River Allsen
Around the world, specific technology companies hold a monopoly on cutting-edge technology and control frontier developments in the software field. Companies at the forefront of Artificial intelligence (AI) development preach a narrative that AI requires massive resources to produce, however, a company in China called Deepseek quickly disproved this idea. Deepseek’s release of the R1 model, which enhances problem-solving and analytical properties of AI, shook companies such as Google and OpenAI to the core and left them bare to the scrutiny of the public.
Artificial intelligence (AI) provides vast opportunities for the growth and development of society as a whole. However, extensive technology companies monopolize nearly all developmental breakthroughs of AI such as Google and OpenAI. However, these companies find themselves threatened by the Chinese company Deepseek, which less than a month ago dropped a brand new model, R1, designed to enhance AI problem-solving and analytical capabilities. This model now poses a massive threat to the stability of the AI market and ignites the risk of an AI bid war.
“AI helps me with things my teacher may not have properly explained, it really helps clarify topics I do not understand and supports me in a lot of my classes. In regards to Deepseek, I think it is interesting because it does pose a threat to the market. It is definitely going to change the market, probably for the worse. Because other companies are going to try and beat them but it might rush things and lead to lower quality software,” freshman Matheus Correia said.
Deepseek, founded December 2023, produced an open-source R1 model January 2025. The Chinese company’s development sparked a stock market bid-off of technology stocks, with Microsoft stocks dropping by 18% and NVIDIA stocks dropping by 7%. The model fosters a crippling ability to reduce the value of other mainstream AI by highlighting the ability to easily and efficiently produce high-quality software. By developing R1 in one year, and for substantially less money yet still managing to rival popular name brand AI sites like ChatGPT, Deepseek shocks companies and developers alike.
In the aftershock, two sides of the story emerge. Outlets like National Public Radio (NPR) and Associated Press (AP) call the new model Chinese spyware and harp on the threats of the model itself. Investigating the way Deepseek utilizes user data and claiming the company as a whole directly threatens the U.S. economy and the safety of citizens. Various companies conduct studies into the safety and security of the AI’s code. GlobeNewswire provides data that claims R1 contains three times as much bias as a typical AI, and 83% of bias tests reveal severe racial and gender bias. The AI also portrays security risks, leading to its ban on U.S. military devices, and the ability to develop malware, as well as in-depth descriptions of chemical, biological, radiological and nuclear content (CBRN).
However, other companies believe the AI inspires competition among AI distributors calling the new development the starting factor for an AI Arms Race against China. The AI stocks globally decrease and companies begin racing against time and each other to cement their grasp on the global AI market. In light of a potential AI market crash, the U.S. and China alike grapple against each other for total control of the market. Losing a firm grip on such a lucrative industry may leave one of the countries in economic shambles.
The AI market in the U.S. projects $66 billion U.S. dollars to enter the circuit in 2025, creating not only rising tension among major tech companies but country economies as a whole stand at risk of collapse if Deepseek overtakes its competitors. The already risky and unstable market now faces a higher risk than ever before, with such a fragile system holding investments of upwards of 60 billion dollars, a nudge will send the market crashing and burning, taking thousands of companies with it. Due to the cheap and readily available nature of R1, other AI reduces in value daily, siphoning millions from U.S.-based companies into the Chinese AI market.
“I feel like with the way my classes are set up with so many kids to one teacher, ChatGPT and other generative AI act as sort of a personal tutor for me. With the decrease in stock and funding for it [AI] it sort of raises an eyebrow for me. With the potential risk of the quality decreasing, the relay and distribution of information will also decrease. AI already faces allegations of bad information and with a lack of funding that will just get worse,” sophomore Jasmine Kihara said.
So while the threat remains hypothetical for the time being, signs already peek through a mass of AI economic collapse, including the dropping stock rates for AI, the beginning of an AI arms race with China and the threat Deepseek poses to national security. As far as the course of action against the R1 model, only time will tell, however, the U.S. does not plan to take the threat lying down. Already, companies like Google release statements to minimize Deepseek’s accomplishments and diminish the growing fear of investors. Ultimately, 2025 stands with the potential to strengthen or burn the AI industry and take a chunk of the U.S. economy down, too.