DeepSeek Deep Sixes Western Big Tech

16-02-2025: Shockwaves were sent through Western Big Tech firms on January 27 when Nvidia saw its value drop by $600 billion, the largest single-day fall in US stock market history. The reason was the emergence of DeepSeek and its R1 AI (Artificial Intelligence) chatbot, which was developed for a paltry $6 million in comparison to the $30 billion Nvidia spent developing specialised chips for AI data processing.[1] Nvidia has produced AI models such as ChatGPT, which DeepSeek R1 outperforms. R1 uses a human-like train of thought, which talks you through its reasoning process. Unlike ChatGPT, which only presents the final answer to your query, DeepSeek R1 shows you how it is arriving at your answer.[2] Yet DeepSeek’s nearest rival is not even another Western Big Tech giant, but a Chinese one, named Qwen.[3] Within a week, DeepSeek displaced ChatGPT as the US App Store’s top app.[4]

Free and open source

What is amazing is that DeepSeek is a free and open source AI model, which anyone can use. Unlike ChatGPT, which is produced by Microsoft part owned OpenAI, it is DeepSeek that actually is open. The developers of little known DeepSeek want to provide their product at the service of humanity, in contrast to the billion-dollar Western Big Tech companies, which try to use monopolies to make their own superprofits. Meta, the parent company of Facebook, has reportedly gone into panic mode with the release of DeepSeek V3. DeepSeek V3 rendered Meta’s Llama 4 already behind in benchmarks. An anonymous Meta employee was quoted as saying that Meta’s engineers “are moving frantically to dissect DeepSeek and copy anything and everything we can from it.”[5] Western Big Tech companies are aghast at being effectively outperformed by a Chinese based firm working on a shoestring budget. DeepSeek is more than just competition, it is flipping the script on the notion that big budgets lead to better outcomes.

Almost immediately, the New York state[6] and the Australian government[7] banned DeepSeek from their devices, on the spurious grounds of “national security”. Those using Australian government issued devices were ordered to delete DeepSeek immediately. Perhaps this attempt to promptly ban technology may backfire just as spectacularly as the attempted ban on the Chinese owned Tik Tok social media app. When the US government moved to ban Tik Tok, millions of users instead jumped to download and use Xiaohongshu or “Red Note”.[8] Ironically, many Americans soon came into contact with Chinese people living in the People’s Republic of China (PRC), and discovered that almost all of the anti-China propaganda they had been bombarded with by Western corporate media was false. While many Americans are struggling with the cost of living and housing, they soon discovered that there is no cost-of-living crisis in the PRC, and up to 90% of Chinese citizens own their own home.

No contest

What is slowly being recognised internationally is that not only are PRC firms moving ahead of their Western rivals, it is not even a contest. The PRC totally dominates 37 out of 44 key technology fields in design, development and deployment. These areas include: Hypersonic missiles, advanced aircraft engines, small satellites, machine learning, natural language processing, advanced robotics, critical minerals extraction, photovoltaics, green energy and quantum sensors.[9] A European think tank admitted that the PRC is “the world’s sole manufacturing superpower”. In 2020, the PRC made up 35% of global gross manufacturing production – which is more than the US (12%), Japan (6%), Germany (4%), India (3%), South Korea (3%), Italy (2%), France (2%) and the United Kingdom combined.[10] The stupendous rise of the PRC over the last 20 years has left the West decidedly in the shade, and it is increasingly unlikely that this trend will be reversed at any time in the coming decades.

What has brought about such a situation? Hand-wringing capitalists in the West complain about the “unfair advantage” that PRC based firms have, given their substantial state backing. Others come to the conclusion that the PRC just manages capitalism better, with strategic guidance. Some in the Western left echo this trend and declare the entirety of the PRC to be “capitalist” or “state capitalist”. All of these views are mistaken. What we are faced with is in fact: Red China. The PRC had remained a workers’ state since its socialist revolution triumphed in 1949. Granted, there have been many zigzags in its climb upwards since that time. Yet today it can scarcely be denied that the PRC’s progress in the last four decades simply has not been matched by any Western capitalist power (or former power) in a whole array of fields, and it is not even close.

The backbone of the PRC’s economy, and of its state, are its State Owned Enterprises (SOEs). There are more than 150 000 of them,[11] and many of them are gigantic. In the West they are criticised for being “clunky and inefficient”, which is only true from a capitalist perspective of return on investment and the trawling in of private profits. SOEs in the PRC have a much different role, from consolidating state assets to fostering economic growth to providing employment for working people. Arguably the strongest pillar of the Chinese state are the “Big Four” banks – all of which are SOEs. In fact, all the major and strategic means of production in the PRC are state owned or majority state owned: roads, railways, ports, ship building, power, energy, mining, steel production, telecommunications and much more. The land is nationalised, the economy is organised in a Five-Year Plan, and the highest authority in the nation is the Communist Party of China (CPC). This is a very strange form of “capitalism” !

To be sure, even the vast achievements of the PRC could be extended even further if working people exercised democratic decision-making power. This is not the case, as political power is retained by the CPC, which remains hidebound within the restrictions of conservative bureaucratic rule, or Stalinism. What is required is a proletarian political revolution, which transfers power to elected workers’ councils open to all tendencies who uphold the gains of 1949. Internationally, socialistic rule in the PRC must be defended by workers everywhere, while highlighting the enormous advantages that are possible when working people and their parties hold state power. Under socialism, up to the minute technology such as AI has the potential to make workers’ lives much easier, and more enjoyable to boot.

Workers League

www.redfireonline.com

E: workersleague@protonmail.com

[1] www.san.com/cc/nvidia-sees-historic-600-billion-loss-as-chinas-deepseek-draws-attention/ (12-02-2025)

[2] www.androidauthority.com/deepseek-vs-chatgpt-3520224/ (12-02-2025)

[3] www.deepseek.com/?via=topaitools (12-02-2025)

[4] www.techcrunch.com/2025/01/27/deepseek-displaces-chatgpt-as-the-app-stores-top-app/ (12-02-2025)

[5] www.techstartups.com/2025/01/24/meta-ai-in-panic-mode-as-free-open-source-deepseek-outperforms-at-a-fraction-of-the-cost/ (12-05-2025)

[6] www.usatoday.com/story/news/2025/02/10/deepseek-ai-banned-from-ny-government-devices-networks-heres-why/78388937007/ (12-05-2025)

[7] www.sbs.com.au/news/article/chinese-ai-app-deepseek-banned-on-all-australian-government-devices/lm9udv4et (12-05-2025)

[8] www.wired.com/story/red-note-tiktok-xiaohongshu/ (12-05-2025)

[9] www.newstarget.com/2025-01-31-china-is-leading-the-world-in-critical-technologies.html (12-02-2025)