February 11, 2025 - 4:00pm
The US and the UK have today refused to sign a declaration on “inclusive and sustainable” AI at a summit in Paris. US Vice President JD Vance stated that America was withholding its signature because of Europe’s “excessive regulation” of the technology. The British delegation refused to specify why it has withdrawn its support, but it is likely tied to a potential deal emerging between the US and the UK to prevent the former imposing tariffs on the latter.
The chaos in Paris reflects deeper disruptions across the AI landscape. A few weeks ago, a Chinese company called DeepSeek released AI technology that massively undercut American equivalents — with some analysts putting the cost of using the company’s model at around 6% the price of its US alternative. DeepSeek claimed that the new platform used significantly less computer power, which led to a sharp downturn in the stock price of Nvidia, the American company that provides the graphics processing unit (GPU) chips needed to power the technology.
Yesterday, Elon Musk made an unsolicited bid to buy OpenAI, one of the leaders in the American AI space and a company which he co-founded almost a decade ago. Musk has seemingly pinned the blame for OpenAI’s failures on current CEO and fellow co-founder Sam Altman, calling him a “swindler” on social media. Altman has led the organisation in a more commercial direction, partnering it with large firms in order to raise capital. Musk believes that the company should be more open-sourced and has suggested partnering it with Tesla. That DeepSeek is an open-source platform no doubt leads the X owner to think that his assessment has been vindicated.
What is Musk’s plan if he were to acquire OpenAI? Despite its undeniable efficiency and low cost, the entrepreneur has raised doubts about DeepSeek’s abilities, questioning whether it was really trained on a relatively small number of GPUs. The argument is that since China is restricted from buying these GPUs, its tech leaders have an incentive to mislead the public about how many they possess. Yet it is not clear whether this is the correct interpretation. Though there are some consultancy firms, such as SemiAnalysis, which make this claim, how they arrive at their estimates is less than obvious. And even if their methodology is robust, their results remain speculative.
The situation in Silicon Valley circles is one of confusion. Perhaps Musk is right, and the Chinese are hiding the real number of GPUs in their possession. But perhaps he is not, and DeepSeek really does represent a quantum leap in the training of AI platforms. If he is correct then the Chinese advance, while impressive, is not industry-destroying. If he is wrong, however, the initial hype around DeepSeek is largely justified and the entire industry may need a rethink.
This brings us back to the summit in Paris. Since the Americans are no longer clear about the realities of the AI sector, they may feel that it is unwise to bind themselves to any firm position. Over the next year or two, the impact of technologies such as DeepSeek will become more apparent — as will the structure of OpenAI and Silicon Valley’s approach to artificial intelligence more generally. At this point, it might be easier for the United States to articulate its vision. Until then, however, it seems that the new Trump administration believes the wisest move is to make no move at all.
Philip Pilkington is a macroeconomist and investment professional, and the author of The Reformation in Economics
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SubscribeWhy would the Trump government tie themselves to the socialist lunatics that run the EU states when the EU is a sinking ship with nothing to offer them.
I’ve just watched part of the speech JD Vance made to this conference. The look on the faces of the EU leaders was the very same as that which was used when Nigel Farage was speaking at the European parliament; a kind of condescending smirk.
It’s up to the electorates in Europe to wipe that smirk off their faces, just as the US electorate did with the Dems.
I think it’s Wolfgang Münchau who wrote that, by regulating AI before they’ve even managed to produce or retain any significant players in that field, the EU has built the motorway before they’ve even invented the car.
This is EU logic at its very best. I’ve lost all hope for it tbh and the Americans do right to keep well away from any sort of agreement and their options firmly open. Maximum flexibility is so much more important now than diplomatic niceties or some dumb communiqué.
At least in the area of tech I’m working with, the only things worth listening to are coming out of the States. Europe is either a pitiful follower (in the sense of “OK, this is what the US is going to do, is the EU going to prohibit it or not?”) or just out of the conversation entirely.
For one because the Europeans do play an essential role in the background. ASML is the only company in the world capable of producing the machines necessary to produce the most advanced chips, including those of Nvidia. Pushing them to the Chinese is not a very good idea.
DeepSeek’s true capabilities are likely very limited, and is likely no great innovation. It probably has a limited scope for self training, and therefore won’t have the applications other AI platforms have.
The Americans are unclear about the realities of the tech sector is very speculative line on the part of the author. I’ll defer to the many analysts who pointed out that Deep Seek is very similar to OpenAI version 1, which they trained for approx $25 million 2 years ago, and with the cost of computing & training coming done their creation is not that earth shattering. The inference used by Deep Seek alone has lead many non American tech experts to agree that was a very nice advance but does not materially alter the US AI leadership
Again a article that singularly clearly demonstrates that the West
Has it’s head full of Anti Chinese
Propaganda and what is missing from this article clearly demonstrates The Fog that clouds Western Minds and mainly brought about that 99. 99 % of Western minds completely lack the knowledge of just how the Chinese think then act
So here what’s missing from this article that if you understood China
You could so easily found by some basic research and what follows next is what you would discover
And proves that when the West views China they only see the Tip of the Colossall Ice berg that Western Civilisation is sailing full steam ahead towards
Firstly Deep Seek DID NOT spring out of nowhere
It was patently obvious they were developing something
Not only doing so but were cooperating with many leading Chinese AI experts in achieving what they have
Secondly the Deep Seek LLM model is so good because it has been built along with Nvidia chips
But more importantly a completely new Huwaei Chip which was instrumental in their success
Thirdly you not being told that China being China and that Deep Seek being free and open source
Chinese manufacturers , Public bodies / Government depts, research bodies and individuals
Are now using and deploying Deep
Seek in order to apply and develop
China’s capabilities
Millions are now doing so and the effects of such in the future shall
Explode upon the scene greatly enhancing almost every single activity only for the West to observe from hopelessly from the lifeboats
How is this so because quite simply Unity of all things is of the highest possible order to the Chinese people’s and the USA commited a serious error by way of Sanctions and Tarrifs in order to Thwart Chinese development
We in the West have and still asleep at the Helm of that rust bucket of a ship of Western Neo Liberal Capitalism firmly on course
To run into the Ice berg that awaits the impact
Abandon Ship Abandon Ship
Written by a badly malfunctioning AI!
You Buffon village Idiot and if English truly Coolie