Is China's DeepSeek the equivalent of the Soviet Sputnik of the last century?

By: Ricardo Israel - 02/02/2025

On October 4, 1957, the Soviet Union launched Sputnik 1, the first artificial satellite in history, into space, inaugurating the so-called space race. In the United States, it was like an earthquake, a true paranoia surrounding Soviet capabilities, which increased as, in the following years, successes accumulated with the first sentient being, the dog Laika, in space to be followed by the first astronaut (cosmonaut for the Soviets) Yuri Gagarin on April 12, 1961. In fact, the entire first stage of this space race is marked by this predominance, which only disappeared when enormous amounts of money, the creation of NASA and the fulfillment of the goal of reaching the moon first, marked the triumph of the United States in that decade of the 60s, which was enjoyed because of how difficult it was.

This was the first thing that came to my mind when I heard the name of the Chinese company DeepSeek in Artificial Intelligence (AI) for the first time a few days ago. However, it was far from being something original, since the analogy was also used by people who had more and better information than me.

The earthquake was also felt on the stock market, as the impact was such that, to cite just one example, the share price of Nvidia, a major producer of advanced chips, lost around US$600 billion. Such a loss in a single day had never been seen in the history of the United States. Until that Monday, few knew the name of this company, outside the stock market and technological circles.

Even the biggest ones like Meta were scared, the stock market shook on Monday, January 27, 2025, and there were also losses in Europe and Japan. The biggest scare was how and why a Chinese startup was capable of causing such a situation.

Was the impact only commercial or did it also mark a technological before and after? A week later, there is no unanimity that it was so when it came to AI, but the panic was caused not only by the announcement of a product much cheaper than its rivals, but also by an undisputed advance, since that company managed to match the capacity promised by AI with only a fraction of the chips or semiconductors that the main companies had been using. In other words, there was a Sputnik moment in the reaction of the AI giants and Washington.

There was no doubt about its future commercial impact, as DeepSeek managed to deliver powerful AI for much less money than any of its competitors, with achievements that many experts did not yet believe possible, creating all kinds of doubts about the competitiveness of American companies, considering that one of the few things that both Trump and Biden seemed to agree on was to become much more efficient than the Chinese in this field, since behind this competition, as in the case of Sputnik, there was a larger one, that of the US and China to be the superpower of this 21st century, a competition that in turn will define the geopolitical scepter of the era in which we live.

In that sense, both the Biden and Trump governments had announced large amounts of money to be invested to ensure US dominance in semiconductors and AI, to be followed by other amounts as significant as what the space race cost in the last century. There is talk of their own money and that of others, such as, for example, the $500 billion dollars that Trump had announced a few days before, including money from the Japanese and Arabs. Therefore, the impact achieved by DeepSeek did not fail to impress, since in just a couple of days, the discourse changed completely, from being the best in the world to a self-flagellating discourse of being worth much less than the previous week, the most worrying being the doubts that arose around American leadership and dominance.

Not even 48 hours had passed when politicians, journalists and businessmen were calling for a kind of Manhattan project, alluding to how the US, under Oppenheimer's leadership, managed to drop the atomic bomb before Germany. In fact, President Trump himself spoke of the need to wake up the US, just as the country was surprised when the CV-19 pandemic showed the world how deep China's dominance was in the production of medicines (but not in basic science), being the world's factory.

In any case, a week after the appearance of DeepSeek, in the US there is less flagellation and a more sober assessment around technology, with a discourse in which the idea predominates that one must never be absolutely calm, in a field that will continue to provide surprises, and what is needed is to have clarity around priorities, that is, exactly what allowed us to win both the Cold War and the race to the moon on the distant 20th of July 1969.

Introspection has also moved into other areas, with an emphasis on aggressive and proactive countermeasures to protect the technology, which means protecting against espionage, as well as numerous lawsuits against the US company OpenAI itself, where it is accused of using data protected by copyright.

