Why the whole world is going bonkers over DeepSeek

1. A good David versus Goliath fight
OpenAI was launched by the likes of billionaire Elon Musk. Even though Musk exited the scene, OpenAI achieved a valuation of $100 billion plus. They joined hands with Microsoft and Nvidia, both which achieved a valuation of a whopping $3 trillion plus. DeepSeek on the other hand was a side project of Liang Wenfeng, who is the co-founder of High-Flyer (a hedge fund) and cost just $6 million. 

2. It’s a real game-changer
The ChatGPT and Co. models consisted of very large trained LLMs and an expensive Nvidia AI chip ecosystem. It was very difficult to think of a newcomer to change the game. DeepSeek’s R1 uses reinforcement learning versus huge expensive datasets of the Americans. Imagine something being done at a huge cost and someone coming out with a similar product that performs just as well and dirt cheap. You can be sure that many more AI startups will jump into the bandwagon trying to emulate DeepSeek.

3. As of now, it really is open source
OpenAI was named so because it wanted to go through the non-profit open-source route. It soon morphed into closed company with the best behind a paywall and an ambition to be like the rest of the Silicon Valley giants. But DeepSeek has taken the open-source route and become just as successful in short time.

4. An arms race between America and China
China has a population of 1 billion plus and their tech giants have become big just staying in China. America though dominates the rest of the world. If cheap Made in China tech products can come out and rock the world, then who knows what will happen if the government and tech moguls get together to conquer world. Under US President Donald Trump, Make America Again is a huge imperative. You may remember that when they released TikTok to the world, it was on course to have the greatest traffic ahead of Google Search and YouTube before India and America decided to crack down on it. Interestingly still TikTok Search managed to displace Google Search in 2024. One of the deals that TikTok is considering is Perplexity AI. Now that would be quite an interesting joint venture!

5. Everybody loves a good stock market crash
Investors look at stock market crashes with horror and uninvested citizens look with glee. Well in a day the global stock market lost a whopping $1 trillion in a day. Who knows what the long-term implications are? Nvidia itself lost hundreds of billions of dollars. 

Where art thou India?

All this brings into sharp focus Tech India. While we have done great in IT services, startups and GCCs, we are nowhere near the world in terms of tech products. Our greatest product is probably UPI, brought out by the Government. We are yet to come anywhere near having a Microsoft or Apple or Nvidia.