I’ve been saying it for years: The country that masters AI will dominate the world economically, politically and militarily. Since ChatGPT dropped, the U.S. seemed untouchable. Most of us Americans assumed we were a couple of years ahead of China in terms of AI, but the game has changed — and fast.
The latest version of DeepSeek AI, an open-source model out of China, is so good, it tanked U.S. tech stock prices (Nvidia lost $593 billion in value!), shot to No. 1 in the Apple App Store overnight and now has the entire world wondering, “If this is what China is showing us, what’s next?”
Move over, OpenAI
DeepSeek was founded in May 2023 in Zhejiang, China. Its first models were nothing to write home about; the latest release, DeepSeek-V3, is another story.
It was developed in just 55 days, trained on 671 billion parameters and performs as well as (or better than) Meta’s Llama, OpenAI’s GPT-4o and Anthropic’s Claude Sonnet 3.5 in math, coding and reasoning. Let that sink in. It took China just two months to beat the American giants.
The money is where it gets really interesting. OpenAI spent $5 billion on its model in just one year. Google shelled out $50 billion on AI development in 2024. Microsoft has invested $13 billion into AI partnerships.
What about DeepSeek? They spent $5.6 million. It’s a cheap Chinese knockoff.
How’d they do it?
China put together a group of young, ambitious, super-smart engineers and researchers who worked under strict limitations. The official story is they couldn’t use Nvidia’s top-tier H100 chips because of U.S. export restrictions. Instead, they worked with less powerful H800 chips.
Rumors suggest China started with over 10,000 super-powered H100 Nvidia AI chips purchased before the Biden administration’s sanctions kicked in. There are also whispers they stole OpenAI’s code as the foundation for DeepSeek-V3.
But here’s the thing: Even if they took someone else’s code, it doesn’t matter anymore. DeepSeek runs efficiently on far fewer chips, uses less electricity and is cheaper to operate than its American counterparts.
The real game-changer is right here
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