Did AI Just Have Its ‘Sputnik’ Moment?

Last week the Chinese app ‘DeepSeek’ rattled AI stocks to the core. And with losses in the Trillions, we wonder if this was AI’s ‘Sputnik’ Moment.

And quite possibly marks the beginning of an existential race for AI supremacy.

For those who don’t remember, the Soviet Union launched their ‘Sputnik’ rocket into space in 1957, propelling them to the top of the race for space.

Ironically (or NOT) Sputnik ignited the American drive to dominate all rivals.

And since then, our scientists have invented supercomputers that are 100 trillion times faster than the 1957 state of the art IBM 704.

Back then, Khruschev wanted to import American technology and equipment, but the US restricted such transfers.

In 1957, Soviet exports to the US were $16.8mm/yr, and imports were $4.5mm.

That’s only a fraction of what today’s politicians have stolen from money supposedly given to Ukraine.

But that was also during the Cold War.

 

And, as history constantly reminds us, everything eventually comes full circle.

However, today’s ‘Cold War’ may end with a totally different outcome.

 

For all the geek/numbers advocates out there:

 

The Australian Strategic Policy Institute published a 2024 paper covering 64 critical technologies across sectors, including defense, space, energy, artificial intelligence, robotics, cyber computing, biotechnology, advanced materials, and quantum technologies.

 

Sputnik on Steroids

 

They discovered that from 2003 to 2007, the US led the world in 60 out of 64 critical technologies.

However, from 2019 to 2023, China leads in 57 out of 64 technologies, while the US now leads in only 7.

China’s most recent gains have occurred in quantum sensors, high-performance computing, gravitational sensors, and advanced semiconductor chip making.

 

Translation:  The US now has a truly formidable competitor. It should be a terrifying prospect for lazy Americans. And a wakeup call for all exceptionalists.

As a result, we tend to believe the most exciting and high-stakes race in all human history is now well underway.

 

After all, DeepSeek was likely developed by some Red Chinese engineers who subscribed to ChatGPT and trained DeepSeek* on data scraped from ChatGPT’s responses.

 

(*Note: DeepSeek was developed at a cost – according to the Chinese – of merely $6 Million.  Compare that with ChatGPT and OpenAI costs of over $52 Billion.)

 

So, now the $64 Trillion (former Billion) question is; will Americans again rise to the moment as they did with Sputnik?

 

Unfortunately, our problem is that exceptionalists have checked out of the system.

And in their place morons have spent the last 30 years outsourcing everything and harassing everyone who actually knows something…replacing quality people with DEI hires.

Needless to say, we have our work cut out for us in order to rise above the Roaring 2020s ‘Sputnik’ moment.

Stay tuned…and look for ways to capture more upside in the AI market in our upcoming February edition of “Simplifying Wall Street…In Plain English” (HERE).

 

Share this with a friend…especially if they remember ‘Sputnik.’  They’ll thank YOU later.

 

And tell them:

 

We’re Not Just About Finance

But we use finance to give you hope.

Support always welcome via the digital tip jar.

 

*****************************************