Context:
A new AI model called DeepSeek, designed by a company in China, is causing a stir as it supposedly performs better than ChatGPT. A storm of headlines about China might take over the AI space has surfaced, but what does this mean in reality and why are people all worked up about it?
Media Frenzy and Global Concerns
- Many reports assume that DeepSeek’s success is a threat to U.S. dominance in AI.
- They suggest that DeepSeek has secret funding from the Chinese government, because it is open source and free.
- Others proclaim that it is just another round in the endless U.S.-China tech rivalry, as if TikTok vs. WhatsApp or Baidu vs. Google.
Job Market DisruptionsL: Is AI About to Hit Harder?
- AI was already going to displace 85 million jobs by 2025 in industries such as customer service, banking, and teaching.
- DeepSeek being free and open source, might go viral even more quickly than ChatGPT and result in even greater job displacement.
- The bigger worry is China will use DeepSeek for political leverage, at least in nations like India.
The Shockwave in Financial Markets
- AI linked stocks plummeted the day after the announcement of DeepSeek.
- Nvidia suffered a loss of $593 billion in market value within one trading day-the biggest single-day loss by any firm ever.
- Other AI related companies lost over $1 trillion.
- DeepSeek’s low cost vs. OpenAI’s massive spending:
- DeepSeek reportedly trained its model for only $6 million, while OpenAI has raised billions and is looking for even more funding.
History Repeating Itself? The Reality of Tech Revolutions
- People tend to believe that technology drives progress, but history shows otherwise. This is the story of the British textile revolution, which occurred during the 18th century.
- The introduction of machines, such as the spinning jenny, helped Britain dominate the industry. The real reason, however, had little to do with technology—it was:
- Heavy tariffs (40 70%) on Indian cotton to kill competition.
- Cheap American grown cotton using slave labor.
- Similar patterns were seen in other tech revolutions, from synthetic indigo (Champaran movement) to electricity and automobiles.
AI’s Future is About More Than Just Innovation
DeepSeek’s rise shows that AI is not just about better algorithms. it’s about who controls the ecosystem. Political, economic, and legal decisions will shape the AI revolution as much as the technology itself. Instead of being swayed by headlines, it’s importa
