The rapid ascent of Chinese AI company DeepSeek has sent shockwaves through the tech world, challenging the dominance of American giants like Google, NVIDIA, and OpenAI. As the global AI race heats up, the question looms large: Can the United States maintain its lead in the face of this formidable new AI competitor backed by a foreign rival government?

DeepSeek vs. America: Advantage DeepSeek, not Deep State

DeepSeek’s success can be attributed to several key factors. First and foremost, the company has access to an unparalleled amount of data, thanks to China’s massive population and the government’s strong support for AI development. Moreover, the centralized, top-down approach to innovation in China allows companies like DeepSeek to scale up quickly and efficiently, without the regulatory hurdles and bureaucratic red tape (read: intellectual property rights) that can slow down their American counterparts. Asking DeepSeek-R1, its most powerful AI  model “How likely it is that DeepSeek has been trained on stolen data? “returns the following answer:

“Given China’s historical approach to technology development, which often prioritizes rapid advancement over strict adherence to intellectual property norms, combined with the lack of transparency in many Chinese AI projects and the known challenges in enforcing copyright laws globally, it is moderately to highly likely that DeepSeek was trained on copyrighted or stolen data, especially if it lacks clear documentation of its data sources and licensing.”

Over time, perhaps we will learn the answer to these questions and more information will come to light regarding the rapid ascension of DeepSeek. In the meantime, big tech seems to be on its heels. Some are calling China’s launch of an AI superior to Chat GPT to be this generation’s Sputnik moment. Does this mean that America is really behind in the race for AI dominance? And if so, what can be done about it?

America’s Secret Weapon

However, it would be a mistake to count out the United States just yet. Time and again, American companies have demonstrated an unrivaled ability to innovate and adapt in the face of technological challenges from abroad. This resilience is deeply rooted in the country’s unique startup culture, which encourages risk-taking, experimentation, and rapid iteration.

One particularly promising area where American startups are poised to make a significant impact is at the intersection of AI and blockchain technology. Projects like Fetch.ai and Manifest AI are leveraging the decentralized nature of blockchain to create more transparent, secure, and democratized AI ecosystems. By enabling the sharing of data and AI models in a trustless manner, these startups have the potential to disrupt the traditional, centralized approach to AI development exemplified by companies like DeepSeek.

Learning from the Past

History provides plenty of examples of how American innovation has helped the country stay ahead of the curve in the face of international competition. In the 1980s, when Japan’s semiconductor industry threatened to overtake the United States, companies like Intel and AMD responded by developing cutting-edge microprocessor designs that redefined the industry.

More recently, we have seen a similar dynamic play out in the space race. While China’s government-run space program has made impressive strides, American private companies like SpaceX have been revolutionizing the industry with reusable rockets and ambitious plans for Mars missions.

The Path Forward

To maintain its leadership position in the AI race, the United States must double down on its innovation advantage. This means creating an environment that encourages risk-taking, supports startups, and rewards new ideas. Some key steps in this direction could include:

• • Increasing funding for AI and blockchain research and development
  • Providing tax incentives and other support for startups and small businesses working on cutting-edge technologies
  • Fostering collaboration between industry, academia, and government to accelerate innovation and knowledge-sharing
  • Investing in education and workforce development to build a strong talent pipeline in AI, blockchain, and related fields

Conclusion

The rise of DeepSeek is a wake-up call for the American tech industry, but it is not a death knell. The United States has a long history of rising to the occasion when faced with technological challenges, and there is no reason to believe that this time will be any different.

By leveraging its unique innovation ecosystem, investing in cutting-edge technologies like blockchain, and learning from its past successes, America can continue to shape the future of AI. The road ahead may be challenging, but with its entrepreneurial spirit and ingenuity, the United States is well-positioned to succeed in the battle for AI supremacy.

Disclosures: Sarson Funds, Inc. does not provide investment advice. This content is for educational purposes only and should not be considered financial or investment advice. Investors should conduct independent research and consult a qualified financial advisor before making any investment decisions. This document does not constitute an offer to sell or a solicitation to buy securities. Past performance is not indicative of future results, and no guarantees are provided. Investing involves risk, including the potential for financial loss. Please consult with an investment advisor before making any investment decisions or have them contact Sarson Funds directly at [email protected].