China’s DeepSeek may have just upended the economics of AI

Imagine we’re back in 2017 and the iPhone X was just released. It was selling $999 and Apple was crushing sales and building a wide moat around its ecosystem.

Now imagine, just days later, another company introduced a phone and platform that was equal in every way if not better and the price was just $30.

That’s what unfolded in the AI space today. China’s DeepSeek released an opensource model that works on par with OpenAI’s latest models but costs a tiny fraction to operate. Moreover, you can even download it and run it free (or the cost of your electricity) for yourself.

The product is a huge leap in terms of scaling and efficiency and may upend expectations of how much power and compute will be needed to manage the AI revolution. It also comes just hours before Trump is expected to unveil a $100 billion investment in US datacenters.

The model shows there are different ways to train foundational AI models that offer up the same results with much less cost. It also opens up far more applications for AI that would have been too expensive to run previously, which should broaden the applications in the real economy.

This article was written by Adam Button at www.forexlive.com.