What's the Fuss Over DeepSeek?

DeepSeek R1 is a new open-source AI model from a Chinese company, shaking things up in a big way. If you're confused about what's happening and why NASDAQ was crashing, here's an explanation without all the technobabble. Understanding the implication of DeepSeek is important to anyone with a stake in the future, which means you.

DeepSeek says their AI is just as good as OpenAI’s ChatGPT—or maybe even better. The kicker: They built it for a fraction of the cost. While others spend $100 million or more to build an AI model or a "brain," DeepSeek pulled it off at $6 million. The news caused all the big AI stocks to tank. NVIDIA lost about $600 billion in market cap.

The wild part: U.S. tech restrictions were meant to slow China down, but they seem to have done the exact opposite. With the fancy chips unavailable, DeepSeek found clever ways to make things work with the much cheaper and slower chips they could get and flipped the script. This isn’t just a win for DeepSeek; it’s a win for innovation under pressure and it makes China look like the underdog who overcame all odds to win spectacularly.

AI on a Budget

This is what happened on the technology side. Instead of using NVIDIA’s cutting-edge H100 chips, DeepSeek trained its AI with somewhat hobbled H800 chips. These aren’t as fast or fancy, but DeepSeek found a way to squeeze incredible results. They’ve proven you don’t always need the latest and greatest hardware to build top-tier AI. For example, in a baseball game, the umpire requires that you use one hand to bat. And you don't complain or whine, and you hit it out of the park anyway. There's no other way to spin this, the 150 scientists at DeepSeek are the Bad News Bears of AI.

This changes the game for smaller players. It means countries, companies, and even creators who couldn’t afford AI before now have a shot. For example, Thailand’s film industry could use tools like this to make cutting-edge effects or automate storytelling for the Southeast Asia market—all without spending a fortune. Becoming a leader just became affordable for a lot more people.

The Walmart of AI

Here’s something deeper to consider. DeepSeek might become the Walmart of AI, bringing a low-cost-for-everyone vibe to an industry dominated by high-priced options. While OpenAI charges $60 for a million words, DeepSeek could offer the same for just 55 cents—95 percent less.

Imagine a student or an AI engineer in developing countries. The cost of ChatGPT Plus is $20 a month. In the US, this is a very reasonable fee. The typical American won't whine about price until they consider ChatGPT Pro, a subscription tier of OpenAI's ChatGPT chatbot, that gives users unlimited access to OpenAI's models and tools. This costs $200 per month. The average per capita income in Sub-Saharan Africa is about $750 per year. That's a third of a monthly salary for just the plus subscription. In US terms, this is like shelling out $1800 a month for access to ChatGPT. DeepSeek enables high-quality AI for about $1 a month. That's still pretty expensive for a college student in Africa, but DeepSeek open-sourced their model; African developers can take it and figure out ways to make it work for even less.

And just like Walmart did with retail, this could completely reshape the AI market. U.S. companies relying on high fees and big subscriptions might start feeling the heat. If DeepSeek sticks to this strategy, they’ll force everyone else to rethink how AI is priced and sold. Although it has been painful for your 401K, it's a good thing. When pricing drops dramatically, usage increases. More users engage. New markets emerge. Things happen. The cost of computing and the Internet keeps dropping, and the sky has never fallen.

A New Era for AI

DeepSeek proves that the AI game isn’t just about who spends the most. It’s about being clever, resourceful, and believing that the impossible is possible. This breakthrough will mean that AI will be more accessible than ever, opening doors for creators, small businesses, and even countries that want to build their own tech. And it's a wake-up call for America, to stop relying on its dominance to dominate the markets. It's time to lean into American exceptionalism.

And honestly, what a show. Watching these twists and turns unfold feels like the ultimate reality show drama. Nations and companies battling it out and trying to outsmart each other—it’s the kind of thing that beats even Taylor Sheridan’s wildest scripts. It's like a movie when the scrappy kid from the wrong side of the tracks overcomes all odds—beating the snotty rich kids, beating cancer, beating it all—to become the greatest high school quarterback of all time. How can you not cheer him?

Humans, as messy and brilliant as ever, never fail to surprise. Isn’t that the best part of this unfolding story?