China is making enormous progress in the development of artificial intelligence technology and it has set off an earthquake in the west the stocks of us big Tech corporations crashed losing tens of billions of dollars on the news that a small Chinese company called Deep seek had created a new AI model that they released for free to the public the Western media has referred to deep seek as the biggest threat to Silicon Valley's hegemony and this is widely being called a Sputnik moment that is a reference back to 1957 during the first Cold War when the
Soviet Union launched the first ever satellite in outer space which was called Sputnik 1 the United States had significantly underestimated the technological capabilities of the former Soviet Union then just as the US has vastly underestimated the technological capabilities of China today now what's amazing is that the small Chinese company deep seek was able to develop a large language model llm that is even better than the models that have been developed by the US Mega Corporation open AI which is half-owned by Microsoft one of the biggest corporate monopolies on Earth and in order to develop its
groundbreaking R1 model deep seek reportedly only spent around $ million us on the research this is absolutely remarkable because Us big Tech corporations have spent more than a trillion dollars developing artificial intelligence in the past decade just in 2024 Us big Tech Corporation spent 200 billion on capital expenditure for AI and they're expected to spend 200 34 billion in 2025 moreover when open AI announced in December 2024 that it had introduced chot GPT Pro it was charging $200 per month just for a subscription to use the application compare that to the Deep seek R1 model
which is completely open source it's free for everyone in the world to use not only is their app free to use but you can download the source code because it's open source you can install it locally on your computer or on your phone you can even use it without the internet this is completely free for everyone on Earth and what's even better is that deep seeks llm models only use a tiny fraction of the overall energy and computing power needed by open AIS models so this is cheaper to use it's better for the environment and
it's more accessible to the entire world and it's free I need to stress this point it's free this is why the week it was launched in late January deep seek became the most popular app on Earth the number one app in the United States overtaking chat GPT this has caused pandemonium in the US Stock Market Because deep seek only spent reported the around $6 million compared to the hundreds of billions of dollars being spent by Us big Tech corporations so a lot of investors are saying why are we spending so much money on these companies
when a small startup in China can do better work for free and moreover the US government put export restrictions on China trying to block China from getting access to cuttingedge Nvidia chips that are needed for AI or that they thought were needed to develop AI but in reality deep seek has shown that you don't need the most cuttingedge chips if you have brilliant research ERS who are motivated to innovate so what happened Nvidia lost $600 billion in its market cap in one day this was the largest one day loss in the history of the US
Stock Market Nvidia shares plunged 177% and other shares of big tech companies like Dell and Oracle and super micro computer all fell by at least 8.7% in one day now immediately after nvidia's stock crashed it slightly rose again because investors were doing something known as buying the dip the same thing happened overall to the NASDAQ Composite which is the main stock market index of publicly traded tech companies in the United States but this was a massive blow to Global investor confidence in the US Stock Market and the idea being pushed by the Western Financial press
of so-called American exceptionalism the idea that US tech companies are the best in the world and there's no real competition to these monopolies in Silicon Valley in reality what we've seen is that out of nowhere a small little known Chinese startup has shaken everything up and this is leading many Financial analysts to ask if this is the beginning of the popping of the massive big Tech bubble in the United States now I recently published a video which I will put a link to in the description below explaining how the US Stock Market is in the
biggest bubble in history when you look at the buffet indicator which measures the market capitalization of publicly traded stocks in the US compared to GDP you can see that it is at the highest level ever recorded at more than 200% of GDP which is significantly higher than at the peak of the dot bubble that burst in 2000 or if you look at the price to earnings ratio the PE Ratio which compares the inflation adjusted earnings of us publicly traded companies compared to the price of their stocks you can see that they're at the highest levels
since the.com bubble of 2000 and they're even higher than they were in 1929 at the peak of the stock market Mania which eventually crashed and contributed to the Great Depression of the 1930s this is why even Jamie Diamond the CEO of the largest US Bank JP Morgan Chase warned at the world economic Forum in Davos in January that the US Stock Market is inflated he publicly said it and when you have these large oligarchs on Wall Street publicly saying it it's clear that it's a warning they're saying you should probably get out now and what's
