As US ignore many of it’s best and brightest, China is stomping our tech industry with their chip and EV technology

“Last week DeepSeek launched a model that rivals OpenAI’s ChatGPT and Meta’s Llama 3.1 and was #1 on Apple’s App Store over the weekend,” Wedbush’s Ives wrote. “DeepSeek built the model using reduced capability chips from Nvidia. which is impressive and thus has caused major agita for U.S. tech stocks with massive pressure on Nasdaq this morning.”

How is DeepSeek different than other AI apps?
DeepSeek is an open-source large language model that relies on what is known as “inference-time computing,” which Sette said in layman’s terms means “they activate only the most relevant portions of their model for each query, and that saves money and computation power.”

Some experts praised DeepSeek’s performance, with noted tech investor Marc Andreessen writing on X on Jan. 24, “DeepSeek R1 is one of the most amazing and impressive breakthroughs I’ve ever seen — and as open source, a profound gift to the world.”

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David Sacks, a venture capitalist named by Mr. Trump to help oversee AI and cryptocurrency policy, said on social media Monday that DeepSee’s app “shows that the AI race will be very competitive.”

However, Ives said he’s skeptical the service will gain ground with major U.S. businesses.

“No U.S. Global 2000 is going to use a Chinese startup DeepSeek to launch their AI infrastructure and use cases,” Ives wrote. “At the end of the day there is only one chip company in the world launching autonomous, robotics, and broader AI use cases and that is Nvidia’

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Are there privacy issues with DeepSeek?
Some experts are raising concerns about the personal data that DeepSeek is collecting, given that the company stores data from users — including their date of birth, keystrokes, text or audio inputs, uploaded files, chat history and other data — on servers located in China, according to its privacy policy.

That echoes some of the issues raised with TikTok, another company with Chinese ownership that sparked worries about the supposed risks its ties to China posed to national security. Last year, Congress passed a law banning TikTok in the U.S. as long as it is under Chinese ownership, although that is now in flux after President Trump signed an executive order directing the Justice Department to not enforce the ban for 75 days.

What does DeepSeek mean for Nvidia and other tech companies?
Wall Street is trying to assess the long-term impact of a low-cost AI tool from China that rivals ChatGPT and other so-called generative AI apps. It also raises questions about whether Silicon Valley is overspending on tech advancements in the AI sector, noted Angelo Zino, senior equity analyst at CFRA Research, in an email.

“The fact that this technology is supposed to take less energy and is more cost-effective than U.S.-based models has U.S. technology investors very concerned,” Jay Woods, chief global strategist at Freedom Capital Markets, said.

It’s also unclear what type of pushback or reaction could come from the White House, given that Mr. Trump has raised the possibility of placing new tariffs on Chinese imports, although he also gave the Chinese-owned TikTok a reprieve by ordering the Justice Department not to enforce a looming ban.

Keywords: China tech industry, US innovation, chip technology, EV technology, technological competition.

#TechIndustry, #ChinaInnovation, #EVTech

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