In open, competitive markets, you can wreak havoc on the best laid plans if you’ve got a product that’s better and cheaper, like DeepSeek. From Charles Hugh Smith at oftwominds.com:
In summary: bloated headcounts, no new sources of revenue from AI, and limitless content with no scarcity value. Welcome to the DSD: DeepSeek Disruption.
I’ve been fruitfully engaged in a lively dialog with readers on my Substack regarding my post yesterday Is DeepSeek a Sputnik Moment? (titled Is (Chinese) Software Suddenly Eating The World? on Zero Hedge) and my conversation with Adam Taggart on his Thoughtful Money channel: SPECIAL REPORT: Did China’s DeepSeek Just Pop The AI Stock Bubble? (56 minutes).
I can’t summarize all the topics discussed on the thread, but these two comments and my responses illustrate the tremendous range of dynamics now in play in the DSD: DeepSeek Disruption. (One favor to ask: since a bunch of folks borrowed my “Sputnik Moment” phrase without crediting me yesterday, if you use DSD – DeepSeek Disruption, please credit me. Thank you.)
Although the reader comments are only visible to paid subscribers, I post my own comments as Notes on Substack, which are visible to everyone.
Comment posted by Brad M.:
“I’ve always had a hunch that there are simpler methods to achieve high performing artificial intelligence. Of course, we should note that the chips China did this on are vastly superior than anything prior to the year 2000 lets say. And China does have decades of manufacturing experience and a literal army worth of engineers to throw at the problem. So we shouldn’t say that what China did was easy. It was just easier than throwing a mountain of money at the problem. You can’t fake scarcity that easily and the Mag 7 as you call them will continue to struggle while the smaller teams given freedom to try anything with their limited resources will continue to find success.
Or that mountain of money might end up working. Who knows for sure until it happens?”
They have an army of engineers, we have an army of lawyers and Derp State derelicts.
The Land of Sun Tzu is more capitalist than we are?
Breaking from Cryptworm:
Reeking Gunk Of Abhorrence