DeepSeek has created a 21st-century Sputnik moment

Is this a Sputnik moment? The world has reacted with astonishment to the release of a disruptive AI model from Chinese company DeepSeek, which appears to be able to perform as well or, in some cases, better than ChatGPT and other cutting-edge models put out by U.S. companies. Americans had assumed their massive lead in funding, access to high-quality chips, and innovation would keep them well ahead. That assumption now looks like hubris.

The episode is in some ways a much bigger deal than Sputnik. Sputnik was about the Soviet Union’s space program competing with that of the United States. Few thought the Soviet economy in general was more technologically advanced than America’s. But DeepSeek is a private Chinese company that demonstrated its stunning prowess on the cheap in the most important technology for the future. It’s not exactly clear just how much DeepSeek’s model actually cost, to what extent it needed to use U.S. models for training, and whether there was any closet Chinese government help. But given the enormous efforts that the U.S. government has made over the last few years to preserve its advantage — chip bans, export controls, etc. — DeepSeek has made a remarkable achievement. It suggests to me two lessons and two questions.

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