How Deepseek Just Changed AI Forever -And Big Tech Is Powerless To Stop It
Deepseek just upended the AI world leaving share prices tumbling across the S&P500 and Trump fuming at China.
Along with many people this evening I’m staring at a stock market that is reeling from a new disruptor on the block. The big tech bros are reeling. How dare China build a model at a fraction of the cost. How dare someone challenge the US dominance.
But forget the big picture, I’m interested in what it means for everyone else.
So here are some initial thoughts as this plays out in real time….
Deepseek and the Classic Flaw of AI Business Models
Deepseek has exposed a fundamental weakness in the AI business model.
It’s a stark reminder of why we should be cautious about the hype surrounding artificial intelligence.
More importantly, there are lessons here that apply beyond the tech world—lessons we can take into our daily lives.
The AI Dilemma: A Solution Looking for a Problem
AI has often been a solution looking for a problem—or perhaps even worse, a method for reaching a solution that’s still searching for its problem. The rapid rise of AI-powered businesses has mirrored the broader stock market surge in recent years, largely driven by the big players—Google, Meta, Microsoft, and OpenAI—all racing to build the most powerful model at the lowest cost.
But this week, that business model has been shaken.
If not by Deepseek, then by the next iteration of AI that follows.
The foundation these tech giants are building on suddenly looks like shifting sands, and the stock market has taken notice.
This moment has echoes of the dot-com boom and bust—when speculative enthusiasm outpaced real, sustainable value.
The Market Reaction
Today’s stock market turmoil underscores just how fragile this AI-driven boom has become.
The Nasdaq Composite plunged more than 3%, with major tech stocks leading the decline. Nvidia faced a staggering 18% drop—one of the largest single-day losses in U.S. market history. Microsoft, Alphabet, and Meta all saw declines of around 3-4%, while the S&P 500 fell nearly 2%. Investors are waking up to the reality that AI, as a business model, is no longer a guaranteed win.
Deepseek’s True Disruption
Deepseek’s real threat isn’t about creating the best model.
It’s about creating a comparable model at a fraction of the cost.
Even if their claims are exaggerated, the message is clear: the days of AI being controlled by a handful of U.S. tech giants are numbered.
This points to a bigger shift.
Deepseek offers a glimpse into a future where AI tools are as cheap and ubiquitous as cloud storage or mobile data. The real value won’t come from who owns the models but from who finds the most creative ways to apply them.
Where the Real Value Lies
This is a pattern we see across industries.
Being clever isn’t enough; real value comes from solving problems.
In AI, the real winners won’t be the tech giants but the businesses and individuals who figure out how to integrate AI in ways that truly make a difference. When AI becomes free, it’s not the bureaucracies that will benefit—it’s the innovators.
It’s those who can develop uses for these incredible tools that will build value for real people - in the real world.
And amen to that.
Thanks for reading - see you in the comments.
Oh, and please don’t forget to hit the like button.
Have a great week,
Martin
What a coincidence about Deepseek being publicised just hours afterTrump's (un)glorious event with Ellison, Altman and Son ... 🤣🤣🤣
Chinese really have a very peculiar sense of humor ...
What's that saying about eggs in baskets and not putting all of them in one 🧺.