The truth is that history shows us that when a new technology appears, there are always fears about its use and misuse. In this case, it is about the dictatorial nature of the Chinese government, the control it has over companies in that country, and, above all, fears related to its ruling force, that is, the Communist Party. In this sense, one of the greatest and most effective criticisms that DeepSeek has received and that makes it less reliable is the prior censorship that it has built in, since it is difficult to trust an AI that cannot answer truthfully to the question about what happened in Tiananmen Square.

Does this mean that rather than a situation similar to the Soviet Sputnik, perhaps this success would only be the beginning of a process of distrust similar to that affecting another technologically innovative and also commercially successful company, such as Tik-Tok?

Beyond the current situation, something similar has happened many times in history, but (almost always) the technological advance is quickly imposed, either by the authors of the innovation or by the action of imitators, and sometimes, later on, it is recognized that the fears had been unfounded or exaggerated. It happens, but not always.

The root of the problem is that once knowledge is made public in a society, it is very difficult for it to disappear, which is true of nuclear energy and will also be true of Artificial Intelligence.

In this regard, as an element of study we also have in mind what happened with Japan, which after the disappearance of the USSR was seen as a major rival. Furthermore, when the massive emergence of computing and the Internet took place in the 90s, it was expected that its capacity for innovation, which, without investing large amounts in basic science, found new uses for the contributions of others, would transform it into the ideal country to sweep these new technologies, just as it had done in electronics. However, it was not Japan but the USA that triumphed, dominating these fields to this day, and, on the contrary, Japan entered an economic lethargy that still lasts, since instead of running like a hare it continues to run like a tortoise.

China's economic power, for its part, makes it a very different rival for the US than the former USSR was. That is, it is a competitor at all levels, which must be defeated in the economic battle before it can be defeated in the geopolitical rivalry, a situation in which Trump was right before his political rivals, that the dollar is a very important factor in the current strength of the US, so it must be protected at all costs.

It is not certain that the tariff issue will prevent China from fighting back, just as economic sanctions that failed with Russia are unlikely to succeed with China, which also has a lead in so-called “rare earths,” that is, the collection of minerals that are critical for the production of computers, cell phones and, of course, the technological advances that are announced for the future.

It is in this sector that the US could do something important right away, not only in terms of production or technology, but also in terms of fulfilling its role as a superpower. Thus, in the face of the indifference of the mainstream press, I am surprised at how little importance is given to the civil war (or invasion) of the Democratic Republic of the Congo, not only because of the destruction and deaths, but also because this country is key to extracting these rare earths because they are found in its territory.

This is where the decision to confront China in every aspect and place, as was done with the USSR, is not yet seen. Furthermore, this lack of concern has allowed Putin's Russia, via the Wagner Group, to control several countries from which Macron's France was expelled, from where it used to obtain uranium and other materials necessary for the nuclear energy that generates a significant part of its electricity. In other words, the interest only in Ukraine has not allowed them to confront a Russian presence that is leading them to have geographical continuity and, lacking only one or two nations, to cover from the Atlantic to the Indian Ocean, nor has a strategy been developed against the alliance of China with Russia, which today seeks to displace the US from its international leadership.

Moreover, China feels strong enough to announce sanctions against American citizens as a response to the sanctions that the US has imposed against Chinese citizens. This is also why China has strongly rejected the US's desire to have a "containment" policy against them, similar to the one that was so effective against the USSR, and has declared that not only does it reject it, but that it would also be doomed to failure.

China is certainly a powerful rival, which leads me to ask in which sector and where would a Manhattan Project be most beneficial for the US, that is, whether just a couple of days of DeepSeek would be enough to require such a high-level commitment or whether there is another sector where Chinese advances are sustained, such as its effort to master nuclear fusion and therefore the future of clean energy. Here a technological revolution is announced and where Chinese progress is consistent enough to announce a before and after in the not too distant future.

History shows us that competition between nations to become the most powerful at a given time has not only existed now, but also occurred when Great Britain displaced Spain in the 17th century and as the US itself did with the British Empire in the period between the end of the 19th century and the beginning of the 20th century. It is a combination of wealth, technology and, above all, the political will to maintain the place or fight for it, by those who want it,

So the issue is not new, and to explain the current tension between China and the US, the concept of the Thucydides trap is used, a theory inspired by the History of the Peloponnesian Wars by Thucydides, a Greek historian from the 5th century BCE. This historian narrates how Sparta, the most powerful Greek city-state at that time, was threatened by the rapid rise of Athens, which it managed to stop.

Using this history, American professor Graham Allison gave the expression the Thucydides trap a general value to explain the relationship between a declining hegemonic power and a rising one, and explanatory value for the current situation in China and the US, in addition to studying 16 cases throughout history, in different eras and cultures.

And it is in this regard that uncomfortable questions can be asked. With examples such as the Russian invasion of Ukraine and Iran's expansion throughout the Middle East, is the US prepared to confront China over Taiwan? There are many reasons to explain a possible confrontation, but so is the topic we are dealing with in this column, that of the company DeepSeek, since Taiwan is not only a Chinese province seeking its autonomy as an independent country, but is now a leading producer of chips that compete to be the most advanced.

Furthermore, the Taiwan Semiconductor Manufacturing Company produces most of the world's most advanced computer chips on the island, some of which are now manufactured in Arizona. Economic areas ranging from the automotive industry to medical devices depend on these chips, so if there were a military confrontation, the world economy could be hit by an unexpected recession, leading to an understandable economic panic.

This is an example of the interdependence of the world today, and how it takes knowledge, but also humility to understand it. It is the reason why the fate of Taiwan does not depend only on an invasion, but is at stake today, and for the purposes of geopolitical competition, will is as important or even more important than the attitude with which DeepSeek has made itself present on the stock market.

Whether it is the new Sputnik or the new Tik-Tok, a review of the past quarter of a century shows that China is still a long way from dethroning the US, but there is also no doubt that it is closing the gap year after year, every year. Before, Japan proved that innovation could be achieved without having to invest heavily in basic science, by innovating on the inventions of others, an example perfected by China in practically all economic activity, perhaps for now, with the exception of Finance, where it remains a secondary player.

It is in this sense that China's AI poses a serious challenge to the US, and what has just been demonstrated is that success in cheap models unexpectedly threatens US technological leadership, as well as having the potential to be an area where Make America Great Again can strengthen or sink, just as Japan first and China later did with electronics, televisions, and a long etcetera.

Here, a reaction similar to that generated by Sputnik would be needed for the best of the US capacity and resources to emerge, as well as the little that is known about the owner of DeepSeek could place us in a scenario only similar to that of Tik-Tok. The owner is said to be a computer engineer named Liang Wenfeng, but all the publicity surrounding the emergence of the R1 model, which would be capable of competing with the most advanced versions of ChatGPT, but at a substantially lower investment and price, curiously is not accompanied, as would be expected, by more biographical data about the person of its inventor and/or owner, which gives rise to a lot of conspiracy theories, starting with the inability to answer the question of its relationship with the Chinese PC.

Whether it is a repeat of what happened with Tik-Tok, where the underlying problem is not that it does something different from other companies, but the difficulties in responding to national security demands, or the case of Sputnik, in a world that is multipolar today, but which threatens to return to two major players, the underlying issue is one: autocracy versus democracy and market versus state control. In both cases, whether it is the example of now or that of the last century, the United States needs to recover the unity that has been lost in its decision-making process, being a divided country and still at cultural war.

In either case, to remain the dominant superpower it needs to overcome its worst weakness, the unity that was lost and has not yet been able to recover.

@israelzipper

Master and PhD in Political Science (University of Essex), Bachelor of Laws (University of Barcelona), Lawyer (University of Chile), former presidential candidate (Chile, 2013)

«The opinions published herein are the sole responsibility of its author».