George Magnus
On the day of Donald Trump’s presidential inauguration, a small Chinese tech company founded in only 2023, DeepSeek, shocked the AI industry, rattled US financial markets, and created a truly global stir. Notwithstanding controversies about cost and intellectual property surrounding what is still a genuine and significant accomplishment, it is fair to say that DeepSeek’s commoditisation of AI is exactly how transformational technology happens. Innovation and competition drive down costs, leading to the technology becoming embedded in the whole economy, not just the narrower, innovative parts.
These AI industry implications are centre-stage for now. It has also been argued that DeepSeek’s model represents not so much a ‘Sputnik’ moment as a case of hyperbole, and that the consequences of the AI arms race will throw up many surprises. Not the least of these is China’s persistent dependency on semiconductor technology developed by the US and its close allies, heightened by tariffs and export controls, which Trump’s administration looks set to tighten. American tech companies will want to exploit this in developing artificial general intelligence themselves.
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