On Monday, American stock markets shuddered, which caused China’s announcement that he created a capable, cheap, artificial intellectual machine. This is the largest cloud, which still represents West in the blue sky about AI, casting doubt on the effectiveness of America’s export control and billions of dollars that the United States invest in the expensive advanced edge of the technology.
China Startup Deepseek says his assistant in artificial intelligence uses less advanced chips than models of its competitors, and it costs less. Unlike billions of West, the Chinese model was developed for only $ 5.6 million, according to one estimate.
“Are we going to spend $ 500 billion to get to the border so that China can find a way to copy homework for a penny for a dollar?” He asked Gregory AllenDirector of the Center for AI Vadhvani at the Center for Strategic and International Studies, on Podcast Friday.
Why did we write this
The last technical company of China challenges investment strategies and ideas about how much experience is necessary for success in artificial intelligence. If history serves, the market can soon see the dramatic defeat of players in AI.
On Monday, the leading shares of the company on art fell on Wall Strack. The price of NVIDIA, the leader in artificial intelligence chips, fell by about 17%, as investors estimated the prospect that Chinese players could threaten US technological profit. S&P 500 fell by almost 1.5%, and the NASDAQ technological fell by 3%.
But experts warned from panic. According to analysts, it is important not to exaggerate the Chinese threat. The new AI Deepseek model is both a true achievement and the hype of Beijing. It shows China's ability to simplify American models, creating a method for smaller and less powerful computer chips to provide answers that compete with the more expensive models of America. Last week, DeepSeek said that its last model can compete with the Openai's ChatGPT version released four months ago.
In many ways, the deepseek model coincides with the production skill of China. And in this case, Deepseek put his product on a public treasure, which means that everyone can use it for free. By Monday, this became a free application with the highest rating in the Apple App Store.
Export management testing, propaganda tools
Deepseek positions China as a quick follower of American technologies. But this is far from challenging the US position in the front edge, analysts say.
“Interesting is high, because, based on available data, we believe that the DeepSeek model relies on larger foundation models that will be developed first of all,” the Bank of America/Merrill Lynch study on Monday. In other words, they cannot be leaders.
The technology also serves as a propaganda tool for Beijing. Showing China's capabilities, the regime hopes to prove that US export controls do not work. But analysts suggest that they simply show the failure of 2022 export control under President Joe Bayden. Since then, these controls have been tightened.
It is possible that DeepSeek announced that she placed her software for AI in a public domain last week after Mr. Bayden released three new rounds of export restrictions aimed at further limiting China's ability to gain access to the most advanced chips.
“Since the land of freedom, America, and not China, must lead the world into the development of AI,” the then President Biden said in his farewell appeal on January 15.
Analysts say that export elements of management cannot stop the flow of technology. But they can make more difficult and more expensive for China to compete and do not lag behind technology, especially with the new joint state-private enterprise of President Donald Trump, which can invest up to $ 500 billion in the AI infrastructure.
Public property and silver overlays for American firms
And although in the short term, the DeepSeek model in public access was a propaganda victory, it may have unpleasant consequences. American companies now have a Chinese code to simplify their own search engines. And with the best access to powerful chips, Americans can create their own models AI, close to the edge, for a much lower cost and, perhaps, offer them for free.
What model will the world market accept? A technology that can give the Chinese government access to their data? Or the western products of the private sector, where, apparently, geopolitical risks below?
The broader question Deepseek poses for investors. If many companies can work with cheaper, good AI, how many investments should be included in the advanced technology?
Currently, these investments are losing money. If the story is what kind of leadership, it will take several years to make a profit in an intensive race, which can lead to leaders up to one or two. Think about Windows Microsoft in personal computers. Or Google in a web post.
One thing is sure. A deep cloud of doubts about the horizon of investors can grow if investors begin to more carefully weigh the promise of AI against the costs of creating it.
