The DeepSeek AI Freakout

The Chinese startup’s model stuns Big Tech—and Wall Street—with its capability and cost

WSJ editorial. Excerpt:

"It’s notable that DeepSeek is a startup founded by Liang Wenfeng, a Chinese hedge fund trader. Americans think of China’s economy as run top-down, and much of it is. But its growth over the last few decades, especially in tech, has been spurred by entrepreneurs. Alibaba, Tencent and ByteDance were all once startups that now rival U.S. tech giants.

This is another reason for the U.S. to avoid the trap of thinking it must imitate Chinese industrial policy to succeed in the AI race. A bipartisan Senate AI report last spring called for Congress to pass $32 billion a year in “emergency” spending for non-defense AI, supposedly to better compete with China. What a waste of money that would be.

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DeepSeek is vindicating President Trump’s decision to rescind a Biden executive order that gave government far too much control over AI. Companies developing AI models that pose a “serious risk” to national security, economic security, or public health and safety would have had to notify regulators when training their models and share the results of “red-team safety tests.”

Mr. Biden said such tests are needed to eliminate biases, limitations and errors. But open-source models allow the public to review and test systems. Some have pointed out that DeepSeek doesn’t answer questions on subjects that are politically sensitive to Beijing.

DeepSeek should also cause Republicans in Washington to rethink their antitrust obsessions with big tech. Bureaucrats aren’t capable of overseeing thousands of AI models, and more regulation would slow innovation and make it harder for U.S. companies to compete with China. As DeepSeek shows, it’s possible for a David to compete with the Goliaths. Let a thousand American AI flowers bloom."