Wall Street started the week in a cold sweat thanks to DeepSeek, an obscure Chinese AI lab that just unveiled a bombshell: a super-fast, budget-friendly language model that shakes Silicon Valley to its core. The Hangzhou-based company says it did it in just two months at a cost of less than $6 million, using Nvidia’s (NVDA) miniaturized chips. the stock fell more than 15 percent early Monday (Jan. 27). If this newcomer, established in mid-2023, can produce a reliable AI model that is cheaper and faster than existing applications, that is a significant contribution to US firms such as OpenAI, Anthropic and Meta (META). DeepSeek’s new AI app is already available online, including in Apple’s app store, and it’s going fast.
The timing of this could not be worse for American business, given President Donald Trump’s boldness announcement last week a new $500 billion program called Stargate AI, involving OpenAI, SoftBank (SFTBF) and Oracle, which Trump promised would ensure the “future of technology” in America, creating hundreds of thousands of jobs in the process. Has that promising idea already evaporated?
It’s too early to tell, but it’s now clear that America and China are in a fierce race to harness the power of AI for the world. Comparisons with the Cold War US-Soviet “space race” are impossible to miss, and many compare the innovation of DeepSeek to the Soviet launch of Sputnik, the first artificial satellite, in 1957, which shocked Americans when they realized that Moscow had reached space before us. he did.
Like Sputnik, the progress that DeepSeek seeks has alarming national security implications. While Wall Street worries about moderation, the Pentagon worries about Chinese advances in AI that could give the People’s Liberation Army a fighting edge. Given how high American military leaders are check it out that our increasingly open conflict with Beijing may turn into a serious fight in Trump’s second term, this is not an idle threat.
The Pentagon’s interest in AI and its implications for the military is hardly new. Five years ago, the Defense Department’s Joint Artificial Intelligence Center was extended supporting war plans, not just experimenting with new technologies. Last year, Craig Martell, the Pentagon’s top AI official, announced that the new technology is changing the way the DoD does business. As Martell he explained: “Imagine a world where military commanders can see everything they need to see to make strategic decisions … Imagine a world where those military commanders don’t get that information via PowerPoint or via e-mail from overseas. [organization] – situational awareness turnaround time is reduced from a day or two to ten minutes.”
While the venerable “fog of war” will never be completely eradicated, AI promises to cut through the fog with a speed and precision unprecedented in the history of warfare. AI will reduce the information burden on military personnel with speed and accuracy, enabling a tighter “decision loop” for American generals and allies. If the innovation of DeepSeek is sold only as it is, Beijing may have gained a decisive advantage that will enable the PLA to outthink and bypass the US military in any conflict in the Western Pacific, most likely in Taiwan.
The US Intelligence Community is similarly concerned about China’s AI progress. In recent years, America’s intelligence agencies have invested heavily in determining how to use AI to increase the speed and accuracy of intelligence investigations. AI can reduce the “firehose of information” that prevents rapid analysis of complex intelligence problems, using technology to make human evaluations faster and clearer.
last summer, Lakshmi Raman, the chief AI officer of the Central Intelligence Agency, illuminated how this works. “Think of all the news that comes in every minute of every day from all over the world. That’s also the information we’re focused on, and that we have to use AI to help us analyze it,” he explained, adding that AI improves the CIA’s intelligence gathering, not just analysis.
The National Security Agency, too, has embraced AI with enthusiasm, seeing its game-changing potential to sift through vast amounts of collected intelligence data to find pieces of the national security puzzle. The NSA also protects America from foreign AI programs, and the agency recently established the Artificial Intelligence Security Center. As NSA Director General Timothy Haugh said, “When a business uses AI systems, it opens up new areas of attack in the AI ​​development lifecycle and AI capabilities in model services. We need to secure and protect these systems from threats and buy the risk today. “
That threat from alien AI has only gotten stronger with the progress that DeepSeek is making. The good news here is that no one is sure how real China’s AI development is. Communists lie all the time. The Soviet success with Sputnik, boosted by Moscow’s putting Yuri Gagarin into space in 1961, a month before the United States did the same, proved illusory. The Soviet space program was plagued by quality and safety problems, and despite the Kremlin’s initial propaganda efforts, America won the space race with the 1969 Moon landing. The bad news is that the clock is ticking.
John R. Schindler worked with the National Security Agency as a senior intelligence analyst and intelligence officer.
