with open sourcing that allows users to modify, and distribute the code as they see fit.

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