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Q4 2024: What Can We Learn From The DeepSeek AI “Shock”?

Writer: Monmouth CapitalMonmouth Capital

As we hurtle with eyelids clamped open into the dystopian multiverse dreamed into being by emotionally stunted teenagers cosplaying adult men, a sideways glance, a shock; a look to the East.

 

Let me take you back to last summer’s glorious Olympic Games in Paris.

 

A Chinese swimmer, Pan Zhenle, smashed the world record in the 50 metre freestyle event.

There was immediate condemnation of him and Chinese swimming as cheats. Britain’s Adam Peaty, who lost to Pan in a relay, said, “There’s no point in winning if you’re not winning fair… [if] you know you’re cheating, you’re not winning, right?”

 

Peaty is extraordinary, one of the greatest of all time. He has set unbelievable world records in his event: to this day, a whole second quicker than anyone else in history. Instead of accusations of cheating, we know everything about his life, his preparation, his superhuman training regime, his mentality, such as in a fascinating interview in the Financial Times in 2021.

 

We know all the wholesome reasons he became so good. Just as we do for the other Western stars of Paris 2024 who produced staggering performances such as Sydney McLaughlin-Lavrone and Quincy Hall.

 

Can anyone tell me about Pan Zhenle’s background? His early struggles? His unique training methods? His family? His dedication? His innovative technique?

 

Of course not. He’s a faceless or maybe rather featureless symbol of the demonic other, the looming threat, the unknown, the inscrutable enemy against whom we must always be on guard and must always suspect of foul play.

 

That’s why the Western business community was shocked this week when a Chinese company, DeepSeek, released its own version of ChatGPT that seemed to do pretty much the same job but with two critical differences:

 

1.       It was open source, meaning anybody could inspect, adapt and use the code.

2.       It cost a fraction of what it has taken to train similar models.

 

It was a shock because we are so busy wondering if China is using 5G, TikTok or students to spy on us, we ignore a vast country of a billion people and what they might be thinking, saying and doing – as fellow human beings.

It was a shock because we don’t talk to them. As often as not, particularly from American sources, the Chinese are flatly referred to as “our enemies”. From the mouths of otherwise rational, commercially-minded businesspeople.

 

I’m not an apologist for China, or any other country, including  my own. But we’ve got a problem and this week’s “shock” demonstrates the cost of not dealing with it: $1 trillion of market cap wiped out in a day.

 

Consider that the cost of groupthink; of a failure to welcome in perspectives from people different to ourselves.

 

I am not immune. It’s impossible not to be swept up by the forces and exuberance of the day. Trying to mitigate this in our decision-making is a constant preoccupation.

 

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