Tech Diplomacy Now: The DeepSeek Freak Out
On Monday, the wider public, and more importantly Wall Street, became aware of a development out of China that has been bubbling for weeks.
TABLE OF CONTENTS
Tech Diplomacy Updates
Top News of the Week
Latest News
Technology Strategy and Policy
Artificial Intelligence
Telecommunications Networks and Infrastructure
Critical Minerals
Synthetic Biology
Quantum
Advanced Aerospace Technology
Semiconductors and Microelectronics
Energy and Climate
Opinion and Commentary
The Last Word
Michelle Giuda Discusses the DeepSeek AI News on Bloomberg's Balance of Power
Krach Institute CEO Michelle Giuda joined Kailey Leinz and Joe Mathieu of Bloomberg TV to talk about the implications of China’s new AI application on American leadership. She said “even if miracles happened” and everything DeepSeek self-reports is true, “which would be highly contrary to the Chinese playbook,” this should be a catalyst for America to launch its “next 10 Stargates” and double-down on innovation to stay the world’s AI capital. Giuda added that the U.S. also needs to graduate more engineers. She cited the model developed by Purdue University, which graduates more engineers than any other top university in the country and has developed the 21st-century playbook for engineering excellence—at scale.
Top News of the Week – DeepSeek R1: Queue the Freak Out
A relatively unknown Chinese AI firm released a new distilled model this week that sent shockwaves across the AI community and caused a significant drop in the valuations of firms like Nvidia and OpenAI. This revelation comes on the heels of an announcement by the Trump Administration of Project Stargate, a $500 billion investment in AI infrastructure.
Key Points:
The DeepSeek R1 model is an evolutionary change, not a revolutionary one, though it will likely cause a significant change in how AI companies approach the commercial viability of Artificial Intelligence by driving a wider adoption given the lower costs.
DeepSeek demonstrated how all AI model makers can make their models much more efficient at much lower cost, and since this was done with open-source software and they published their roadmap for doing it, presumably anyone else can copy these improvements.
The consequence of this more efficient and cost-effective model is that it calls into question the enormous investments being made in AI infrastructure to build data centers and open new nuclear power plants to run them.
If AI models can be nearly as effective for much less cost and much less compute, then that overturns many of the assumptions about how AI will develop and spread. Probably better to find this out now before the United States makes enormous and potentially unnecessary investments.
One of the impacts will likely be increased pressure by companies like Nvidia to dismantle export controls on advanced semiconductors as U.S. firms become less interested in purchasing every chip Nvidia manufactures, and the company looks to expand its client base to China.
This will likely amplify the efforts by both China and companies like Nvidia to dismantle U.S. export controls as some assert that the DeepSeek R1 model “proves” export controls don’t work.
More on Background:
Nvidia loses $589 billion in market cap — broad stock plunge triggered by DeepSeek AI release – Tom’s Hardware, January 28, 2025
DeepSeek’s Rise: How a Chinese Start-Up Went from Stock Trader to A.I. Star – NYTs, January 28, 2025
Former Intel CEO Pat Gelsinger is already using DeepSeek instead of OpenAI at his startup, Gloo – TechCrunch, January 27, 2025
VIDEO – DeepSeek R1 Explained by a Retired Microsoft Engineer – Dave’s Garage, January 27, 2025
DeepSeek's 'Sputnik moment' prompts investors to sell big AI players – Reuters, January 27, 2025
How Chinese company DeepSeek released a top AI reasoning model despite US sanctions – MIT Technology Review, January 24, 2025
Meta to spend up to $65 billion this year to power AI goals, Zuckerberg says – Reuters, January 24, 2025
X POST – Everyone is way overindexing on the $5.5m final training run number from DeepSeek. GPU capex probably $1BN+; Running costs are probably $X00M+/year; ~150 top-tier authors on the v3 technical paper, $50m+/year; They're not some ragtag outfit, this was a h– Nabeel S. Qureshi, January 24, 2025
A free, powerful Chinese AI model just dropped — but don’t ask it about Tiananmen Square – Sherwood, January 23, 2025
China poised to expand AI infrastructure to keep pace with US Stargate project – SCMP, January 23, 2025
Tech Leaders Pledge Up to $500 Billion in AI Investment in U.S. – WSJ, January 21, 2025
Alphabet CIO Porat Warns US Lead Over China on AI Not Guaranteed – Bloomberg, January 21, 2025
Joe Biden signs executive order to speed AI data center construction – The Verge, January 14, 2025
DIVE DEEPER: Visit the Tech Diplomacy Academy to understand the fundamentals of AI and the ethical and policy concerns surrounding this technology.
