How DEEP SEEK has America in DEEP S£$% but why that might be amazing for the rest of us…

5 min readJan 28, 2025

Special Emergency #TechTuesday edition

A seismic shift has occurred in the AI landscape.

So It was nice to be asked to talk about it on BBC radio — as their AI and tech expert. As… A Chinese tech startup, DeepSeek, has achieved what Silicon Valley giants like OpenAI and Google spent years and billions to accomplish — at a fraction of the cost. With a reported budget of just $6 million, their AI model, DeepSeek-R1, is making waves, outpacing ChatGPT in app downloads while shaking up global markets.

Nvidia alone saw nearly $600 billion wiped from its market value, with the NASDAQ experiencing a significant jolt before partially recovering.

For senior executives and decision-makers, this development isn’t just another headline. It’s a signal that the AI game is evolving faster than ever — and ignoring it could mean falling behind.

The DeepSeek Disruption: What You Need to Know

DeepSeek, previously an unknown entity outside China, has entered the global AI arena with a model that challenges the dominance of Western tech heavyweights. Unlike GPT-4, DeepSeek-R1 is openly available, reducing barriers to entry for businesses looking to integrate advanced AI. In fact, it is now the number one downloaded APP in the world…

But this isn’t just about the technology — it’s a geopolitical and economic story, too. If China can create high-performing AI models with minimal investment, what does this mean for U.S. tech leadership? How should leaders prepare for a world where AI becomes both an innovation tool and a potential point of geopolitical tension?

Why This Matters for Business Leaders

AI Costs Are Plummeting

DeepSeek has shown it’s possible to develop a competitive AI model for under $6 million. This is a stark contrast to the billions spent by established players like OpenAI. For businesses, this means a shift in the market — AI solutions that once seemed costly or exclusive may soon become accessible to a wider range of companies. Leaders must evaluate their current AI budgets, renegotiate contracts, and explore emerging players offering competitive alternatives.

AI is Now a Geopolitical Issue

Despite strict U.S. export controls on advanced Nvidia chips, DeepSeek found a way to train its model. This highlights a new reality: technological innovation is no longer confined to Silicon Valley. For companies reliant on U.S.-based AI providers, now is the time to consider supply chain resilience and evaluate the risks of AI becoming a geopolitical flashpoint.

The Open vs. Closed AI Debate

DeepSeek’s decision to make its model openly available contrasts sharply with the increasingly proprietary approach of OpenAI. This could mark a turning point for businesses. Will companies opt for high-performing, open-source AI models, or continue to invest in premium, closed systems? Leaders must weigh the trade-offs between cost, transparency, and reliability while keeping an eye on how these dynamics shift.

Market Instability is Here to Stay

DeepSeek’s impact on tech stocks highlights the fragility of current AI valuations. If a $6 million model can rival GPT-4, what does this say about the sustainability of billion-dollar AI startups? Leaders should prepare for continued turbulence in the AI market, understanding that today’s dominant players may not hold their position tomorrow.

For example, on Google, DeepSeek is now more searched for than ChatGPT…

What’s Next? Preparing Your Business for the AI Shake-Up

DeepSeek’s rise is more than a headline; it’s a harbinger of change. Here’s what business leaders should expect — and how they should act:

More Competition:

As barriers to entry drop, new players will emerge, offering AI solutions at competitive prices. Evaluate these newcomers carefully — they may provide cost-effective alternatives without sacrificing performance.

Policy Shifts:

The U.S. is likely to respond with stricter controls, whether through chip restrictions or AI-specific regulations. Businesses should monitor these developments and adjust their strategies accordingly.

Enterprise Adoption of New AI Models:

Companies are already testing DeepSeek-R1. If the model performs well, it could spark a shift away from dominant players like OpenAI and Google. Ensure your team evaluates these options rigorously to avoid being caught off guard.

For Senior Leaders, the Time to Act is Now

DeepSeek’s emergence underscores a critical point: the AI revolution is accelerating, and the rules are changing. For executives, this moment demands strategic clarity. Are your current AI partners prepared for what’s next? Are you exploring alternatives? Is your leadership team equipped to make informed decisions about AI adoption, governance, and risk management?

These aren’t questions for tomorrow — they’re questions for today.

Our AI Leadership Training Program is designed to help senior leaders like you navigate this ever-changing landscape. Through tailored online modules and in-person workshops, we’ll equip you with the knowledge and tools to understand the opportunities and challenges AI presents.