by Brian Shilhavy, Health Impact News:
Shock waves rolled through American Big Tech companies last Sunday, as it was reported that the Chinese AI program, DeepSeek, was performing better than any U.S. AI program, for a fraction of the cost.
Meta (Facebook) was one of the first American Big Tech companies to sound the alarm last Sunday night, as reported by The Information:
TRUTH LIVES on at https://sgtreport.tv/
Meta Scrambles After Chinese AI Equals Its Own, Upending Silicon Valley
Artificial intelligence researchers at Meta Platforms have been in panic mode.
In recent days, leaders of some of the company’s AI teams openly worried that new conversational AI made by a Chinese hedge fund meant Meta was falling behind in the AI race.
Leaders including AI infrastructure director Mathew Oldham have told numerous colleagues they are concerned that the next version of Meta’s flagship AI, Llama, won’t perform as well as the Chinese AI, DeepSeek, according to two Meta employees with direct knowledge of efforts to catch up.
The Chinese fund shocked the AI industry in late December by releasing a version of DeepSeek that matched or outperformed models from Meta, OpenAI and Anthropic in completing various tasks, according to multiple interviews with six researchers at the U.S. AI companies, evaluations published by research firms, as well as anecdotal examples from customers of the DeepSeek models.
This month, Hangzhou-based High-Flyer Capital Management upped the ante by releasing another version of DeepSeek that may be on par with OpenAI’s o1 reasoning model, raising questions about whether some American AI firms have been operating inefficiently or spending too much capital for inferior results.
App developers can freely download DeepSeek or buy access to it through a cloud-based application programming interface. Some smaller app developers say they have switched to using DeepSeek because it’s so much less expensive than using OpenAI or Anthropic models.
Consumers can use DeepSeek through a chatbot mobile app that competes with OpenAI’s ChatGPT. On Sunday, the DeepSeek app had risen to second place, just behind ChatGPT, in the Apple App Store’s list of top free apps. (Full article – subscription needed.)
When the U.S. stock market opened the next morning on Monday this week, American Big Tech companies had lost over $1 TRILLION in value.
They gained back much of that this week, until today, Friday, Jan. 31st, when the market turned sharply down in afternoon trading over fears of Trump’s tariffs that are supposed to be announced tomorrow, Saturday Feb. 1st. (I will report on that story after I see what the actual tariffs will be.)
However, in an article published in the Russian media this week, it was reported that the U.S. has lost its edge over China in more than just AI models, and that the U.S. is now behind China in 57 of 64 critical technologies.
China Has Edge Over US on Much More Than AI Models
The shock release of a new Chinese AI known as DeepSeek that’s cheaper, faster and open source sent shockwaves across Silicon Valley, wiping $1 trln off tech stocks and prompting pundits to dub the development a “Sputnik moment” for the US.
But AI language models aren’t the only area where China is now comfortably in the lead.
A comprehensive, 20-year study released by the Australian Strategic Policy Institute in 2024 calculated that China dominates the US in 57 of 64 critical technologies, up from just three in 2007.
The US, which led in a whopping 60 sectors in 2007, now leads in just seven.
ASPI based its rankings on cumulative innovative and high-impact research published and patented by national universities, labs, companies and state agencies.
Where Does China Excel?
- advanced integrated circuit design and fabrication
- high-specification machining processes
- advanced aircraft engines
- drones, swarming and collaborative robots
- electric batteries
- photovoltaics
- advanced radiofrequency communication
TikTok Battle: China Won
The day before Trump’s inauguration, on January 19th, a bipartisan law passed in Congress requiring TikTok to either sell the entire company to the U.S., or be banned, went into effect.
TikTok’s parent company, ByteDance, had appealed this law all the way up to the U.S. Supreme Court, which ruled 9-0 that the law had to be upheld, just days before the law was to take effect.
The Biden Administration made it clear that they would not enforce the ban, stating that it would be futile to do so just one day before Trump took office, and that this was Trump’s problem.
This was not good enough for ByteDance, however, as it wanted assurances that the U.S. Government would not enforce the ban.
This then provided the first showdown between China and the U.S. under the new Trump 2.0 presidency.
In the end, the U.S. and Trump backed down, assuring ByteDance that Trump would issue an executive order the next day on Trump’s first day in office, but only AFTER ByteDance began the process of shutting down the app first.
Trump issued the EO the next day, over-riding U.S. law like most of his EOs, and even defying the U.S. Supreme Court decision.
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