even more concerning is how extremely concentrated the US Stock Market is the majority of the growth in the S&P 500 which is the index of the 500 largest publicly traded companies on us stock exchanges the growth in that index in recent years has been overwhelmingly dominated by just a small handful of big Tech corporations which are known as The Magnificent Soven or the mag 7 those are Apple Microsoft Nvidia Amazon meta Tesla and alphabet together those seven big Tech corporations make up a third of the weight of the entire S&P 500 and those same mag
s companies make up nearly a quarter of the weight of the msci world index which is used by investors around the world to invest in the stock market of the entire world and yet it's largely dominated by a small handful of us big Tech monopolies so there are literally trillions of dollars from investors all around the world that have flooded into the stocks of these Us big Tech corporations under the assumption that they have no real competition they're the only game in town and yet what we've seen in China is that these small startup companies
with just a few million dollars can challenge the technological Chokehold that Silicon Valley has on the entire world this is especially symbolic because the extreme power of the billionaire oligarchs in the US big tech companies has been exposed by the Donald Trump Administration Trump invited the world's richest billionaires to sit with his cabinet members at his inauguration on the 20th of January the world's three richest oligarchs were sitting there which are Elon Musk Jeff Bezos and Mark Zuckerberg which together the three of them have more than $800 billion dollars of wealth they were joined by
the CEO of alphabet and Google the billionaire Sundar pacai and also the billionaire CEO of Apple Tim Cook and then just one day after Trump invited all of those big Tech billionaires to his inauguration he invited three more big Tech billionaires to the White House where they announced the Stargate project pledging 500 billion dollars of investment in artificial intelligence technology in the US Trump proud L announced this standing next to Sam Alman who is the billionaire CEO of open AI which is half-owned by Microsoft he was also with the billionaire CEO of soft Bank masayoshi
son and he was with the billionaire one of the richest men on Earth Larry Ellison who is the chairman of Oracle so it's become completely clear to the entire world that the United States is an oligarchy that the US government is being run by a small handful of billionaires in the Trump Administration there are 13 billionaires including Trump himself who have senior roles in the administration when Trump ran for president he held these luxurious Galas where he raised tens of millions of dollars telling rich people that he's going to continue cutting taxes on the rich
and on corporations and when Trump was president the first time he cut taxes on the rich so much that the 400 richest billionaire families in the United States paid a lower average tax rate than the bottom half of the entire country the bottom half of workingclass Americans who struggle to make ends meet living paycheck to paycheck they pay more taxes than the richest billionaire oligarchs in the country so obviously these big Tech corporations are extremely afraid of competition that's what they fear most of all well regulation and being broken up but that's not going to
happen because the US government has been captured by them so what they fear is competition especially from China which is why the US government has tried to ban all of the Chinese competitors to us big Tech monopolies this is what they tried to do to Tik Tock trying to force the Chinese parent company of Tik Tok which is called bite dance to sell Tik Tock to a US big Tech Monopoly and now the US government is fear-mongering about deep seek claiming that the app is a so-called national security threat which is always the excuse used
by the US government they said that Chinese electric vehicles from companies like byd are a so-called national security threat so the US government put 100% tariffs on Chinese electric vehicles just a few weeks after Elon Musk the richest man on earth warned that if the US government didn't put protectionist policies and tariffs on Chinese EV s that they would demolish Rivals like Tesla so and this was under the Biden Administration this is bipartisan it's not just Donald Trump they are trying to protect us big Tech monopolies and prevent any Chinese competitors from challenging them despite
the fact that Chinese electric vehicles are significantly cheaper and better than Tesla and other electric vehicles produced by us car companies which there are not many options but look I have personally been in byd cars and in Tesla cars B byd cars are better frankly and they're way cheaper you can buy low level byd cars for around $110,000 Teslas are four or five times as much money for Worse quality but the US government doesn't want people in the US to have these Chinese vehicles because they're trying to protect us corporate monopolies and what is their
excuse National Security it's always their excuse in fact the US Navy has already banned the use of deep seek claiming that it has security and ethical concerns when they say ethical concerns they mean it's unethical because it's competing with us corporate monopolies and I need to stress again this is so stupid because deep seeks model its R1 model is open source it's free you don't need to use the Deep seek app you can install it on your phone the actual llm the large language model model you can install it on your computer locally you don't
even need the internet to access it and what's funny is that some AI developers on Twitter were making fun of open AI which its name is open AI although it's actually half-owned by Microsoft one of the world's largest corporate monopolies and this Chinese company deep seek actually produced an open source model and yet open AI one of the largest corporations on Earth is charging people 200 00 per month to use its chat GPT pro model and meanwhile critics of deep seek say oh this Chinese company is going to collect all of your data meanwhile if
