Yesterday, China’s “R-1” drop, set off alarm bells in the entire western capitalist apparatus. for the first time in a while. Now, I am genuinely afraid that the US because of the silly Biden/Harris administration, is losing its dominance, its influence, its capacity to innovate, & its ability to outcompete others, on a global scale. Yet, the core issue isn’t just regulatory capture or bureaucratic inertia. The real problem is the VC industry’s managerial class, that is politically correct and represents a bloated, risk-averse, overpaid, over glorified layer, that has systematically dismantled the mechanisms that once made the United States of America, both productive & competitive. META<Facebook>meta, is a great example of this. Just look at what happened with llama, and that happened with the effing founder running it… in order to make AI hallucinate wildly, bringing forth, weird Black NAZIs from Hitler’s German historical record, or worse Google’s AI project created TransGender NAZI generals, dressed in Femme Fatale garb…
Now imagine Google where there is a professional manager running it & 5k vp’s underneath in order to produce the same “politically correct” garbage of Feminine Black German NAZIs, as a historical record of the Second World War.
Meanwhile, China’s “Wisdom Valley” is surging full speed ahead, utilizing the simple plain TRUTH with no exemptions.
And this is high stakes AI game Victory for China, because it’s not just drones, or now a world-class AI model; but it’s the entire Technological ecosystem.
Today in China, robots are building other robots at scale.
Chinese AI and all over technology is cheap, effective, & ubiquitous.
The world’s supply chain — its manufacturing core — is de facto Chinese.
China is not just catching up; it’s scaling the future. The whole world is changing and China’s ascendancy is looming large.
As you recall, Netflix ate Blockbuster for breakfast. Amazon starting with books, soon enough, decimated all of retail industries. And Uber along with Zoom, reinvented transportation, human interaction, and Consumer behaviors wholesale. Anyone called for a Taxi lately?
The disruption and reinvention of every industry is rapidly becoming the new normal.
We are reinventing Human Flight by introducing the New SuperSonic CONCORDE and the old airplane manufacturers are screaming bloody murder.
And we disrupt the world same as this week, when a small open-source player out of China called DeepSeek, disrupted all AI giants OpenAI, Meta, Google, NVIDIA, Anthropic, Microsoft, etc…
But this is just the beginning! The coming industry disruptions will accelerate fast and furiously on the heels of AI, AGI, and ultimately DSI, [digital super intelligence].
First the tech players, next healthcare, then financial services, and education will be reinvented. Get ready of the roaring 20’s. They are here.
Why is everyone up in arms about Deep-Seek?
Here’s the data:
OpenAI was founded 10 years ago, has around 4,500 employees, and has raised $6.6 billion in capital.
DeepSeek was founded less than 2 years ago, has 200 employees, and was developed for roughly $5 million.
Here’s the Disruption: While tech giants like OpenAI and Anthropic have been spending $100M+ just to train their AI models, this small 200-person team out of China built an AI system matching GPT-4’s performance for 20x less money.
How did they achieve the impossible?
Simply by pushing off the gate with three innovations that are absolutely mind-blowing:
Reimagined Precision: Instead of using computational overkill (32 decimal places), they proved 8 is enough. Result? 75% less memory needed. Sometimes the most powerful innovations come from questioning basic assumptions.
Speed Revolution: Traditional AI reads like a first-grader: “The… cat… sat…” But DeepSeek’s multi-token system processes whole phrases at once: 2x faster, 90% as accurate. When you’re processing billions of words, this is transformative.
Expert System: Instead of one massive AI trying to know everything (imagine one person being a doctor, lawyer, AND an engineer), they built a system of specialists. Traditional models? 1.8 trillion parameters active ALL THE TIME. DeepSeek? 671 billion in total, but only 37 billion active at once. It’s pure genius.
The results are staggering:
- Training costs slashed from $100M to $5M
- GPU requirements slashed from 100,000 GPUs to 2,000 GPUs
- 95% reduction in API costs
- Runs on gaming GPUs instead of specialized hardware
- They did this with a team <200 people, not thousands
But here’s what makes this truly revolutionary: It’s all open source.
