by Malcolm Murray
As someone who thinks about AI day-in and day-out, it is always fascinating to see which events in the AI space break out of the AI bubble and into the attention of the wider public. ChatGPT in November 2022 was of course one. The podcast-creating ability of Google’s NotebookLM almost got there, but didn’t quite reach the “getting-texts-from-grandma” level of virality. But this week, with DeepSeek’s launch of its R1 model, we had another event at the ChatGPT level that again resulted in questioning texts from spouses and colleagues.
There have already been a thousand takes on this and I apologize in advance if you’re already sick of the subject. However, I hope this piece can give you what Brad DeLong calls Value Above Replacement, since it shows where the myriad takes fit in the current broader narratives. I also shine a light on the “Model T” aspect, that I feel has been somewhat overlooked.
First, there is the geopolitical take, or what we can more formally call the delta between US and China. This is why Marc Andreessen and others referred to DeepSeek as a “Sputnik moment”. The long-standing assumption was that China was 1-2 years behind the U.S. in developing AI models. This assumption shattered this week; it turns out China is only a few months behind. This also relates to the long-cherished view in the U.S. of China being solely a fast follower, only able to copy the U.S., which the DeepSeek engineers put an end to by pioneering some very smart machine learning techniques, such as greater efficiencies from better use of Mixture of Experts (MOE) and Multi-Head Latent Attention (MLA). So it makes sense that this would be a shock to many Americans. However, the Sputnik analogy per se doesn’t fully make sense. Given all the focus the U.S. already has on AI and the huge investments it is already making, it is unclear how this “Sputnik moment” would change things. Trump, Altman and co just announced $500 billion in funding for Stargate, so what are they going to do as a DeepSeek response, announce another $500 billion? That seems a bit hard given that most of the money in the Stargate announcement was already committed years ago and the rest of it might be vapor dollars that do not actually exist. Read more »