DW Newsletter # 198 – DeepSeek, a new contender in the AI arena
When DeepSeek first emerged in late 2023, it seemed like another ambitious startup in the crowded AI landscape. Founded by Chinese hedge fund manager Liang Wenfeng, DeepSeek began with modest attention, releasing AI models that showed promise but were overshadowed by industry giants like OpenAI, Meta, and Google. However, in December 2024, the company catapulted into the global spotlight with the launch of DeepSeek R1, an AI model that shook the foundations of the tech world. This development was not just a technological marvel but a geopolitical wake-up call.
DeepSeek R1 stunned the industry with its ability to rival the capabilities of market leaders, achieving near-parity with models like GPT-4 and Gemini. What set it apart, however, was its shockingly low cost. While US companies like Meta and OpenAI pour billions into AI research and infrastructure, DeepSeek reportedly developed its model for just $5.6 million, leveraging less advanced chips that bypassed US export restrictions. The revelation underscored a significant shift in the AI arms race: resourcefulness could rival raw financial power. The app quickly became the most downloaded on Apple’s App Store, disrupting markets and causing US tech stocks to shed nearly $1 trillion in value within days.
The conversation shifted to national security as the US government scrambled to respond. DeepSeek’s emergence directly challenged US dominance in AI and called into question the effectiveness of export restrictions imposed by the Biden administration. Returning for his second term, President Donald Trump convened a high-stakes meeting with Nvidia CEO Jensen Huang to discuss tightening chip export policies. Nvidia, whose shares dropped 17% after DeepSeek’s success, found itself at the centre of the geopolitical battle, with its cutting-edge AI chips both coveted and restricted.
The Trump administration is now contemplating additional measures to curb China’s access to advanced technology, including halting Nvidia’s H20 chip exports, initially designed to comply with export controls. Lawmakers from both parties are urging a thorough review of US export policies in light of DeepSeek’s achievements. Reports have even suggested that DeepSeek may have illegally obtained US-restricted chips, prompting investigations by the Commerce Department.
For its part, DeepSeek has embraced the controversy. Liang Wenfeng has framed the company’s success as a triumph of innovation over-dependence on Western technology. However, questions about the company’s transparency linger. Critics argue that DeepSeek’s low-cost claims omit the broader expenses of research and development, while concerns about its alignment with the Chinese government’s strategic goals have fueled scepticism in the West. The fact that DeepSeek’s earlier models censored politically sensitive content only deepens fears about its role in state-led narratives.
DeepSeek’s rise has challenged assumptions about the cost and accessibility of cutting-edge technology, prompting both excitement and unease. While the US tightens its policies and grapples with its response, DeepSeek’s trajectory is proof that the race for AI dominance is no longer confined to Silicon Valley; it’s now a high-stakes game of global power and influence.
US President Donald Trump and Nvidia CEO Jensen Huang discussed the challenges posed by China’s advancements in AI, particularly focusing on the impact of Chinese AI company DeepSeek.
DeepSeek sparks AI investment surge in China
Chinese investors are flocking to AI-related stocks, betting that the success of home-grown startup DeepSeek will propel China to the forefront of the AI race amid the escalating Sino-US technology conflict.
Security concerns lead to Australian ban on DeepSeek
Concern over potential security threats has prompted Australia to ban Chinese AI startup DeepSeek from all government devices, joining a growing list of nations restricting its use.
Marko and the Digital Watch team
Highlights from the week of 31-07 February 2025
An LLM project to enhance multilingual AI accessibility.
Lawmakers aim to clarify cryptocurrency regulations as the industry continues to expand.
Domestic technological innovation amid global competition.
The trade war is raging on through retaliatory measures targeting major businesses.
Global collaboration on sustainable and inclusive AI development amid geopolitical tensions.
Affected employees can apply for other roles, though the company has not specified which divisions will see the biggest cuts.
The app’s future in the US remains uncertain.
Hidden text unveiled with AI and X-ray tech.
These changes could have significant financial and operational implications for the e-commerce companies involved.
A recent investigation has revealed that dozens of WhatsApp users across the globe were targeted by advanced spyware designed to infiltrate their devices without any action on their part.
The app sparks national pride and curiosity in the country.
www.diplomacy.edu
Imagine 100,000 people standing in utmost silence for 15 minutes, with their phone flashlights pointed at the sky. They pay tribute to the 15 innocent people who died under the rubble of the collapsed, newly reconstructed eave of the railway station in the city of Novi Sad, Serbia. 100,000 students and supporting citizens, standing still and united in palpable silence, in Belgrade, the capital of Serbia. Those present witnessed a moment that sent a chill up their spine.
dig.watch
In this digitally porous media world, information spreads faster than ever, empowering creativity but also unleashing avalanches of misinformation and deepfakes that blur reality. High-profile clashes, from Novak Djokovic boycotting…
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Part 2 examines the UN’s funding paradox: 128 nations contributing 2.2% of the budget can outvote major donors. Can China replace US leadership? Is Security Council reform urgent? Explore power shifts, moral authority, and the future of multilateralism.
www.diplomacy.edu
DeepSeek’s open-source approach promotes accountability and allows developing countries to leverage AI solutions, potentially levelling the playing field. The shift towards open-source models may also encourage smaller players to create tailored AI systems, fostering a collaborative environment rather than a competitive race. Consequently, trade and technological diffusion can significantly enhance global economic growth and innovation.
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What if we could overcome overconsumption? Could Wikipedia’s approach of respect and collaboration offer a solution? Aldo Matteucci writes.
