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Why DeepSeek Is Bullish for the World
January 31, 2025
“There are decades when nothing happens, and weeks when decades happen,” says a quote from Vladimir Lenin, who may have copied it from someone else. Regardless of origin, it is true and will be even more true as technology and even government changes faster. We may have just lived through such a week for the financial markets—and maybe for the whole global economy.
I’m talking, of course, about the Chinese-made DeepSeek artificial intelligence model, which emerged last week and seems to deliver results comparable to the far more expensive systems US companies are working on. Everyone is still debating the implications. While it may be bad news for US tech companies that have been throwing hundreds of billions of dollars at ever more expensive AI systems, it is unambiguously very good for the world.
Historical analogies nearly always fail, but here’s one that may at least rhyme: On March 14, 2000, then-President Bill Clinton and then-PM Tony Blair of the UK said research into the human genome’s sequence should be made freely available to all. Biotechnology stocks immediately plunged. Other segments held up for a while, but the great Nasdaq bull market arguably ended that day.
What was the trigger? The biotech industry of that time had planned to profit by using proprietary genetic data to make expensive drugs. The data would be the “wide moat” protecting them from competition. When Clinton and Blair signaled this might not be so easy, those stocks lost a lot of their...
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