I Am Very Wary Of People Going "China Does It Better Than America" Because Most Of It Is Just Reactionary

I am very wary of people going "China does it better than America" because most of it is just reactionary rejection of your overlord in favor of his rival, but this story is 1. absolutely legit and 2. way too funny.

US wants to build an AI advantage over China, uses their part in the chip supply chain to cut off China from the high-end chip market.

China's chip manufacturing is famously a decade behind, so they can't advance, right?

They did see it as a problem, but what they then did is get a bunch of Computer Scientists and Junior Programmers fresh out of college and funded their research in DeepSeek. Instead of trying to improve output by buying thousands of Nvidia graphics cards, they tried to build a different kind of model, that allowed them to do what OpenAI does at a tenth of the cost.

Them being young and at a Hedgefund AI research branch and not at established Chinese techgiants seems to be important because chinese corporate culture is apparently full of internal sabotage, so newbies fresh from college being told they have to solve the hardest problems in computing was way more efficient than what usually is done. The result:

American AIs are shook. Nvidia, the only company who actually is making profit cause they are supplying hardware, took a hit. This is just the market being stupid, Nvidia also sells to China. And the worst part for OpenAI. DeepSeek is Open Source.

Anybody can implement deepseek's model, provided they have the hardware. They are totally independent from DeepSeek, as you can run it from your own network. I think you will soon have many more AI companies sprouting out of the ground using this as its base.

What does this mean? AI still costs too much energy to be worth using. The head of the project says so much himself: "there is no commercial use, this is research."

What this does mean is that OpenAI's position is severely challenged: there will soon be a lot more competitors using the DeepSeek model, more people can improve the code, OpenAI will have to ask for much lower prices if it eventually does want to make a profit because a 10 times more efficient opensource rival of equal capability is there.

And with OpenAI or anybody else having lost the ability to get the monopoly on the "market" (if you didn't know, no AI company has ever made a single cent in profit, they all are begging for investment), they probably won't be so attractive for investors anymore. There is a cheaper and equally good alternative now.

AI is still bad for the environment. Dumb companies will still want to push AI on everything. Lazy hacks trying to push AI art and writing to replace real artists will still be around and AI slop will not go away. But one of the main drivers of the AI boom is going to be severely compromised because there is a competitor who isn't in it for immediate commercialization. Instead you will have a more decentralized open source AI field.

Or in short: