DeepSeek’s unexpected entry into the international AI competition has raised concerns about how it may affect both nascent Bay Area firms and Silicon Valley heavyweights like Nvidia.
Olaf Groth is a UC Berkeley professor of public policy and business. He frequently uses ChatGPT to assist with lesson planning and research.
“It’s not just a light for you but also everybody that you work for or with because you get better and smarter in a very demonstrable way,” Groth told CBS Bay Area.
Groth has written a great deal about AI and the new technological revolution that is changing businesses and organizations around the world.
The market capitalization of Santa Clara-based chipmaker Nvidia dropped by about $600 billion in a single day due to DeepSeek’s abrupt rise, which was hailed as a less expensive AI substitute tool that was independent of pricey technology.
That is the reality of Silicon Valley and the worldwide AI innovation ecosystem. “They just got out competed, and speed matters,” Groth said.
The Bay Area’s AI-related businesses raised over $27 billion in 2023, compared to $14 billion in 2022, when they raised 29% of all AI funding, according to Crunchbase.
Groth thinks DeepSeek will have a favorable overall effect on Silicon Valley, AI startups in San Francisco, and other areas.
“There is an overall acceleration of innovation to be expected,” Groth stated.
“The strong will not be the only ones growing stronger. There will be a lot more competition, but there will also be a lot more creativity. Dan Ives, managing director and senior stock research analyst at Wedbush Securities, stated that more than seven tech businesses will profit from this fourth industrial revolution.
“No American company is contacting DeepSeek for AI, so it doesn’t sabotage or damage the AI revolution. “Amazon, Google, Microsoft, Nvidia, and others are involved,” Ives stated.
Nonprofits, educational institutions, and other organizations can create AI applications on a reduced budget thanks to DeepSeek’s open source strategy.
It’s a financially feasible alternative to generative AI chatbots like ChatGPT, which are provided by San Francisco-based OpenAi.
“The open source community is particularly focused on this. “You put some code out there, a foundation model that will encourage others to build on it with their own innovations and engineering,” Groth added.
Groth and other experts are hopeful that more AI businesses will emerge because of the potential for greater innovation.
“The old globalization 1.0 patterns over the last 30 to 40 years are disintegrating. Additionally, a new order is emerging, and it heavily relies on computational technology and AI data,” Groth stated.
Many people are curious about what the Bay Area and Silicon Valley will do next after DeepSeek’s entry to the AI world.
The launch of DeepSeek was dubbed a “Sputnik moment” by venture capitalist Marc Andreessen, alluding to the 1957 Soviet satellite launch that exposed a technological divide between the United States and its principal geopolitical foe.
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