IT Essentials: Deeply seeking certainty
Is this AI’s Sputnik moment?
My inbox has been flooded this week with comment about Chinese AI firm DeepSeek, which upset stock markets (and tech companies) by releasing an AI model trained using a fraction of the cost and power of rivals.
Seriously, I nearly drowned. This is the first time I’ve seen the sun in a week.
According to the tenets of capitalism, competition is a good thing – driving innovation and lowering prices. And, indeed, people like Mark Zuckerberg and Satya Nadella claim to welcome the competition.
Sam Altman shared a similar sentiment, but his words were slightly undermined by OpenAI, whose business model rests on using other people’s IP, accusing DeepSeek of using its IP.
Monday’s stock market wobble, which wiped more than $1 trillion off the Nasdaq, highlights the danger of years of AI hype. Together, just seven companies (Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta and Tesla) represent a third of the S&P 500’s value; Nvidia alone is worth 7%. That’s a lot of golden eggs in one basket.
It’s not exactly a single point of failure – by definition, there are another 493 companies in the S&P – but anything that affects the world’s biggest tech firms has an outsize impact on stock markets globally, and that means less money for important work like R&D.
As well as its leaner development, DeepSeek took another important step away from proprietary US models by making its tech open source, which is to be celebrated. If you’re worried about sending data back to China, you can download a copy of the entire model and run it locally.
Most people, of course, won’t do that, which is a big risk. Anything you put into DeepSeek goes back to Chinese servers – a potential GDPR breach – and might be accessible by the Chinese government. There are also accusations of bias, and clear evidence of censorship (try searching DeepSeek for anything to do with Tiananmen Square).
Is this AI's Sputnik moment? Although DeepSeek is far from perfect, it’s clear the AI race isn’t as one-sided as it looked just a month ago; now it’s down to Western tech firms to respond.
Recommended Reads
In the first of a series of articles digging into Computing’s latest state-of-the-market research, John Leonard finds UK IT leaders are “cautiously optimistic” about the future, with most budgets static or rising – though for all the hype around it, very little is going towards AI.
Taking a different view, Penny Horwood’s second article on the recruitment market is scathing about AI’s effect on the sector, with both employers and job seekers reporting 95% wasted effort.
Finally, Nic Granger, CFIO of the North Sea Transition Authority, shared her top tips for IT leaders to win budget from those holding the purse strings.