John Mauldin Why DeepSeek Is Bullish for the World

“There are decades when nothing happens, and weeks when decades happen,” says a quote from Vladimir Lenin, who may have copied it from someone else. 

US companies like Nvidia (NVDA) would profit from making those chips, which other US companies would buy and use to develop AI applications in vast new US data centers. 

The main worry was getting enough electricity to power it all. China, it was thought, would be hobbled for lack of the necessary chips, and thus present little competition.

DeepSeek just poked a massive hole in that happy narrative. 

When the topic involves China and technology, one of my go-to sources is Gavekal Research. 

They know how the Chinese economy works and are really good at explaining it in ways Westerners can understand.

Louis Gave knew DeepSeek was a gamechanger as soon as he saw it. He posted a report calling this Another Sputnik Moment.

Gavekal’s Beijing-based tech analyst Tilly Zhang followed up with a deeper explanation. This is a good, short summary of the hoopla, so I’ll just quote Tilly verbatim...

It is highly likely that the results cost a great deal more than $5.6 million, but even 10 times more still makes it extraordinarily cheap.

The twist you need to understand is that DeepSeek isn’t exactly better than OpenAI and other US-developed systems. 

But it seems to come close, and at a fraction of the cost.

I don’t fear competition; I welcome it.

John Mauldin 31 January 2025

https://www.mauldineconomics.com/frontlinethoughts/why-deepseek-is-bullish-for-the-world