Will the United States experience a "DeepSeek moment" as it had a "Sputnik moment" nearly 70 years ago? The question has inevitably arisen in recent days, following the surprise success of an app produced by a Chinese artificial intelligence (AI) start-up, DeepSeek, which appears to be overturning the business model of its major American rivals and casting doubt on the technological supremacy of the US in its great competition with China.
Roughly speaking, DeepSeek does as well as its rival ChatGPT, but with 50 times fewer resources, particularly in terms of energy. And it's produced without the state-of-the-art chips that Chinese tech companies do not have access to because of the US embargo on the most advanced semiconductors.
In Hangzhou, a city of over eight million on China's east coast, home to numerous tech companies, DeepSeek employees deserted their modest offices for the traditional Chinese New Year vacation on Tuesday, January 28, a world away from the shockwaves that are shaking two pillars of American capitalism on the other side of the planet: Wall Street and Silicon Valley.
A 'wake-up call'
On Wall Street, the share prices of semiconductor manufacturers, digital giants and future energy companies plummeted: A "bloodbath," in the words of the Wall Street Journal. Tech executives tried to put on a brave face in the face of this humiliating demonstration of technological prowess achieved with a much lower budget. Sam Altman, the boss of OpenAI, which produces ChatGPT, conceded that DeepSeek's first steps were "impressive." US President Donald Trump got straight to the point: Here was a "wake-up call" that he hoped would be "positive," as long as manufacturers learned from it that they could achieve the same result without "spending billions and billions."
But who was it who, a few days earlier, was touting the billions of dollars pledged by OpenAI, Oracle and SoftBank to finance Stargate, a gigantic private AI infrastructure project? None other than Trump, who honored the "techbros," his new barons, under the dome of the Capitol on January 20 during his inauguration. Now the question is if DeepSeek, the Chinese app with a reported price tag of $5.6 million, will rival Stargate, the $500 billion American project. It's worth a close look – which is what American industry experts are frantically doing.
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