The Americans think they have it all, with the most advanced AI chips and stopping export to China would cripple or slow down the development of AI in China. Big AI chips, expensive AI chips from Nvidia would rule the world. All the top American AI companies poured in trillions to get hold of these very expensive chips and think they are up there, and China would be years behind, chasing but never catching up...without the big and expensive chips. Biden and Trump have a success formula to slow down China's growth in AI. So they thought.
Immediately after Trump's inauguration, China sent him a gift that he would not forget, the DeepSeek R1. This AI model came out of the blue, not from well established Chinese AI players, but from a hedge fund CEO that has excess computer machine to work on. And the machine was not the top notch models, and the chips were also not the top notch A100 from Nvidia. He used the lower grade H800 that was not banned and permitted to be exported to China by Nvidia.
Boom, with 2 months effort, this fund manager by the name of Liang Wenfeng, delivered this game changing DeepSeek R1 that blew up the whole Silicon Valley. The cost of developing this app was only US$5.5 million, not hundreds of millions or billions that the American big boys have thrown into the ring. The Americans believe that money would rule the world, the more money, the more expensive chips, mean success. This US$5.5m cheap app could beat all the big boys and their multi billion dollar AI apps. Holy cow, the CEOs of these big companies would have a lot of explanation to do for throwing away billions and still wanting to throw more billions thinking that more money is the way to go.
The bombshell is just exploding with more to come. Liang is giving away this high performing and intelligent app for free. Not only that, it is open source which means everything about the app and its source codes are available to all users and developers to further improve on the app and make money from the app with their own adaptations for commercial use. This would immediately kill all the American big boys' app that charged a fee for usage. The billions and trillions spent by these big boys would turn to dust when their revenue flow is choked off.
And more, the DeepSeek R1 is not only giving the American big boys a run for their money, it is energy efficient, and using relative cheaper chips. Amazon and the gang were investing big in acquiring independent energy equipment to support their high energy consumption chips, thousands of the chips drinking energy like water. DeepSeek R1 is energy efficient and could operate under the normal power grid system.
DeepSeek R1 is now the most loaded app in America and the world. Like the TikTok refugees, all AI users and developers are migrating to DeepSeek R1 in droves, for free. No need for Trump to send them away. They are voting with their feet. The new champion has arrived and knocking stars into all its rivals. Performance, efficiency, effectiveness and low energy cost and for free. It is too good to be true. But this one is real!
What, China is a few years behind the Americans in AI and would slow further without Nvidia chips? It is like the Lamborghinis and Ferraris, costing millions but outrun by a Xiaomi or Zeeker EV costing a fraction of their prices. Who needs or wants to throw millions, in the case of AI, billions when they can get something better and cheaper, very much cheaper, a fraction of the cost to work on?
15 comments:
I guess the billion that was invested/wasted in the stock recently must had also include our Tomasick shares. Wonder whether our G will now switch over to the chinese app instead of paying for those ang mo one to be used in our G sectors?
Good morning All
That's really a remarkable achievement by China.
Frankly, in the past the UAss Tech Stocks are all manipulative and speculations by their own Stakes and Shares holders to jack up their stock prices.
Investors funds into their pockets and banks.
Also insider own tradings and push up prices that investors thought to be Grade One Triple AAA aka Asses values.
Now China brought them all down to Earth.
Cheers
There is now a frenzied attempt at damage control, which may help to stabilize the bloodletting in the stock prices of Nvidia and other top AI competitors for the moment.
However, since it is free for all users, and open for improvements by other global tech nerds to improve on it, more damage is going to happen further down the road. Unlike other AI developers like OpenAI (open in name only, not in reality), which is not open for users to change or modify its workings, DeepSeek is really the only app that honors the name of being 'open' for all.
As pointed out by Redbean, all other AI apps charge a fee for usage, which some may not afford, so DeepSeek is a Godsend for them. That is the reason why there are people saying that DeepSeek is a dangerous competitor, which is going to eat the breakfast, lunch and dinner of the tech Giants moving and investing big in the AI sector going forward. Who else is going to pump in billions more to be rendered impotent?
