According to breaking news, Chinese company DeepSeek has been able to match Western AI capabilities at a fraction of the cost. This challenges core assumptions about computing requirements as well as Western technological superiority.
DeepSeek has been able to perform comparably to leading Western AI models at approximately 1/45th of the computing cost, and has been able to do so, despite US export controls on advanced chips. The achievement demonstrates how technological advantages can suddenly be upended through innovative approaches.
The traditional Western advantage of superior computing infrastructure and companies might not be as superior as was previously assumed. DeepSeek’s breakthrough in training efficiency suggests that innovation can unexpectedly overcome resource constraints. This development could accelerate the bifurcation of global technology into competing spheres. This potential bifurcation was identified in our AI Scenarios program last spring. Companies will need to navigate increasingly complex choices about technological opportunity and adaptation.
At this time, technological advantage comes from vision, courage, speed, and execution rather than simply exclusive access to computing power. Access to talent is paramount. Suddenly, it is not self evident where exactly the Western advantage is.