It was just last week that the kings of the U.S. Artificial Intelligence (AI) industry, the leaders in the world, gathered in a press conference with President Trump to talk about astonishing budgetary numbers (half a trillion!) and massive industrial transformation.
They were: Larry Ellison, the executive chairman of Oracle, Masayoshi Son, the CEO of SoftBank, and Sam Altman, the CEO of OpenAI, all rallying around the expensive miracle chip from Nvidia, the stock price of which reflects the investment mania now fueling the industry.
The project they were pitching was called Stargate, and Ellison made a quick for-the-internet speech about it. In the course of a two-minute soundbite, he somehow combined AI, mRNA, and a cancer cure in one big stew of far-flung promises. That speech rattled many close observers who wondered whether the new president was really going to buy what these people were selling.
Elon Musk, who has a personal and public feud with Sam Altman, quickly took to X and said that these companies are nowhere near creditworthy enough to raise this kind of money. One presumes that this helped undermine Stargate with the new Trump administration but there was not enough information forthcoming to know either way.
Then a strange thing happened. A Chinese company called DeepSeek, seemingly out of nowhere, had released an app (the day before the meeting) directly into the mainline stores—within a week it became the number one download for large language models. The company produced all its documentation and made the whole of its code open source.
The efficiencies relative to the status quo are mind-blowing. They did for less than a tenth of the resources that OpenAI has spent and plans to spend, and did so in a fraction of the time, in a way that requires not acres of data centers but simple laptops.
The code is open for all to see and includes a number of simplifications. It uses database calls far more efficiently for the same results. It deploys chips that are older and evade U.S. bans on chip exports, which seemingly makes the point that an industrial policy by the United States to bolster its leadership in this field is easily circumvented.
