The advent of DeepSeek is an event of considerable magnitude.
Not simply because the Chinese firm has made a simpler, cheaper but equally effective product than its American competitors. This above all reflects the questioning of the American industrial strategy of isolating China.

Tech companies in the United States have been favored by investors for many months. They have been innovative, thus giving themselves the opportunity to collectively accumulate an income. The translation of this advantage is their explosive valuation. The world of tomorrow being anticipated to depend even more than today on technology, investors want to take advantage of it with portfolios built around this field.

This valuation has been accentuated by the US government’s push to ease restrictions on technology transfers in China. In the past, the Middle Kingdom has benefited from these transfers but has also invested massively in research and education in order to be competitive.
With DeepSeek, we see that the strategy led by Washington is not sufficient to maintain the American lead, and perhaps it is not the right maneuver to keep China in second division. The drop in valuations reflects this.

The combination of tech giants and Washington’s aggressive strategy has failed to keep China at bay.
If the DeepSeek model is less sophisticated in its construction, without an Nvidia chip, cheaper than ChatGPT but just as efficient, we will see a battle to exclude the newcomer from the very profitable AI game. This is a legitimate strategy when a competitor enters the arena with more attractive features. The consumer will benefit with lower prices.
Unless the US government takes safeguard measures to defend Silicon Valley Tech.

On an international scale, the important thing is to know who will define the standard technology, the one that will be used without thinking about it. The Americans have benefited from this advantage for decades, thus creating considerable revenue streams for the American economy. If with a technology made with 3 pieces of string the Chinese are able to do as well and cheaper, they have a spectacular comparative advantage and considerable room for maneuver to be able to define this famous technological standard.

This battle over the standard has caused tensions over the Pacific for several years. The cards are now being reshuffled because the hierarchy for the next 10 years is becoming more blurred. Companies will show ingenuity with sometimes surprising alliances. On the government side, anything goes.
AI is a tool of domination and therefore woe to the vanquished.