- In today’s CEO Daily: Diane Brady on the DeepSeek fallout in Silicon Valley.
- The big story: DeepSeek or DeepFake? Doubts emerge.
- The markets: Looking up after yesterday’s horror show.
- Analyst notes from Baird, Jefferies, JP Morgan, and Wedbush express skepticism about DeepSeek’s claims.
- Plus: All the news and watercooler chat from Fortune.
Good morning. DeepSeek R1 has induced existential angst in tech circles. Venture capitalist Marc Andreessen described the release of the Chinese ChatGPT rival as America’s Sputnik moment. Why the drama? Because DeepSeek encapsulates a slew of fundamental conflicts inside the world of tech:
It’s the U.S. vs. China, complete with Chinese-style censorship, as my colleague David Meyer reports. [Sorry, TikTok, we’ll only love you if we get to own half.]
It’s closed source vs. open source. The latter gives the public access to underlying codes and weights so they can modify and use it themselves.
It’s expensive vs. cheap. DeepSeek claims it took two months and less than $6 million to build its R1 AI model. President Donald Trump called the news a wakeup call for Silicon Valley.
It’s Big Tech vs. new tech. So much for the assumption that you need to be a behemoth sitting atop a mountain of data centers, chips, and dollars to win at this game. Even Microsoft CEO Satya Nadella says he welcomes the competition, despite his stock taking a hit on the news, too.
It’s also us vs. them. Don Tapscott is working on a book about identic AI and argues “the entire model of AI needs to be redone.” He told me yesterday: “Rather than powerful corporations owning our digital future, AI should be decentralized, open, and community-owned and controlled. This vision is increasingly within reach thanks to a co-emerging foundational technology that makes decentralization possible.”
For clarity on all this, turn to Fortune AI Editor Jeremy Kahn, who argues that we should all just relax. While DeepSeek is shaking up the AI market, he argues “the prognostications of Nvidia’s doom may be premature.”
Contact CEO Daily via Diane Brady, diane.brady@fortune.com, Linkedin.
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