This development in AI is history in the making. It will be a defining moment that will determine who is going to be the leader in AI. Will it still be the USA as gloated, by its control of high-end chips from Nvidia or more Chinese owned AI entities like DeepSeek? It will be interesting to see.
When Trump shout - 'You are either with US or against US', the result is obvious.
Moreover, Trump may threaten Red Dot with tariffs, the economic nuke that he is using against everyone.
Colombia refused to allow planes deporting Colombians from USA to land in the first instance. One threat from Trump of using tariffs and the Colombian leader, Gustavo Francisco Petro Urrego, trembled and dropped his marbles and relented. Such a shameful leader. Had he not refused in the first instance and relented, he would not be looked upon as an embarrassment.
The Americans were driving up the myth that you need a lot of high end chips that consumed a lot of energy to drive AI. This 'a lot of energy' idea has gone so crazy that Microsoft is going to open a nuclear power station just to run its AI engine. This is crazy, and they are so lucky that DeepSeek came out in time to stop them from wasting so much money on a nuclear power station!
Microsoft CEO needs to be sacked!
That is why I say, do not read too much in the USA's massive spending in its military budget compared to China.
When corruption is rampant in the USA military, when money is syphoned off by military contractors, China's military budget has more bang for the buck despite being much smaller. More is not always better. It is how money is managed and what takes priority over spending that counts. China is doing great in improving its military weapons and updating its missiles, fighter jets and drones. The same way that it is doing with its economic priorities and which sectors to support to win.
China also has less to spend on helping proxies to carry out wars. I have a feeling that all the reported aid given to Ukraine and Israel officially does not tell the whole story. The USA spending in helping to fight these two wars is more than meets the eye.
Imagine all the skyscrapers in New York City were the Microsoft, Meta, Amazon, Alphabets, Google, X, Apple, and China dug a hole under them. Ooops, all came down like Humpty Dumpty and got buried. This is what DeepSeek has done to the American AI titans that were standing at the front row in Trump's inauguration.
When China played her cards closed to their Chests and when they are out DEADLY!
Hi Anon 11.11
Red Dot had nothing manufacturing to UAss!
Except maybe Hawkers food.
So TARiffs no effects.
Cheers
Just roll back some years and look at 5G and EV development.
Now the USA is floating the narrative that DeepSeek is following the model of OpenAI or something to that effect and they are investigating. What model are they talking about when the USA is so tight in controlling its technological model and so-called edge that China had no way to breathe? If DeepSeek had been following the model of OpenAI, how is it possible for DeepSeek to even better the performance of OpenAI in some parameters being tested?
If the USA had a Space Station to boast about, I think they will accuse the Chinese of using their model and try to prevent the Chinese from having their own Tiangong Space Station. If the USA had high-speed railways before China did, would they also be saying that China is following their model and using their patents, which should not be allowed? If the USA had real 5G mobile technology and infrastructures, they would undoubtedly claim that Huawei had used their 5G technology model and must be stopped, instead of using their 'National Security Reason' threat that cannot be proven.
Do we remember that the USA had wanted to target DJI by claiming it used a technology that had been used by the USA military drone maker and therefore is an infringement. DJI's drone technology had little to do with or correspond with the USA's drone technology, and is even more advanced, but they tried to make the accusation stick.
Now that China came out with its 6th generation fighter jet that is way more advance in design, without the usual tail flaps, but with wing tip flaps for control, is the USA going to come up with claims that it is their model that the Chinese have tried to copy? The USA might even claim that they are the first to talk and breathe and the Chinese are following their model, five thousand years before them.
The situation is now so ridiculous, atrocious and skewed with the USA even claiming that China has no right to have any influence anywhere in the world, with Marco Rubio now going around the world trying to counter Chinese influence by telling countries that China must not be allowed to have any influence anywhere in the world.
Why is the USA not accusing China that it is just following 'USA's model' of trying to gain more global influence?
With one app, DeepSeek, China is bankrupting all the American AI operators.
Had China followed USA's model of democracy, China would have remained in the stone age. Will the USA try to claim that China has progressed riding on the USA's democratic model rather than its own socialist system, since China is doing even better than the USA in many areas.
China would be like India, another big democracy and as poor as India.
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