DeepSeek Disruption.

400 million Hindus.

“In my dreams I would have the perfect AI generated email first thing every morning with the most substantive articles of interest to me in foreign affairs, domestic policy, business, tech and media distilled with on point commentary. Oh wait! I already have it with News Items by John Ellis.” — Annie Lamont, co-founder of Oak HC/FT, a leading venture capital firm.

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1. An ongoing tuberculosis outbreak in Kansas has become the largest in recorded history in the United States. "Currently, Kansas has the largest outbreak that they've ever had in history," Ashley Goss, a deputy secretary at the Kansas Department of Health and Environment, told the Senate Public Health and Welfare Committee on Tuesday. As of Jan. 17, public health officials reported that they had documented 66 active cases and 79 latent infections in the Kansas City, Kansas, metro area since 2024. Most of the cases have been in Wyandotte County, with a handful in Johnson County. (Sources: cjonline.com, indexmundi.com)

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2. Chinese startup DeepSeek's AI Assistant today overtook rival ChatGPT to become the top-rated free application available on Apple's App Store in the United States. Powered by the DeepSeek-V3 model, which its creators say "tops the leaderboard among open-source models and rivals the most advanced closed-source models globally", the artificial intelligence application has surged in popularity among U.S. users since it was released on Jan. 10, according to app data research firm Sensor Tower. (Sources: chat.deepseek.com, reuters.com)

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3. Eurointelligence:

AI was never a proprietary technology. The underlying technology was always open-source. What made AI semi-proprietary is the fact that these models were trained on large volumes of mostly private data. A 2017 leaked memo from Google that was widely discussed in the industry at the time but also widely disbelieved by investors, said:

"An open-source LLM trained for a few million dollars is now outperforming proprietary models… we have no moat and nor does OpenAI."

The game-changer with Deepseek is that the entire business is turning open source. We already see other developers building their own models on top of Deepseek.

So the situation is not great for the providers of AI specialist services. Models like Deepseek, for example, can produce high quality translations, and will intrude on companies specializing on specialized translation services, like Germany’s Deepl.

The lack of a moat should put into question the exuberant financial valuations of the sector. Hardware companies, like Nvidia, are in a much better situation. The cheaper and more accessible the software, the more demand there will be for the hardware.

For the rest of the economy, these changes are going to be massive. AI is now coming into the reach of medium-sized and even small companies. These companies have data, on which they could train affordable models. This is where the main competitive AI race will be. And jurisdictions like the EU with a data protectionist bias will lose out in this competitive race. The debate about industrial outsourcing has been mostly focused on labour and energy costs. But for companies that compete globally, with a sufficiently long time horizon, the main strategic reason to relocate is GDPR and the EU’s AI regulation. (Source: eurointelligence.com)

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