Anyone can verify, build upon, and implement these innovations. This isn’t just technological progress—it’s the democratization of AI at an unprecedented scale.
I just downloaded it, in order to play with and learn its real capabilities…
Think about what this means:
- The “only-big-tech-can-play” era is OVER
- Innovation barriers have been shattered
- A few good GPUs might be all you need
- The playing field has been leveled
For incumbents like NVIDIA, this is terrifying. Their business model of selling super-expensive GPUs with 90% margins? That moat just turned into a puddle.
And DeepSeek did all this with fewer than 200 people. Meanwhile, Meta has teams whose compensation alone exceeds DeepSeek’s entire training budget… and their models aren’t even as good.
This feels like one of those moments we’ll look back on as an inflection point, like when PCs disrupted mainframes or cloud computing changed everything.
The efficiency genie is out of the bottle, and there’s no going back.
The question isn’t whether this will transform AI development—it’s what YOU will build with this democratized technology. We’re living in an era where breakthrough innovation isn’t just possible, it’s accessible.
And if West’s Tech Companies, continue down this self indulgent, politically correct, yet ultimately losing path, through short-term thinking, through managerial inefficiency, & through it’s refusal to prioritize strategic innovation — we risk becoming irrelevant in the face of a system designed for precision & long-term dominance.
This isn’t just a challenge; it’s an existential threat to western economic & technological leadership.
China’s AI open source release is the real deal, and it totally upends OpenAI’s model. Sadly ChatGPT and its cohort are all dead in the water. I know this to be true, and I can assure you that China has manifested its exemplary dominance in the AI race.
China’s DeepSeek-R1 is King and Queen of AI, both in theory and in practice.
Hail to the King…
China’s AI model, DeepSeek-R1, is noted for its efficiency, being 50 times more efficient than some American counterparts, and yet it was developed for under $3 million USD…
DeepSeek-R1 far surpasses OpenAI’s models in various benchmarks, showcasing strong performance in reasoning tasks like software engineering with a score of 49.2% on the SWE-bench Verified benchmark.
The model is open-source, allowing global access and modification, which positions China’s AI as the most significant player in the global market by enabling widespread use and innovation.
Despite US export controls limiting access to advanced AI chips, DeepSeek-R1’s development highlights China’s ability to innovate with efficient resource management, challenging the traditional computer chipsets-server side-scale up, approach to growing one’s own AI.
Chinese AI models are constantly gaining popularity and are no longer interested in keeping pace with, but only in surpassing the U.S. models.
And they have done just that, thus far, indicating a strategic focus on AI, since the last time that I was there to inaugurate the Beijing Silicon Valley — the renown Chinese “Wisdom Valley” created in the land that was the old China’s Iron Works district, where coal burning furnaces blazed 24/7, North of Beijing, that suffocated all of the City.
Now the City is clean and the air pure, so that you can least breathe-in, and stay healthy and productive as China’s Wisdom Valley youth, beats all AI of America in this Intellectual proxy war, same as they always do in ping pong, or in the Mathematics Olympiad.
Of course showing America’s much hyped AI boy-toys, that AI achievements of Deep-Seek are great in their own right and that they could lead to broader technological dominance of China all around the world — is something to put in a fortune cookie and serve it to the idiotic past administration of Biden Harris and the bunch of idiots in the various VC firms who thought that traveling down the path of oblivion ion like lemurs always do, might fix their balance sheet…
Today, we are keenly aware of the pain point, that Venture Capital companies face in trying to explain to the LPs why their money has been squandered to Sam Altman’s pyrotechnic nonsense… and all burned up in the altar of buying more chipsets from NVDIA, and more data storage cloud rooms…
Silliness has no end, but that’s another matter.
Yours,
Dr Churchill
PS:
Respect to the Deep Seek team.
Respect…
Big time…
