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Chapter 1: Did China just launch a competitive AI model?
Well, folks, did China just drink our milkshake? China has a brand new AI model. It's called DeepSeek. And some people are comparing this technical advancement from China to Russia's Sputnik moment back in 1957 when they launched a satellite into orbit, shocking America's technological cadre. What exactly are we talking about here? Apparently, China has now released a brand new AI.
It's called DeepSeek. This is an AI that was trained on chips that are way less sophisticated than the NVIDIA chips that have been sort of the drivers of the AI revolution. So to review for just a second, for those of us who haven't been following AI very closely, artificial intelligence has progressed tremendously over the course of the last three to four years. Tremendously.
If you've been following ChatGPT, it is so good at this point at pretty much everything, and it is only one step removed from being able to do many things in the real world. So for example, if you use ChatGPT to put together a travel itinerary for any location on the globe, you can give it a prompt. It'll give you the travel itinerary.
Right now, you can't just hit book, but soon you will be able to do that. And AI is going to change how we do our jobs in so many different industries. It was assumed that America had a massive lead in the AI industry. Why? Well, because AI...
working as it does, of incredible levels of data, just reams and reams of data, has to use very sophisticated microchips typically created by NVIDIA and then produced at TSMC, which is an actual semiconductor factory over in Taiwan. And firms like Meta that have been investing billions of dollars into AI or OpenAI or Google.
All of these various companies have been pouring billions of dollars into buying these NVIDIA microchips that are designed in order to be able to process these huge quantities of data because that's how AI actually works. The way that AI works is it crunches as much data as humanly possible.
It works it through a matrix where it can actually determine which words in any given sentence are the most important. And then it predicts, essentially, this is how LLMs work, large language models. It then predicts what the next word in a sentence is going to be.
This is why you can prompt ChatGPT to write you a joke about a duck in the style of Charles Dickens, and it will do that, simply based off cramming extraordinary amounts of data. Takes huge energy, takes huge number of sophisticated microchips, or at least that's what everybody thought until a little bit earlier this week. This week, China released... an AI model called DeepSeek.
DeepSeek is apparently just as sophisticated as ChatGPT, but it cost a fraction of the cost to produce. Instead of using NVIDIA sophisticated microchips, apparently they were using less sophisticated microchips. That's the reason why NVIDIA, which had been moved up to a trillion dollar market cap, it had grown massively.
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Chapter 2: What are the implications of China's DeepSeek AI?
It was able to solve complex math, physics, and reasoning problems, I fed it, twice as fast as ChatGPT. When I asked it questions about computer programming, the types a job applicant might be faced with in a technical interview, its responses were as in-depth and speedy as its competitors'.
Now, there are some problems with DeepSeek, and this is one of the reasons why America needs to win the battle for AI. DeepSeek monitors all your data. If you use DeepSeek, it is doing the same thing that all other various Chinese companies do. It is mining your data to an extraordinary extent.
In the same way that TikTok is a Chinese PSYOP that is designed to draw enormous amounts of American data to it, the same thing is true of DeepSeek. According to their user agreement, we automatically collect certain information from you when you use the services, including internet or other network activity information, such as your IP address, unique device identifiers, and cookies.
We collect certain device and network connection information when you access the service. By the way, this includes keystrokes, It includes pretty much all data that DeepSeek also is censoring like mad. DeepSeek will not allow you to ask questions, for example, about the Tiananmen Square massacre. So what does all of this mean?
Well, according to President Trump, what this means is that it's a wake-up call to American industry. Get competitive. Get competitive now. Here's President Trump saying it's a wake-up call. He was speaking at the Congressional Institute yesterday.
The release of deep seek AI from a Chinese company should be a wake up call for our industries that we need to be laser focused on competing to win because we have the greatest scientists in the world. Even Chinese leadership told me that. They said you have the most brilliant scientists in the world. Seattle and various places. But Silicon Valley, they said there's nobody like those people.
