Media Frenzy over DeepSeek AI

The announcement of the China-based AI product, DeepSeek, has sparked significant media attention, with headlines claiming it has surpassed the American AI, ChatGPT. This has led to discussions about the potential shift in AI dominance from the US to China and raised national security concerns.

Comparison with ChatGPT

• DeepSeek is free and open-source, leading to speculation about Chinese government subsidies.
• The development costs for DeepSeek were under $6 million, much lower than the billions invested in ChatGPT by OpenAI.
• Concerns include whether DeepSeek could lead to more extensive job displacement compared to ChatGPT and its potential use for political purposes by the Chinese government.

Impact on the Tech Industry

• The tech community, previously poised to capitalize on the AI boom, now faces challenges due to DeepSeek's emergence.
• Significant market impacts have been observed, such as Nvidia losing 17% in market value, alongside a collective $1 trillion loss in related sectors.

Historical Context of Technological Revolutions

The current AI developments draw parallels with past technological revolutions, such as the 18th-century textile industrial revolution in Britain.

Textile Industrial Revolution

• Innovations like the spinning jenny and water frame are credited with transforming the textile industry.
• Britain's strategy included imposing high import duties on Indian cotton and using American-grown cotton with slave labor to compete with Indian textiles.

Broader Implications

• The success of technological revolutions often depends on a combination of social, legal, and economic factors, not just inventions.
• Understanding these variables is crucial for comprehending the ongoing AI revolution and its societal impacts.