The U.S. And China Are Engaged In A High Stakes Battle For Technological Dominance – And The U.S. Is Starting To Lose | End Of The American Dream

At this moment, we are witnessing an epic struggle for dominance between the United States and China.  A technological arms race is raging, and the Chinese are beginning to pull ahead.  I realize that this may be difficult for many of you to believe, but if you doubt what I am saying just read all the way to the end of this article.  A decade ago, the U.S. was clearly leading, but over the past decade there has been a dramatic shift.  Needless to say, if the Chinese are able to continue to race ahead of us that is going to have enormous implications for the entire planet.

This week, everyone is talking about DeepSeek.  According to Kevin O’Leary, the new AI tool that they have come up with “rivals the best that US firms have to offer”, and they have created it “at a fraction of the cost”…

The Artificial Intelligence wars have begun.

China fired the first shot.

On Monday, $1 trillion in stock market value was wiped off the books of American tech companies after Chinese startup DeepSeek created an AI-tool that rivals the best that US firms have to offer – and at a fraction of the cost.

This Chinese AI tool has caused a wave of sheer panic on Wall Street.

It took billions of dollars to train and develop OpenAI, but apparently it only took millions of dollars to train and develop DeepSeek’s model…

DeepSeek claims its engineers trained their AI-model with $6 million worth of computer chips, while leading AI-competitor, OpenAI, spent an estimated $3 billion training and developing its models in 2024 alone.

On Monday, it surpassed OpenAI’s ChatGPT and became the number one download in the App Store on Apple.com.

What the Chinese have just accomplished is nothing short of breathtaking.

Marc Andreessen is referring to it as “AI’s Sputnik moment”…

It was nothing short of ‘AI’s Sputnik moment,’ according to Marc Andreessen, one of the foremost tech investors in the world, a reference to October 4, 1957, the day the Soviet Union beat the US to launch the first satellite into space.

Of course this was just the beginning.

On Wednesday, another Chinese tech giant, Alibaba, unveiled an AI model that it claims is even better than what DeepSeek has released.

The U.S. is quickly falling behind, and that may be why President Trump just initiated the “Stargate Project” which will result in 500 billion dollars being invested in AI development in the United States by the end of this decade.

Unfortunately, it isn’t just in the field of artificial intelligence that we are falling behind.

According to a shocking new study that was recently released, “China dominates the US in 57 of 64 critical technologies, up from just three in 2007″…

A comprehensive, 20-year study released by the Australian Strategic Policy Institute in 2024 calculated that China dominates the US in 57 of 64 critical technologies, up from just three in 2007.

The US, which led in a whopping 60 sectors in 2007, now leads in just seven.

ASPI based its rankings on cumulative innovative and high-impact research published and patented by national universities, labs, companies and state agencies.

Let that sink in for a moment.

We were way ahead of China in 2007, but now they are way ahead of us.

In other words, in this epic battle for technological dominance we are getting kicked around pretty good.

Just look at what is happening in the race for unlimited clean energy…

China’s Experimental Advanced Superconducting Tokamak (EAST), also known as the “artificial sun,” has set a new world record by sustaining high-confinement plasma for an impressive 1,066 seconds. This achievement, reached on January 20, marks a major step forward in the quest to develop fusion power as a clean and limitless energy source.

The 1,066-second milestone represents a significant leap in fusion research. It was accomplished by the Institute of Plasma Physics (ASIPP) at the Hefei Institutes of Physical Science (HFIPS), part of the Chinese Academy of Sciences. This new record greatly exceeds the previous world record of 403 seconds, also set by EAST in 2023.

The Chinese hope to develop a limitless energy source by replicating the nuclear fusion process that occurs on the Sun.

If they are able to achieve this, the balance of power in the world will experience a seismic shift.

And right now we are hopelessly behind the Chinese in this area.

China is also way ahead of us when it comes to drone technology.  When I asked Google AI about this, I received this response…

Yes, according to current information, China is considered the leader in drone technology, primarily due to the dominance of DJI, a Chinese company that holds a significant share of the global consumer drone market, making them the leading producer and seller of civilian drones worldwide.