Latest News
Protesters Attack Embassies in Congo Amid Fury Over Rebel Violence – NYTs, January 28, 2025
Undersea cable cut in Baltic Sea – Semafor, January 27, 2025
Ships, sea drones and AI: How NATO is hardening its defense of critical Baltic undersea cables – CNN, January 27, 2025
Sweden launches sabotage probe after another data cable damaged in Baltic Sea – France 24, January 26, 2025
Canadian Defence minister accelerates 2% NATO spending timeline to 2027 amid pressure from Trump – CBC, January 24, 2025
Syria’s new government ends Russian lease of Tartous port: What we know – Al Monitor, January 22, 2025
Intel spins off its corporate venture arm, Intel Capital, into a standalone fund – TechCrunch, January 14, 2025
Technology Strategy and Policy
Tech’s TikTok Dilemma: Follow the Law or President Trump? – NYTs, January 24, 2025
Trump Blasts EU Regulators for Targeting Apple, Google, Meta – Bloomberg, January 23, 2025
China's overlapping tech-industrial ecosystems – High Capacity, January 22, 2025
‘We’ve impeded China’: departing official defends US export controls – FT, January 19, 2025
What Jake Sullivan wants the Trump administration to know about the defense industrial base – Defense Scoop, January 15, 2025
Artificial Intelligence
Executive Order Removing Barriers to American Leadership in Artificial Intelligence – Trump Administration, January 23, 2025
OpenAI launches Operator—an agent that can use a computer for you – MIT Technology Review, January 23, 2025
Tencent ramps up global AI efforts with roll-out of advanced Hunyuan 3D-generation system – SCMP, January 22, 2025
Musk Pours Cold Water on Trump-Backed Stargate AI Project – WSJ, January 22, 2025
ByteDance launches AI code editor based on Microsoft software as TikTok ban is delayed – SCMP, January 21, 2025
Broadcom chief eyes AI opportunity after confronting VMware backlash – FT, January 19, 2025
Executive Order on Advancing United States Leadership in Artificial Intelligence Infrastructure – Biden Administration, January 14, 2025
Biden Toughens China Curbs with AI Order, Smart Car Tech Ban – Bloomberg, January 14, 2025
Telecommunications Networks and Infrastructure
Polestar seeks new suppliers after US ban on Chinese software in electric vehicles – FT, January 25, 2025
White House in talks to have Oracle and U.S. investors take over TikTok – NPR, January 25, 2025
Subaru Security Flaws Exposed Its System for Tracking Millions of Cars – Wired, January 23, 2025
China and Indonesia Team Up on Cross-Border Digital Payments – Caixin Global, January 22, 2025
US Commerce Department Finalizes Rule on Connected Vehicles with Supply Chain Links to China and Russia – Mayer Brown, January 21, 2025
Trump signs executive order to pause TikTok ban, provide immunity to tech firms – NPR, January 20, 2025
Chinese tech firm founded by Huawei veterans in the FBI's crosshairs – Reuters, January 16, 2025
Critical Minerals
The New Weapon Against China’s Mineral Dominance: Plants – WSJ, January 25, 2025
Beijing’s Ban on Mineral Exports to U.S. Leaves Traders Scrambling – Caixin Global, January 24, 2025
Export-Import Bank of the United States Board of Directors Approves Supply Chain Resiliency Initiative to Protect U.S. Jobs and Shift Critical Mineral Supply Chains Back to the United States and Away from the People’s Republic of China – EXIM Bank, January 8, 2025
Synthetic Biology
Sam Altman-backed Retro Biosciences to raise $1bn for project to extend human life – FT, January 25, 2025
Controls on Certain Laboratory Equipment and Related Technology to Address Dual Use
Concerns about Biotechnology – Federal Register, January 16, 2025
Biotech Battlefield: Weaponizing Innovation in the Age of Genomics – FDD, January 15, 2025
Biopower: Securing American Leadership in Biotechnology – CNAS, January 15, 2025
Journal retracts Thermo Fisher Scientific study after ethical concerns – C&EN, January 2, 2025
Quantum
