Is DeepSeek a democracy-killer? Seven US tech firms lost more than $1 trillion on Monday as a Chinese competitor spooked investors. Some think we have entered a new global race.
Trillion dollar panic over Chinese AI
Is DeepSeek a democracy-killer? Seven US tech firms lost more than $1 trillion on Monday as a Chinese competitor spooked investors. Some think we have entered a new global race.
In October 1957, the first satellite ever was launched into space. Its name was SputnikAny of a series of earth-orbiting satellites launched by the Soviet Union beginning in 1957. - and it gave Americans the shock of their lives.
For years their leaders had told them they were the world's technological superpower, far ahead of their rivals in the USSRThe United Socialist Soviet Republic, the USA's main rival in the Cold War before it collapsed and broke up into a number of smaller states in 1991.. Instead, here was proof the Soviets had leapfrogged them.
Over the weekend Americans woke up to a similar crisis, as Chinese large language modelA type of artificial intelligence (AI) programme that uses deep learning to analyse and generate human language. DeepSeek took the world by storm - and crashed the US stock marketA series of exchanges where shares in public companies are issued, bought and sold..
The US tech sector has had a bullishAggressively confident. few weeks. Its leading light, OpenAIAn American artificial intelligence company. It says its mission is to "benefit all of humanity". , was able to secure up to $500bn in funding through the Stargate partnership, backed by Donald Trump.
Then, just days later, DeepSeek proved itself a match for OpenAI's famed ChatGPTAn Artificial Intelligence chatbot released in November 2022. . The programme's creators claim it cost less than $6m to develop and is as much as 40 times cheaper to run.1
This is largely because it uses so much less energy than its US counterparts. Data centres already consume 4.4% of all US electricity, and this is projected to reach 12% by 2028.2
That is why the US tech sector went into freefall on Monday, as investors began asking why US tech giants need all this money and energy.
It is not just Silicon ValleyA global centre of technological innovation in Northern California. It is home to many start-up and global technology companies including Apple, Facebook and Google. that is worried. The US fears China is pulling ahead in the global race to be the top technological power.
Others are more concerned about DeepSeek's programming. Multiple users have noted that when they ask it about taboo subjects in China, it refuses to answer.
They fear that as Western markets get saturated with this cheaper AI model, they will also be fed a diet of misinformation to the benefit of China.
This is not just a problem with DeepSeek. ChatGPT has previously been accused of having a liberal bias.3 Since the election, OpenAI has cosied up to Donald Trump, raising concerns it might begin to swing the other way.4
Is DeepSeek a democracy-killer?
Yes: This is an AI programme that explicitly favours the narrative of a global superpower. As it becomes more widely used it will inject disinformation into the public sphere.
No: History is full of technologies that promised to reshape society and ended up petering out. Once people figure out the limitations of LLM AI models, these models too will be consigned to the dustbin.
Or... The problem is not the software itself. It is AI developers' willingness to sacrifice everything, even liberal democracy, in the name of creating a technological god, AGI.
Sputnik - Any of a series of earth-orbiting satellites launched by the Soviet Union beginning in 1957.
USSR - The United Socialist Soviet Republic, the USA's main rival in the Cold War before it collapsed and broke up into a number of smaller states in 1991.
Large Language Model - A type of artificial intelligence (AI) programme that uses deep learning to analyse and generate human language.
Stock Market - A series of exchanges where shares in public companies are issued, bought and sold.
Bullish - Aggressively confident.
OpenAI - An American artificial intelligence company. It says its mission is to "benefit all of humanity".
ChatGPT - An Artificial Intelligence chatbot released in November 2022.
Silicon Valley - A global centre of technological innovation in Northern California. It is home to many start-up and global technology companies including Apple, Facebook and Google.
Trillion dollar panic over Chinese AI

Glossary
Sputnik - Any of a series of earth-orbiting satellites launched by the Soviet Union beginning in 1957.
USSR - The United Socialist Soviet Republic, the USA’s main rival in the Cold War before it collapsed and broke up into a number of smaller states in 1991.
Large Language Model - A type of artificial intelligence (AI) programme that uses deep learning to analyse and generate human language.
Stock Market - A series of exchanges where shares in public companies are issued, bought and sold.
Bullish - Aggressively confident.
OpenAI - An American artificial intelligence company. It says its mission is to "benefit all of humanity".
ChatGPT - An Artificial Intelligence chatbot released in November 2022.
Silicon Valley - A global centre of technological innovation in Northern California. It is home to many start-up and global technology companies including Apple, Facebook and Google.