A Chinese AI startup sent shockwaves through Silicon Valley, and it appears that AI dominance in the US is in danger.
Bloomberg reported that DeepSeek has been around for less than a year and launched an AI model with performance comparable to the best chatbots in the world at a fraction of their cost.
Fears of DeepSeek disrupting the U.S. tech industry caused major U.S. companies, including Nvidia and Microsoft, to lose a massive $1 trillion in market capitalization on Monday.
The startup’s ChatGPT AI model R1 outperforms America’s top AI models despite being cheaper and using less powerful chips. This raises concerns about the U.S. losing its lead in artificial intelligence.
CNBC reported that the Chinese model has also called into question Big Tech’s massive expenditure on AI models and data centers.
CNBC reported that Microsoft CEO Satya Nadella commented Wednesday, at the World Economic Forum, in Davos Switzerland.
“We should take China’s developments very seriously.”
Congress could try to find a way to stop Beijing’s technological advancements, as the Biden administration has failed to curb chip exports. Beijing relies heavily on technology to support its military and economy.
DeepSeek has either found a workaround for the rules or the export controls are not strong enough.
Donald Trump has said that the rise of R1 is a “wake-up call” for Silicon Valley.
David Sacks – Trump’s crypto and AI chief – blamed the Biden Administration for regulations that “hamstrung AI development”.
DeepSeek R1 proves that AI will be a very competitive race and that President Trump made the right decision to revoke the Biden EO which hamstrung American AI firms without asking if China would do the same. (Obviously not.) Sacks wrote on X: “I’m confident about the U.S., but we cannot be complacent.
OpenAI, Oracle, and SoftBank, a new partnership formed two days after Trump took office, announced a joint investment of up to $500 billion in infrastructure related to artificial intelligence.
