Written by Michael Thervil
Liang Wenfeng, DeepSeek AI CEO.
Yesterday marked another win for China as China dealt another crushing blow to the American Artificial Intelligence sector. What makes China shine in this aspect is that America has tried nearly every way possible to stifle Chinese technological development and China has continued to demonstrate time after time that they cannot be stopped. This demonstrates not only the resilience of the Chinese government, but it also speaks volumes to their ability to demonstrate self-determination even in the face of another world super-power like America. The question is why has America made such attempts to block Chinese technological progress? The answer is simple: because America simply cannot compete.
Starting with America's ban on Tik-Tok, to America blocking China's access to the latest silicone chips, then there was the push to ban Chinese company Huawei. That ban also led to America banning Chinese Electric Vehicle manufactures; China has shown that not only can it do more with less, but it can outpace and outperform America when it comes to technological innovation. This brings us to the development of Chinese Artificial Intelligence. Yesterday America, tech giant NVIDIA lost a record-breaking 600 billion dollars in a single year due to the Chinese Quantitative hedge fund company High-Flyer’s advancements in Artificial Intelligence.
It should be known that High-Flyer was a heavy investor in American tech company NVIDIA. while American investors invested over $100 million to develop Artificial Intelligence apps like CHAT–GPT and OPEN AI, China only invested a mere $5.8 million and achieved astronomically better results and the kicker is this: unlike American tech firms and investors who charged consumers to use their products, China made their AI model “DeepSeek” available to everyone around the world for free.
So, when you really look at it, American tech firms and investors lost not only their investments, but they lost nearly all of their projected returns in a single day. But by making Deep Seek available for consumers around the world for free, it exposed another host of other issues that lie within America. Issues such as the dwindling brain power and the lack of American infrastructure needed for not only the development of AI, but for long term operation and sustainability for AI is being called into question. In short, what we are getting at here is that America simply doesn't have the intellectual capacity nor the ability to harness and sustain the energy supply needed to operate Artificial Intelligence at its most optimum levels in order to compete on the global stage.
Instead of seeking to rely on upgraded silicone chips from other countries and other tech giants, China utilized Nvidia's less-advanced H800 chips. In doing so, they focused on making the software more efficient and powerful. This was accomplished by reducing the amount of and/or simply cutting out what is known as “Bloat” that tends to be built into a software system. This bloat as all the apps and programs that you don't use in an operating system, that's what China threw into the trash – and it worked. In doing this China reduced both the power needed for computation and reduced their AI’s energy consumption. This makes DeepSeek’s costs roughly 40 times less than their competitors within the AI sector. This begs the question: did AI tech companies and tech investors collude in inflating the cost of building and operating Artificial Intelligence? It just may appear so.
Besides China releasing DeepSeek, they have also doubled down and released what is known as “R1” which is an AI model that is created to solve complex problems that require logic and reasoning, rather than simply spitting out an output like a standard AI model. Another thing that strengthens the reach and influence of the China Deep Seek is the fact that it’s open source. What this means is that anyone anywhere in the world will be able to contribute to it to make it better. Now suspect that the Americans will cite concerns of “national security” and therefore will seek to ban or at the very least seek to slow down the development of both DeepSeek and R1. Again, they will most likely do so because they can't compete.
High Flyer stated to Press that they:
“will concentrate its resources and strength, wholly devote itself to serve AI technology that benefits all of humanity, create a new independent research group, and explore the essence of AGI.”
The rise of High Flyer was not something that happened overnight. Instead, the rise of High Flyer started back as early as 2019/2020 with a cluster of roughly 1,100 A100 chips. High Flyer significantly increased that number to 10,000 A100 chip clusters in 2020. Could it be that High Flyer used Artificial Intelligence to help guide its decision-making process toward what the world is experiencing right now? Or did High Flyer just have the good sense to simply see where and how AI could play a vital role in the future of society? It's quite plausible.
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