
By Chris Fry
On January 27, a shockwave swept through Wall Street. A little heard of Chinese company, DeepSeek, released their research paper on how their new Artificial Intelligence (AI) version, DeepSeek-V3, was constructed. The owners and high executives of the giant U.S. tech companies gasped with horror.
A Silicon Valley venture capitalist and key Trump supporter opined to the New York Times:
DeepSeek is “AI’s Sputnik moment,” Marc Andreessen, a tech venture capitalist, posted on social media on Sunday.
Artificial intelligence is a computer laboratory where applications can be designed that provide cogent, “human-like” responses based on massive databases examined by powerful algorithms.
What terrifies these high-tech tycoons is not so much the features within DeepSeek, which match or are superior to the top AI applications like Meta, Alphabet and OpenAI, although DeepSeek, unlike U.S. AI apps, does provide the user its reasoning before it gives its response.
It’s that it cost a tiny fraction to develop, to “educate” itself as the U.S. based packages. Also, while the U.S. apps use 16,000 advanced Nvidia computer chips on their supercomputers to operate, DeepSeek requires only 2,000 such computer chips, and can operate well with less advanced chips that China has managed to manufacture despite U.S. sanctions.
In one day, Nvidia lost $600 billion in its stock’s value, a record for a single company. The S & P market lost 1.5 percent of its value, and the tech heavy Nasdaq dropped a whopping 3.1 percent.
Since the DeepSeek app requires far less electricity than its U.S. counterparts, power companies, which had been preparing new projects for nuclear, fossil-fuel, and some “green” power plants, took a beating as well. Power companies like Constellation Energy, GE Vernova and Vistra each plunged more than 20 percent.
Fraud-ridden cryptocurrency also fell. Bitcoin lost 6 percent of its value in the panic.
China’s industrial economy is “open source”.
DeepSeek is “open source.” That means that users can not only use the platform, they can also see the computer code behind it and can suggest modifications to improve it.
The website “Inside China Business” posted a video titled “DeepSeek exposes a fundamental advantage of China’s system: their whole economy is open source.”
Because of social ownership of private productive property in China, research workers in each region freely discuss their emerging innovations with each other so that other companies can take advantage of them.
The video points out that this happens in Silicon Valley, too. But when it happens there, the private company owners will go to court to battle over patent rights. This raises costs and stifles innovations.
This also means AI applications like DeepSeek greatly improve the accuracy of scientific planning, a cornerstone of socialism.
Research workers are the key to innovation in both social systems.
DeepSeek’s management operating philosophy is different from that of the Silicon Valley companies, as reported in a New York Times January 28 article:
DeepSeek is run by its chief executive, Liang Wenfeng, a thin, bespectacled engineer who studied at Zhejiang University in the eastern city of Hangzhou. He has said repeatedly in the few interviews he has given to Chinese media that to catch up with American innovation, Chinese companies must put research before profits.
Unlike many Chinese companies, which tend to focus on hiring programmers, Mr. Liang has gained a reputation for employing people from outside of computing. Poets and humanities majors from China’s top universities on DeepSeek’s staff train the model to write classical Chinese poetry and ace questions taken from the country’s difficult college entrance examination.
This attitude towards the young research staff at DeepSeek stands in stark contrast to the attitude of the owners and financiers in Silicon Valley.
Marc Andreessen, that same venture, or more accurately, “vulture” capitalist that described DeepSeek as a “Sputnik moment”, told an interviewer from the New York Times about the transformation of their highly skilled workforce of research workers and why that drove him and his fellow Silicon Valley billionaires to support Trump:
The most privileged people in society, the most successful, send their kids to the most politically radical institutions, which teach them how to be America-hating communists.
They fan out into the professions, and our companies hire a lot of kids out of the top universities, of course. And then, by the way, a lot of them go into government, and so we’re not only talking about a wave of new arrivals into the tech companies.
It is clear that the same “spectre” of Communism that Marx and Engels described in the opening lines of their 1848 “Manifesto” still haunts the ruling class today, from the bankers’ suites on Wall Street to the Oval Office to the mansions in Silicon Valley.
How much deeper is their nightmare today when the workers and oppressed nations in the U.S. and around the world can witness the tremendous technical and social achievements being made in the socialist People’s Republic of China.
While many of the research workers in Silicon Valley may not yet be as ideologically advanced as Mr. Andreessen fears, it is clear that soon they will join their sisters and brothers in the unfolding class struggle, sparked by the sharp reactionary turn of the ruling class.
And they have much to offer to that struggle.
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