DJI is an absolute powerhouse.

According to MIT’s Technology Review, DJI now has “more than a 90% share of the global consumer market”…

Whether you’ve flown a drone before or not, you’ve probably heard of DJI, or at least seen its logo. With more than a 90% share of the global consumer market, this Shenzhen-based company’s drones are used by hobbyists and businesses alike for photography and surveillance, as well as for spraying pesticides, moving parcels, and many other purposes around the world.

As far as drone technology is concerned, it has been estimated that China is 10 years ahead of us.

Of course it doesn’t take a genius to figure out how this happened.

While our young people were spending countless hours goofing around on social media, youth in China were being relentlessly drilled in math, science and engineering.

Our system of education has been a disaster for decades, and now it is catching up with us in a major way.

Needless to say, if the Chinese continue to race ahead of us they will be on course to achieve their goal of becoming the primary superpower in the world.

The stakes are incredibly high, and this battle for technological dominance is one that we cannot afford to lose.

Michael’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

About the Author: Michael Snyder’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com. He has also written eight other books that are available on Amazon.com including “Chaos”, “End Times”, “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”.  When you purchase any of Michael’s books you help to support the work that he is doing.  You can also get his articles by email as soon as he publishes them by subscribing to his Substack newsletter.  Michael has published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and he always freely and happily allows others to republish those articles on their own websites.  These are such troubled times, and people need hope.  John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.”  If you have not already done so, we strongly urge you to invite Jesus Christ to be your Lord and Savior today.

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DeepSeek’s cheaper models and weaker chips call into question trillions in AI infrastructure spending | Business Insider

A worker inside a QTS Data Center.Blackstone

• China’s DeepSeek model challenges US AI firms with cost-effective, efficient performance.
• DeepSeek’s model, using modest hardware, is 20 to 40 times cheaper than OpenAI’s.
• DeepSeek’s efficiency raises questions about US investments in AI infrastructure.

The bombshell that is China’s DeepSeek model has set the AI ecosystem alight.

The models are high-performing, relatively cheap, and compute-efficient, which has led many to posit that they pose an existential threat to American companies like OpenAI and Meta — and the trillions of dollars going into building, improving, and scaling US AI infrastructure.

The price of DeepSeek’s open-source model is competitive — 20 to 40 times cheaper to run than comparable models from OpenAI, Bernstein analysts said.

But the potentially more nerve-racking element in the DeepSeek equation for US-built models is the relatively modest hardware stack used to build them.

The DeepSeek-V3 model, which is most comparable to OpenAI’s ChatGPT, was trained on a cluster of 2,048 Nvidia H800 GPUs, according to the technical report published by the company.

H800s are the first version of the company’s defeatured chip for the Chinese market. After the regulations were amended, the company made another defeatured chip, the H20 to comply with the changes.

Though this may not always be the case, chips are the most substantial cost in the large language model training equation. Being forced to use less powerful, cheaper chips created a constraint that the DeepSeek team has ostensibly overcome.

“Innovation under constraints takes genius,” Sri Ambati, the CEO of the open-source AI platform H2O.ai, told Business Insider.

Even on subpar hardware, training DeepSeek-V3 took less than two months, the company’s report said.

The efficiency advantage

DeepSeek-V3 is small relative to its capabilities and has 671 billion parameters, while ChatGPT-4 has 1.76 trillion, which makes it easier to run. But DeepSeek-V3 still hits impressive benchmarks of understanding.

Its smaller size comes in part by using a different architecture than ChatGPT, called a “mixture of experts.” The model has pockets of expertise built in, which go into action when called upon and sit dormant when irrelevant to the query. This type of model is growing in popularity, and DeepSeek’s advantage is that it built an extremely efficient version of an inherently efficient architecture.

“Someone made this analogy: It’s almost as if someone released a $20 iPhone,” Jared Quincy Davis, the CEO of Foundry, told BI.

The Chinese model used a fraction of the time, a fraction of the number of chips, and a less capable, less expensive chip cluster. Essentially, it’s a drastically cheaper, competitively capable model that the firm is virtually giving away for free.

