Morning update, to add this excellent summary.
This is a classic disruption story: Incumbents optimize existing processes, while disruptors rethink the fundamental approach. DeepSeek asked “what if we just did this smarter instead of throwing more hardware at it?”
The decline is accelerating:
Nasdaq 100 futures are now down -330 POINTS since the market opened just hours ago as DeepSeek takes #1 on the App Store.
This is how you know DeepSeek has become a major threat to US large cap tech.
The stock market does not lie.
(a thread) pic.twitter.com/NLwK1oytaz
— The Kobeissi Letter (@KobeissiLetter) January 27, 2025
A DeepSeek explainer, but it’s worth surfing X searches too.
Things I took:
1. Cheap AI on lower tier gear (nvda gets repriced tomorrow)
2. It appears these new models are less power intensive. (Next gen nuke tech gets repriced tomorrow)
3. Trump admin deregulates AI (need more open source domestic competition)
4. Copper demand takes a…— Cpt. R Dubya (@Cpt_RDubya) January 26, 2025
Follow Brian Roemmele too, as he’s been working on personal AI.
Well, so much for the Mag 7.
Long live Mag6!
“What are the chances China is lying?” Yeah, good question.
DeepSeek for some.
DeepShit for others.
I’m waiting for Jagmeet Singh to introduce DeepSikh…
Just goes to show that American, even western shareholders are a skittish as a cat in a rocking chair factory.
Is this the like the “nuclear battery” China was splashing all over social media a few years ago? That turned out to be complete BS almost immediately.
Don’t talk about the 4th of June incident at Tiananmen Square … it’ll be “time to move on”
There are a few predictable potholes to watch for while using Chinese tech
The Government of Tibet …
Yawn.
Believe everything you see in media, and make me lots of money.
Sounds like corporate espionage pays off.
One of the hazards of the intellectual entanglement of people like Anthony Fauci with friends of the Biden Crime Family.
It’s time to expel all Chinese foreign nationals from Western Universities, and deport them. And about those H1-B visas…
Every now and then I need reminding why I never invest in technology stocks.
You can get filthy rich, but no one really knows what’s going to happen next and where the winners will come from. Picking those winners is an impossible task for the average Joe.
“The stock market doesn’t lie”. No, it doesn’t but it often gets it wrong. Tech stocks are wildly overpriced. Chinese AI is a good reason to take profits. NASDAQ will open 3% down. NVIDIA will open 10% down. But commodities are largely stable including copper, nickel and other critical minerals (they got crushed late last year and are already in the toilet).
I’m still on the fence with this AI. I remember playing a game called CASTLE back in university which was a prompt-based adventure game. The computer seemed intelligent at the time. Fast forward 40 years and I used ChatGPT yesterday to help write a proposal on the water shortages in Mexico. While I understand the basic problems there I didn’t have time to write my own preamble so I asked ChatGPT a series of specific questions and got some very useful answers. Cut and paste and voila, 4 well written intro pages. You have to edit the document because some sentences sound like a computer wrote them (hint: remove words like enigma and exacerbate). But is that really intelligence?
At one end the cheerleaders talk about robots going to Mars. But where I’m currently standing “you are in a large room with 2 doors. There is a sword on the floor”.
Sounds like Zork.
Disrupting markets is a good thing.
I think the point everyone is missing is that Deepseek is open source under the MIT license:
https://github.com/deepseek-ai/DeepSeek-R1
Yes, that means free for anyone to use in anyway they want.
The code is there for all to see. If it was stolen we will soon see the lawsuits.
Two very good articles describing what has happened and the repercussions.
China’s DeepSeek AI Moves the Capital of Tech from Palo Alto to Hangzhou
Mike Whitney • January 24, 2025
https://www.unz.com/mwhitney/chinas-deepseek-ai-moves-the-capital-of-tech-from-palo-alto-to-hangzhou/
China’s DeepSeek Bombshell Rocks Trump’s $500B AI Boondoggle
Mike Whitney • January 22, 2025
https://www.unz.com/mwhitney/chinas-deepseek-bombshell-rocks-trumps-500b-ai-boondoggle/
Perhaps Trump is way out of his depth on this topic and should have listened to his “First Buddy” Elon who warned against it?
So
As this technical revolution continues it accelerates on an exponential curve.
I expect we will have the first human wetware interface up and running by the fall.
Is that wetware, or is it just happy to see me?
– “It’s not magic, just incredibly clever engineering”
– “Competition increases dramatically”
Gee … where have I heard these kind of phrases before ? Hmmmm ? Oh yeah! That’s how Trump speaks. Those are Trumpisms!
I find it ironic … that the Communist Chinese are behaving LESS-Communist than Silicon Valley. Silicon Valley are MORE Communist than the worlds largest Communist State. Let me suggest that Silicon Valley AI spent wayyyyyyyy too much time ensuring their AI was anti-white and was chock full of TDS than they spent on a rational, efficient architecture. It matters not how big a pile of garbage you shovel IN … you will always get garbage OUT. It’s never been more “magic” or complicated than that.