DeepSeek: Radical game-changer

It is a David-and-Goliath story. Deepseek is David with a simple digital slingshot that has beheaded the entire US AI giants and sowed chaos among them in a single sweeping stroke.The simple slingshot is PRODUCTION COST. Deepseek spent a very small fraction of what the US tech giants spent on its powerful AI model. There was an instant massive exodus from ChatGPT to Deepseek. Wall Street was in panic.

Instantly, DeepSeek was attacked from all sides by the US tech giants in panic and anger. This response, however, is a big blunder. Even if they succeed in destroying DeepSeek, a new one, perhaps even more powerful, will emerge. For the NEW GAME has been established and is utterly IRREVERSIBLE, over and above petty legal issues they have and will bring up against DeepSeek.

The best the US tech giants can do is to join the new game, not try to destroy it, which they cannot do anyway. It is a lesson in humility and simplicity, in radical downsizing. It is also a lesson in monitoring the limits of antitrust. The grapple for positioning was fueled by dreams of massive profits, which have instantly vanished. Deepseek has forced the entire US tech giants and their AI models to downsize to Deepseek’s level, the new competitive norm.

But of course, the expensive high-end AI models of the US tech giants have to be trimmed down radically because DeepSeek has established a new competitive price, way, way lower than Silicon Valley prices. That is the hard part. Can the US tech giants adjust to the new game? The tectonic windfall profits they have been dreaming of are suddenly now an illusion of grandeur. The US tech giants have to do a lot of soul-searching, brainstorming, and regrouping in the new irreversible game that they are forced into.

What is even more surprising is that Deepseek’s AI models reportedly focused on using “less-advanced NVIDIA H800 chips” for its AI model. It is accused of using banned chips, which were allegedly smuggled through Singapore. (Source — Vantage on Firstpost.)

Even the Pentagon is involved in the Deepseek controversy. “US Department of Defense workers (got) caught up in the DeepSeek hype, connecting their work computers to Chinese servers… for at least two days.” (Bloomberg.)

All of these new controversies emerging are, in truth, to protect Western AI supremacy. Italy and Australia have banned Deepseek. In a sense, the war versus Deepseek is not just about AI. It is tinted with geopolitics, the fact that China, an enemy of the West, has come up with something challenging Western AI supremacy.

Trump’s Commerce Secretary Pick initiated the salvo versus DeepSeek by accusing it of stealing US intellectual property, a questionable move. Pick went on to justify Trump’s increased trade tariffs as a response to Deepseek’s intrusion.

Guns blazing, the US tech giants followed, orchestrating an all-out cyber-attack on DeepSeek. It is not just the tech giants that want the head of Deepseek on a silver platter. The entire West feels threatened. DeepSeek, for them, is a deep-penetration intrusion on American AI supremacy.

Clearly, DeepSeek is a lesson for the dominant AI players to replicate rather than kill the new irreversible AI game.