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Jeff Kagan: Will China’s DeepSeek burst US dominance in AI?

By: Equities.com

January 29, 2025 at 14:06 PM EST

Thanks to companies like Nvidia and so much innovation, it is said the United States is number one in the artificial intelligence space. If that is true, can that AI leadership last?

Understanding how new technologies and markets grow, change and impact our world, we should expect new companies and new countries to enter and battle for dominance. Especially countries like China, who have a voracious appetite for industry leadership and in fact, world dominance in new technology like AI.

AI has been around in one version or another for more decades than most realize. In the past couple years has it emerged as a real powerhouse. Ever since OpenAI with their ChatGPT and moves into AI by many leading companies like Microsoft, Google, Facebook or Meta, Apple, Tesla and in fact all the big players in the business world.

Historically speaking, the United States has been thought of as a leader in so many new technologies, including AI.

In recently decades, China sees AI as a real opportunity and has been growing quickly as well.

As far as AI leadership is concerned, the USA movement is rapid and real with powerful new technology.

At the same time China has been working hard behind the scenes to develop their own AI technology.

China just introduced DeepSeek, which is their AI chip and technology. They say their R1, which is their reasoning model, outperforms the OpenAI o1 version.

If so, this could be the reason this has caught the attention of the world. This has also created speculation about the impact on the AI industry and current AI leaders in the United States.

At this early stage, I will not weigh in on the actual technology and whether it is the same or better or worse than US tech.

My point of view is, while this is a real potential threat, today we simply do not have enough information, data or spent enough time digesting it.

So, at this stage, let’s pull the camera back and take a longer-term perspective.

One. The AI revolution is still new and is rapidly growing and changing.

Two. While the USA has led the charge into this new technology, we should not expect our leadership to continue unchallenged. Other companies and countries want in as well.

Three. Challenges and changes always happen from new versions of technology.

Four. Leadership often changes hands, time and time again as the sector matures and moves forward.

Let me share an example with you. Remember when IBM Watson was introduced to the marketplace around 2010 on the game show Jeopardy?

The next few years Watson was top of mind for scientists, investors, customers, the media, regulators, world-wide.

Then in 2016 the IBM World of Watson was an event in Las Vegas which I attended. This was when Watson was at its peak. The show was a glimpse into tomorrow. They had many partner companies and technologies, along with important speakers from government, business, medicine and technology from around the globe.

There was a brief moment in time when IBM Watson was the biggest thing in the AI world.

Then over the course of the next several years, it quickly faded away. Today, IBM is trying to reinvent the technology which is now called Watsonx.

One of the important lessons was IBM used the term Watson and not AI, so the marketplace didn’t really understand what it was.

It is important to remember, things change quickly and often. Especially in the world of fast-changing technology.

It happened in the smartphone world. Remember when the analog cellphone from Motorola led, until the digital device like the Blackberry took the lead for the next decade.

Next, the iPhone and Android took the lead sending Motorola and Blackberry to the bottom of the heap in a few short years.

There are countless examples, but the point is in the world of technology, things change and quickly.

We will have to keep our eyes on China’s new DeepSeek AI technology. Compare and contrast it to other similar technology from other companies and countries.

See if it is open or controlled. See if it is real and as fast. See if the results are what the user is looking for, or if it is edited, and so much more.

AI and other technology like Quantum are both new and could both become huge within the next few years.

Not only should we expect this kind of competition from China, but also from many other companies in many other countries.

Remember, AI has two sides, both good and bad. Just like every other kind of technology.

Want an example? Search engines, the Internet, social networks, smartphones, broadband and so much more bring us the ability to get answers instantly.

However, they also can steer opinion on the wrong direction. Plus, there are privacy concerns, and they can also create dependence like a technological drug addiction and so much more.

We need to always be aware that technology is both good and bad.

We cannot stop AI. If that is the case, we need to march intentionally forward keeping our eyes open for both growth opportunities and for the danger it can present to the human being. There is plenty of both.

The competitive marketplace is a very interesting and fast-moving place. Things are really starting to heat up once again with new technology like AI, Quantum and so much more.

So, whether DeepSeek will one-up the US version or not this time around is not the real question. The real question is as AI continues to advance, and as countless companies and countries want to be a leader in this space, what is coming next?

Whether we are investors, customers, users, workers, scientists, the media, regulators and more, we need to stay awake and keep alert for the ever-changing world of AI and of Quantum… the next big story.

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Jeff Kagan: Will China’s DeepSeek burst US dominance in AI?

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