Deepseek pops Big Tech Bubble
Yes, another AI post, but this one is slightly different because the appearance of Deepseek, the brand new, open source, ridiculously cheap, Chinese AI feels like Karma. Why? Read on.
I’ll start with the phrase ‘open source’. If you’re not a baby nerd like me, you may not know that open source software gives users all the code to do with as they wish. Linux based products are open source. Firefox, the browser I use, is open source. This means that if I had the skills, I could use that code to customize the software to my exact specifications. To suit me.
In reality, I don’t have the skills to do that, but lots of others do, so if you were a corporation looking to get into AI, would you go with the ridiculously expensive Big Tech offering, or would you go with the customizable Chinese AI that you could tailor to your exact needs? I know which option I would choose.
And apparently the US stock market is already choosing by dumping stocks of Nvidia chips. These are the high performance computer chips needed for AI. Based on the assumption that the AI bubble would continue forever, the stock value of Nvidia chips skyrocketed. Since Deepseek, Nvidia stocks ‘…plummeted 18% due to investor concerns about Chinese AI startup DeepSeek, erasing a record $560 billion from its market capitalization.’ The emphasis is mine. The quote was taken from the video below. :
The collapse of the AI, Big Tech bubble will have a ripple effect globally, and not in a good way, but it was a correction that had to happen, sooner or later.
Personally, I’m delighted to see Karma at work. I’m also delighted by something the Offspring said this morning, namely that fear of China may drive the US government to impose stringent regulations on the whole AI industry.
Why not just impose astronomical tariffs on Deepseek? lol Because it’s free. What percentage of zero is going to act as a deterrent?
Then, why not just ban Deepseek the way they banned Tik Tok?
That is a possibility, but given that American corporations are driven by just one thing – profit – I can’t see them being happy to pay through the nose for an inflated, and increasingly inferior, US product when they could get all the advantages of AI for a pittance. And the advantages are real. At the moment, Deepseek r1 is as good as OpenAI’s ChatGPT but…this is the model that the Chinese developers can afford to give away. I suspect they have far more advanced models that they won’t use as a ‘loss leader’.
Quite simply, the Chinese have thrown competition back in the ring. And if Nvidia’s losses are anything to go by, the Big Tech honeymoon is well and truly over.
That is my hope. If we must have AI then I’d rather have it open source than ‘owned’ by Big Tech cowboys who blatantly stole all our creative content, and copyright be damned. I doubt they will ever be punished for that theft, but Karma, in the shape of Deepseek, may do what the justice system cannot. I hope like crazy that it sends them bankrupt.
cheers,
Meeks