This is very unusual when you hear a deep seek, when you hear somebody come up with something. We always have the ideas. We're always first. So I would say that's a positive. That could be very much a positive development. So instead of spending billions and billions, you'll spend less and you'll come up with hopefully the same solution.
Under the Trump administration, we're going to unleash our tech companies and we're going to dominate the future like never before.
Okay, he's right about all of that, right? When the cost goes down of actually being able to participate in this market, that means more innovation and more competition, and that's good. As the Wall Street Journal points out, DeepSeek is challenging assumptions about the computing power and spending needed for AI advances.
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Chapter 3: How does DeepSeek compare to American AI models?
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Here's President Trump announcing his tariffs on Taiwan, which, again, is a strange move since, again, Taiwan is, in fact, an American ally.
In particular, in the very near future, we're going to be placing tariffs on foreign production of computer chips, semiconductors, and pharmaceuticals to return production of these essential goods to the United States of America. They left us and they went to Taiwan, which is about 98% of the chip business, by the way. And we want them to come back.
And we don't want to give them billions of dollars like this ridiculous program that Biden has. Give everybody billions of dollars. They already have billions of dollars. They've got nothing but money, Joe. They didn't need money. They needed an incentive. And the incentive is going to be they're not going to want to pay at 25, 50, or even 100% tax.
They're going to build their factory with their own money. We don't have to give them money. They're going to come in because it's good for them to come in. They're giving them money. They don't even know what they're going to do with it. I had people tell me, we have no idea. We don't need money. They don't know, they're probably going to use the money to build in other places, other countries.
It's a ridiculous plan, very expensive and ridiculous. The only way you'll get out of this is to build your plant. If you want to stop paying the taxes or the tariffs, you have to build your plant right here in America. That's what's going to happen at record levels.
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Chapter 4: What does DeepSeek's release mean for American tech companies?
The goal, of course, was to stop, for example, the propagandizing of Black History Month in the State Department. Because again, the idea is that when you divide Americans by group and then you promote Americans by group, that is generally a bad thing. Secretary of State Marco Rubio sent cables last week to staff.
There's great talent in the department, but quote, upholding strict meritocracy is essential to securing our nation's future. And he even opened an email account, deiatruth at opm.gov, to monitor the possibility of people trying to shift DEI programs into sort of old wine into new bottles, so to speak.
Meanwhile, President Trump is making strong moves inside the DOJ and with regard to inspectors in general. Apparently, according to the Associated Press, the Justice Department said Monday it had fired more than a dozen employees who worked on criminal prosecutions of President Trump, moving rapidly to pursue retribution against lawyers involved in the investigations.
Now, let's be clear about this. Firing lawyers when you come into the presidency is a pretty well-established precedent. You don't want lawyers in the DOJ who are going to target things that you don't find to be actual law enforcement priorities. And when people say, how dare President Trump weaponize the DOJ? All I can say is the DOJ was weaponized under Joe Biden against Donald Trump directly.
The abrupt termination targeted career prosecutors who worked on Jack Smith's team, which of course makes perfect sense because if you believe that Jack Smith was a political player, then you could have simply recused yourself from engaging in those particular investigations. Nonetheless, the sort of self-righteousness of so many of the people in the federal government
Their weird belief that the world rests on their shoulders and their shoulders alone is pretty amazing. Here, for example, is one Inspector General fired by President Trump named Mark Greenblatt. He was talking about the email that he received from the Trump administration.
You were appointed by Donald Trump or named to this position by Donald Trump back in 2019. Do you have any sense of why he would put you on this list?
No, I don't know. And all that was stated was the changing priorities in that email, which I understand the other IGs who were removed, the 17 or 18 of us, were still sifting through the rubble, frankly. to find out how many IGs were removed. But as far as I know, all of us got essentially the same email that said changing priorities.
Okay, the real arrogance was shown by one inspector general named Mike Ware, who suggested, hey, we did wonders for the company. Wonders. Inspector, yes, you did wonders.
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