What’s the DeepSeek Buzz About? (And Why You Need to Pay Attention)

Friends,

The AI industry just got a massive shake-up, and it’s all because of a Chinese AI lab called DeepSeek. If you haven’t been paying attention, now is the time because DeepSeek’s latest model, R1, is creating a frenzy in AI, investment, and geopolitics. It’s fast, it’s efficient, it’s open-source, and it’s making the biggest AI players in the U.S. nervous.

So, what’s the deal? And what does it mean for you if you’re an investor, a business leader, or just trying to keep up with AI? Let’s break it down.

Who Is DeepSeek?

DeepSeek came out of nowhere or rather, out of a hedge fund called High Flyer Quant, founded by Chinese hedge fund manager Liang Wenfeng. Unlike OpenAI and Google DeepMind, DeepSeek hasn’t been making splashy announcements or courting Silicon Valley. Instead, they quietly built a state-of-the-art large language model (LLM) for just $6 million. For context, OpenAI is burning through billions.

DeepSeek’s stated mission is "Unravel the mystery of AGI with curiosity." Sounds philosophical, but their tech is all business.

What Did They Build?

DeepSeek is leading a shift in AI development, pushing the industry to rethink its approach. Their major projects include:

• R1 Model - A powerful large language model that rivals OpenAI's best.
• Janus Model - A multimodal AI that generates high-resolution images at a fraction of the usual cost.
• 3D Generation AI - Capable of creating 3D meshes and textures, opening up new possibilities for gaming, design, and AR/VR applications.

The key takeaway is: DeepSeek is doing more with less.

Why Is the Market Freaking Out?

DeepSeek’s rise is shaking the AI industry and raising serious questions about the future of AI dominance. Here’s why:

1. AI at a Fraction of the Cost

OpenAI, Google, and Anthropic are spending billions. DeepSeek built a model on par with OpenAI's best for $6 million. If it costs that little to make a powerful LLM, what happens to all the billion-dollar AI startups and their VC backers?

2. Disrupting Nvidia’s Dominance

DeepSeek’s models run on older Nvidia chips and even Apple M2 Ultras. This directly challenges the assumption that advanced AI requires the most expensive GPUs. Investors took notice - Nvidia’s stock plummeted as analysts started questioning the long-term demand for their most expensive chips.

3. Open Source = Faster Innovation

DeepSeek's R1 model is open-source, meaning any developer, startup, or enterprise can use it for free. This is a direct challenge to the closed, paywalled AI models from OpenAI and Google. With open-source gaining momentum, the value of proprietary AI is in question.

4. A "Sputnik Moment" for U.S. AI

Some are calling DeepSeek’s success a "Sputnik moment" for AI, similar to when the Soviet Union launched the first satellite and shook U.S. confidence in its technological leadership. If China takes the lead in open-source AI, it could reshape global power dynamics.

5. Data Privacy & Geopolitical Risks

DeepSeek’s data policies are raising alarms. Reports suggest user data may be stored in China, which brings up concerns about government access and compliance with Chinese laws. Could DeepSeek become the Huawei of AI?

Why Are AI Stocks Crashing?

DeepSeek’s emergence sent shockwaves through AI-related stocks. Here’s who’s hurting the most:

• Nvidia - Investors are rethinking the assumption that AI will always require the latest, most expensive GPUs.
• AI Startups Focused on Proprietary Models - If high-performing AI is open-source and free, why pay for a proprietary model?
• Microsoft, Google, Meta - These giants have spent billions building AI infrastructure that may now be devalued.

It’s an existential crisis for companies betting their future on closed, expensive AI models.

Winners and Losers in the DeepSeek Disruption

Winners:

• DeepSeek - They’ve gone from unknown to industry leader overnight.
• Open-Source AI Community - This validates the idea that AI development can be decentralized and collaborative.
• Startups & Developers - More access to high-quality AI without needing massive budgets.
• Companies That Use AI (Not Build It) - Businesses that rely on AI-powered tools could see lower costs and better models.

Losers:

• Nvidia - Facing a potential decline in high-end GPU demand.
• AI Startups Focused on Proprietary Models - Their business model is under threat.
• U.S. Tech Giants - Microsoft, Google, and Meta may struggle to justify their high-priced AI offerings.

Speaking of Better, Cheaper, Faster...

While we're talking about efficiency breakthroughs, I've got to tell you about Optiverse. Built by a brilliant team of AI scientists from ETH Zurich, they're basically reinventing how we handle meeting notes and transcriptions. Think Otter AI, but with superpowers:

• Integrated video recording - no more juggling multiple apps.
• Instant video clips summarizing your calls.
• Customizable summary styles with local prompts.

If you're drowning in meetings like I am, give it a try: sign up here

DeepSeek is just one part of the larger AI transformation

To help you see the bigger picture and turn AI developments into strategic advantage, I've put together those resources:

• Quickly Identify Your AI Readiness: Take the 2-Minute Quiz.
• Schedule a Free AI Leadership Transition Call: Get Clarity on Your Next Steps.
• Download Your Free AI Strategy Guide: Get Practical Insights Now.
• Stay Ahead of the AI Curve: Follow Me on LinkedIn.
• Get AI Insights: Subscribe to This Newsletter.

AI is not the future. It is the present. The best leaders are already adapting.

Stay curious!

Salama

PS: We Love Feedback This newsletter is here to help you lead in an AI-driven world, and your input makes it even better.

• What resonated with you?
• What do you want more of?
• What AI challenges are you facing right now?

Comment below or DM and let me know. Your thoughts shape future editions, and I read every response.