Jan 28th 2025
DeepSeek, the small Chinese AI startup, has been all over the news lately—and for good reason.
It’s fascinating not just because they managed to knock the benchmarks off, but also because they
took a completely different approach from what we typically see. Instead of following the usual
pattern of Chinese companies merely replicating successful Western models, DeepSeek built an advanced AI
model for around just $6 million.
What’s really cool here is that while many have been doubling down on aggressive, GPU-based development
for large language models (LLMs), DeepSeek came up with a new approach that maximized limited resources.
In a way, they’ve set an example of “reverse innovation” where a solution tailored for an emerging market
ends up having a ripple effect on the global tech landscape.
Traditionally, the global tech narrative has been one-directional, with breakthrough ideas spreading out
from the major hub–SF. But DeepSeek’s strategy challenged that notion entirely. They managed to create
new value and even disrupt the US markets, erasing billions of dollars in one day.
One of the most intriguing aspects of DeepSeek is how they could reframe our understanding of
globalization. Often, we think of innovation with globalization as a horizontal process where working innovations flow
from a central source to the rest of the world. They simply showed how innovation is far more
multidimensional. When companies start building smarter, cost-effective models that are tailored
to their own market conditions, they don't just copy/participate in a global race—they can also redefine it.
I would always argue the potential of emerging markets when they have the necessary resources.
But this is an aggressive example challenging the assumption that only massive investments can yield
breakthrough technology—the SF brute force of high-budget projects. They started a trial for smaller
players around the world, showing that with the right approach, they too can also have big goals and
compete with anyone.
Further, they weren’t only an example of enabling small players, but another one of how globalization
can be a positive-sum game. When smaller companies start new approaches, they force the larger, more
established players to rethink their own. In this way, DeepSeek made a more dynamic path towards the
gains of AI development. When more minds are at work solving the same problems, the end result is
bound to be exciting and, often, unexpected abundance for all.