Bernstein analysts said that DeepSeek-R1, a reasoning model more comparable to OpenAI’s o1 or o3, is even more concerning from a competitive standpoint. This model uses reasoning techniques to interrogate its own responses and thinking, similar to OpenAI’s latest reasoning models.

R1 was built on top of V3, but the research paper released with the more advanced model doesn’t include information about the hardware stack behind it. DeepSeek used strategies like generating its own training data to train R1, which requires more compute than using data scraped from the internet or generated by humans.

This technique is often referred to as “distillation” and is becoming standard practice, Ambati said.

Distillation brings with it another layer of controversy, though. A company using its own models to distill a smarter, smaller model is one thing. But the legality of using other company’s models to distill new ones depends on licensing.

Still, DeepSeek’s techniques are more iterative and likely to be taken up by the AI indsutry immediately.

For years, model developers and startups have focused on smaller models since their size makes them cheaper to build and operate. The thinking was that small models would serve specific tasks. But what DeepSeek and potentially OpenAI’s o3 mini demonstrate is that small models can also be generalists.

It’s not game over

A coalition of players including Oracle and OpenAI, with cooperation from the White House, announced Stargate, a $500 billion data center project in Texas — the latest in a quick procession of developments in large-scale conversion to accelerated computing. DeepSeek’s surprise release has called that investment into question, and Nvidia, the largest beneficiary of the investment, is on a roller coaster as a result. The company’s stock plummeted more than 13% Monday.

But Bernstein said the response is out of step with the reality.

“DeepSeek DID NOT ‘build OpenAI for $5M’,” Bernstein analysts wrote in a Monday investor note. The panic, especially on X, is blown out of proportion, the analysts said.

DeepSeek’s own research paper on V3 says: “The aforementioned costs include only the official training of DeepSeek-V3, excluding the costs associated with prior research and ablation experiments on architectures, algorithms, or data.” So the $5 million figure is only part of the equation.

“The models look fantastic but we don’t think they are miracles,” Bernstein continued. Last week China also announced a roughly $140 billion investment in data centers, in a sign that infrastructure is still needed despite DeepSeek’s achievements.

The competition for model supremacy is fierce, and OpenAI’s moat may indeed be in question. But demand for chips shows no signs of slowing, Bernstein said. Tech leaders are circling back to a centuries-old economic adage to explain the moment.

The Jevons paradox is the idea that innovation begets demand. As technology gets cheaper or more efficient, demand increases much faster than prices drop. That’s what providers of computing power, such as Foundry’s Jared Quincy Davis, have been espousing for years. This week, Bernstein and Microsoft CEO Satya Nadella picked up the mantle, too.

“Jevons paradox strikes again!” Nadella posted on X Monday morning. “As AI gets more efficient and accessible, we will see its use skyrocket, turning it into a commodity we just can’t get enough of.”

Read the original article on Business Insider

Source: DeepSeek’s cheaper models and weaker chips call into question trillions in AI infrastructure spending

What is DeepSeek? Get to know the Chinese startup that shocked the AI industry | Business Insider

DeepSeek is a popular Chinese AI chatbot that has seemingly demonstrated that it is possible to create a robust LLM without spending billions.Justin Sullivan/Getty Images

• DeepSeek is a Chinese AI company whose newest chatbot shocked the tech industry.
• DeepSeek says its AI model rivals top competitors, like ChatGPT’s o1, at a fraction of the cost.
• DeepSeek’s rise has impacted tech stocks and led to scrutiny of Big Tech’s massive AI investments.

An artificial intelligence company based in China has rattled the AI industry, sending some US tech stocks plunging and raising questions about whether the United States’ lead in AI has evaporated.

The Chinese startup, DeepSeek, unveiled a new AI model last week that the company says is significantly cheaper to run than top alternatives from major US tech companies like OpenAI, Google, and Meta.

Here’s everything you need to know about the hot new company.

What is DeepSeek?

DeepSeek is a Chinese artificial intelligence startup founded in 2023.