Quantum Computing, Rigetti, and D-Wave Stocks Slide as DeepSeek Triggers Selloff – Barron’s, January 27, 2025
Quantum Computing Might Be the Biggest AI Trend of 2025, and This Stock Could Benefit – The Motley Fool, January 27, 2025
World’s first scalable, networked photonic quantum computer prototype unveiled – Interesting Engineering, January 26, 2025
The Race to Lead the Quantum Future: How the Next Computing Revolution Will Transform the Global Economy and Upend National Security – Foreign Affairs, January 7, 2025
Advanced Aerospace Technology
Executive Order: The Iron Dome for America – Trump Administration, January 27, 2025
How China pushes to fly home-grown COMAC jets overseas – Reuters, January 20, 2025
Drone Makers Looking to Steer Clear of China Fear Beijing’s Wrath – WSJ, January 19, 2025
Defense spending propels government space budgets to new heights – SpaceNews, January 15, 2025
China’s Top Drone Maker Removes Security Features at a Very Weird Time – Foreign Policy, January 15, 2025
The Pentagon’s ‘Replicator’ drone bonanza faces an uncertain future – Defense News, January 14, 2025
Semiconductors and Microelectronics
Top Chinese memory chip maker YMTC makes another design breakthrough, defying US sanctions – SCMP, January 27, 2025
Huawei's chip and display suppliers accelerate China's AI push – Nikkei Asia, January 24, 2025
China foundry Hua Hong taps ex-Intel exec to lead logic chip pivot – Nikkei Asia, January 22, 2025
Huawei seeks to grab market share in AI chips from Nvidia in China – FT, January 21, 2025
China makes inroads in DRAM chips in challenge to Samsung and Micron – Nikkei Asia, January 15, 2025
Energy and Climate
China’s Surging Power Demand Creates a Climate Conundrum – Bloomberg, January 26, 2025
China’s EV Makers Have a Good Reason to Delay Paying Bills – Bloomberg, January 21, 2025
China’s ‘artificial sun’ sets nuclear fusion record, runs 1,006 seconds at 180 million°F – Interesting Engineering, January 21, 2025
Opinion and Commentary
DeepSeek Is a Wake-Up Call. Is America Listening? – Geoffrey Cain, January 27, 2025
Useful Quantum Computing is inevitable – and increasingly imminent – Peter Barrett, MIT Technology Review, January 27, 2025
DeepSeek and the Strategic Limits of U.S. Sanctions – Lizzi C. Lee, The Wire China, January 26, 2025
AI Videos from China Are Coming for the World – Catherine Thorbecke, Bloomberg, January 23, 2025
America Has a National Security Strategy. Where Is Its National Competitiveness Strategy? – Robert Atkinson, ITIF, January 21, 2025
Trump Gives TikTok an Illegal Amnesty – Editorial Board, WSJ, January 21, 2025
There can be no winners in a US-China AI arms race – Alvin Wang Graylin and Paul Triolo, MIT Technology Review, January 21, 2025
Russia’s Cable-Cutting Could Threaten Europe’s Whole Energy Supply – Elisabeth Braw, Foreign Policy, January 3, 2025
DeepSeek is a modern Sputnik moment for West – Justin Bassi and David Wroe, The Strategist, January 29, 2025
The Last Word
“The real game-changer isn't just open-source model access or computational cost reduction—it's their combined force. Beyond the short-term market turbulence we've witnessed, this will ignite a new wave of innovation and push established U.S. players into strategic pivots. In that sense, this is undeniably an inflection point. Buckle up—this ride just got a whole lot more interesting.”
- Vijay Raghunathan, Vice President of Global Partnerships and Programs, Director of Semiconductor Education, Purdue University
About: Tech Diplomacy Now
The Krach Institute for Tech Diplomacy at Purdue is the world’s preeminent trusted technology accelerator. As the leader of the new category of Tech Diplomacy, the Institute integrates technology expertise, Silicon Valley strategies, and foreign policy tools to build the Global Trusted Tech Network of governments, companies, organizations and individuals to accelerate the innovation and adoption of trusted technology and ensure technology advances freedom.