What is DeepSeek R1 ?
DeepSeek R1, an open-source Chinese AI model, is shaking up the Western tech market… and questioning Silicon Valley’s closed model
It’s only been five days since its launch, but DeepSeek R1 has caused an earthquake in the markets (-6.5% NVIDIA, -3.5% Microsoft, -8% ASML) that goes beyond its technical efficiency.
The real threat to the American AI industry is in its open nature: DeepSeek is democratising technology that Silicon Valley has kept jealously guarded behind its own walls.
Why it matters. The Western AI industry has been built on two pillars that DeepSeek has just blown up:
The need for multi-million dollar investments in hardware.
The extreme secrecy about the architecture of its models.
The money trail. Wall Street is reacting harshly because DeepSeek directly threatens the dominant business model that has brought us here.
Investors are asking questions: how can projects like Stargate (and its half-trillion dollars) be justified now if there is an open and efficient alternative? What is the value of intellectual property when your competitors openly publish their progress?
Between the lines. The Chinese strategy seems clear: use open source as a Trojan horse to destabilize Western dominance in AI. It is no coincidence that DeepSeek has chosen this moment, when:
American models show signs of stagnation (where is GPT-5?).
Investments in infrastructure are skyrocketing. In 2024 they were 500% higher than in 2023.
Business models remain unclear.
The big question. Several experts have pointed out that we are facing the Sputnik moment for AI: when the United States discovered that it did not have a monopoly on progress in the space race. Is R1 of that magnitude, or should we relax expectations about its implications?
Deepseek vs ChatGPT
Perhaps we are “just” (add all the quotation marks you want) more in a Linux moment: its arrival democratized the operating system based on open source as a disruptive tool, but the industry continued to thrive. Windows did not disappear, it simply adapted to a new scenario in which open and closed source coexisted.
The difference is in the pace. Linux took years to seriously impact the market. R1 has caused an immediate shake-up even in stock market valuations of giants.
Perhaps the market understands that AI is too valuable and promising to allow such a closed and expensive development as the current one.
Whether it is a Sputnik or a Linux, R1 marks a before and after: it shows that cutting-edge AI can be created more openly and efficiently.
Yes, but. There are some persistent doubts about the real costs of DeepSeek. The CEO of Scale AI has suggested that they have access to more hardware than they say they have, but they hide it because it violates commercial restrictions.
Even so, even if its costs were higher, R1 would still have a strong impact on the industry by choosing the open model for such a powerful model.
The moment of truth. The American AI industry now has a dilemma: either maintain its current model, based on very high investments and strong secrecy, risking being displaced by Chinese efficiency… or pivot towards greater openness to compete on the board set by DeepSeek.
Go deeper. The analogy with Sputnik goes beyond technological surprise. As then, this moment can catalyze a transformation in how technology is developed and marketed. The difference is that this time the disruption does not come from the state apparatus but from the Chinese private sector, and its weapon is not the space race but open source for AI.
China, frequently criticized for its control over information, is using openness and transparency to confront Western technological dominance.