It’s been the talk of the tech industry since it unveiled a new flagship AI model last week called R1 on January 20 with a reasoning capacity that DeepSeek says is comparable to OpenAI’s o1 model but at a fraction of the cost.

DeepSeek made the latest version of its AI assistant available on its mobile app last week — and it has since skyrocketed to become the top free app on Apple’s App Store, edging out ChatGPT.

Who is behind DeepSeek?

DeepSeek started as an AI side project of Chinese entrepreneur Liang Wenfeng, who in 2015 cofounded a quantitative hedge fund called High-Flyer that used AI and algorithms to calculate investments.

After buying thousands of Nvidia chips, Wenfeng started DeepSeek in 2023 with funding from High-Flyer.

The AI chatbot can be accessed using a free account via the web, mobile app, or API.

Why are investors worried about DeepSeek?

DeepSeek’s R1 model is built on its V3 base model. The company has said the V3 model was trained on around 2,000 Nvidia H800 chips at an overall cost of roughly $5.6 million.

And though the training costs are only one part of the equation, that’s still a fraction of what other top companies are spending to develop their own foundational AI models. Mark Zuckerberg, for example, announced that Meta plans to spend over $60 billion in capital expenditures this year as it doubles down on AI.

According to Bernstein analysts, DeepSeek’s model is estimated to be 20 to 40 times cheaper to run than similar models from OpenAI.

The relatively low stated cost of DeepSeek’s latest model — combined with its impressive capability — has raised questions about the Silicon Valley strategy of investing billions into data centers and AI infrastructure to train up new models with the latest chips.

Nvidia, a company that produces the high-powered chips crucial to powering AI models, saw its stock close on Monday down nearly 17% on Monday, wiping hundreds of billions from its market cap. Other Big Tech companies have also been impacted.

DeepSeek has also said its models were largely trained on less advanced, cheaper versions of Nvidia chips — and since DeepSeek appears to perform just as well as the competition, that could spell bad news for Nvidia if other tech giants choose to lessen their reliance on the company’s most advanced chips.

What are tech leaders saying about DeepSeek?

DeepSeek’s success is also getting top tech leaders talking.

Meta’s chief AI scientist, Yann LeCun, looked to temper some people’s panic over DeepSeek’s rise in a post on Threads over the weekend.

LeCun said it’s not so much that China’s AI advancements are leapfrogging ahead of the US, it’s more that “open source models are surpassing proprietary ones.”

Microsoft CEO Satya Nadella also weighed in on X.

“Jevons paradox strikes again!” Nadella posted Monday morning, referencing the idea that innovation breeds demand. “As AI gets more efficient and accessible, we will see its use skyrocket, turning it into a commodity we just can’t get enough of.”

Marc Andreessen, the cofounder of Silicon Valley venture capital firm Andreessen Horowitz said in a social media post that “Deepseek R1 is AI’s Sputnik moment,” referencing the Soviet Union’s satellite that shocked the US and helped launch the space race.

How does DeepSeek compare to ChatGPT and what are its shortcomings?

DeepSeek says that its R1 model rivals OpenAI’s o1, the company’s reasoning model unveiled in September.

Like o1, DeepSeek’s R1 takes complex questions and breaks them down into more manageable tasks.

R1’s proficiency in math, code, and reasoning tasks is possible thanks to its use of “pure reinforcement learning,” a technique that allows an AI model to learn to make its own decisions based on the environment and incentives.

Similar to ChatGPT, DeepSeek’s R1 has a “DeepThink” mode that shows users the machine’s reasoning or chain of thought behind its output.

Business Insider’s Tom Carter tested out DeepSeek’s R1 and found that it appeared capable of doing much of what ChatGPT can. The app looks similar to that of ChatGPT, with a sparse interface dominated by a text box.

One of the few things R1 is less adept at, however, is answering questions related to sensitive issues in China. For example, when Carter asked DeepSeek about the status of Taiwan, the chatbot tried to steer the topic back to “math, coding, and logic problems,” or suggested that Taiwan has been an “integral part of China” for centuries.

Read the original article on Business Insider

Source: What is DeepSeek? Get to know the Chinese startup that shocked the AI industry