you actually look at open ai's privacy policy they say very very clearly I'm reading here from open ai's website quote we collect personal data if you create an account to use our services or communicate with us end quote so everything that the US government claims about Chinese companies is exactly what all of these Us big Tech corporations do they're spying on all people all around the world not just in the US not only domestic users people all around the world who use these Us big tech apps they're being spied on their data is going to
the United States and we know that the US National Security Agency the NSA spies on everyone all around the world including heads of state this was exposed by the NSA whistleblower Edward Snowden over a decade ago he showed that more than 35 world leaders were being spied on by the NSA by the US government using back doors in different technological products produced by us companies all of these us companies allow the US government to spy on people around the world and yet we're supposed to be afraid of China every accusation made by the us against
China is a confession of what the US government actually does and speaking of that I should point out just how coincidental it is gosh darn that the same week that deep seek became the most popular the most downloaded app in the United States overtaking its Silicon Valley competitors what happened there was a massive Cyber attack against deep seek hm what a coincidence I wonder who could possibly be behind these attacks I'm sure there are no connections whatsoever but I'm just going to point out aose of nothing to very interesting news articles from back in 2019
did you know that the US government admitted to launching cyber attacks on Iran hm who knew or did you also know that back in 2019 the New York Times reported that the US government US government officials admitted that they were carrying out cyber attacks on Russia's power grid huh so there is a precedent here that's that's very strange what we've seen for years is that the US government has been waging a technology war and an economic war against China and Western media Outlets have said this openly back in 2023 CNN published an article titled US
escalates tech battle by cutting China off from AI chips and this was not just the Biden Administration this went back to 200 18 and Trump's first term when Trump launched a trade war on China and he began restricting the export of important forms of technology to China this has been referred to as a Chip War and why is the US government waging a Chip War why did the US government put sanctions on top Chinese tech companies like Huawei why did the US government put export restrictions on China to try to prevent it from getting access
to cuttingedge semiconductors well well Joe Biden's Commerce Secretary Gina Rondo admitted it she said that the US wants to quote slow down China's rate of innovation end quote that was that was openly admitted the US government stated goal is to prevent China from technologically developing in 2024 Commerce Secretary jondo said that the US will quote do whatever it takes end quot to prevent vent China from getting access to cuttingedge technology do whatever it takes whatever it takes includes a lot that includes cyber attacks sanctions tariffs sabotage who knows it includes a lot of things within
whatever it takes this is how desperate the US government has been in its Tech war and trade war on China trying to save Silicon Valley from any competition trying to save all of these corporate monopolies in Silicon Valley who fund politicians from both the Republican and Democratic parties in the Biden Administration and the Trump Administration if it wasn't already obvious enough that the US government has been waging a new Cold War against China well the US Commerce Secretary Jina Rondo said it again she said in 2023 that China is quote the biggest threat we've ever
had end quote and then she said that quote every minute of every day we have to wake up tightening those controls end quote so the US government has been waging a fullon tech War an economic War trying to destroy China's Tech sector and save Silicon Valley monopolies and what has been the result the US has failed deep seek has shown how China continues to innovate it's creating better technology for much cheaper and it doesn't need access to the cutting Edge chips made by Nvidia it's doing it for just a few million dollars with older chips
and the biggest irony in all of this is that for years Western so-called experts have claimed that China can't innovate if you don't believe me this is what the Harvard Business review a journal at the most prestigious Elite us University they published an article in 2014 titled quote why China can't innovate end quote that's the title and then the Western media Outlet the Diplomat published an article with the same title why China can't innovate and they claimed quote China's system is not set up to encourage innovation in practice end quote this is the condescending frankly
racist idea that Western so-called experts have repeated ad nauseum for decades claiming that China can't innovate all it can do is copy and steal because at the heart of their claim they're saying that the US system is better capitalism is better China is supposedly backward according to them because China is socialist it is governed by a Communist party and they could never possibly innovate only billionaire capitalist oligarchs like Jeff Bezos and Elon Musk and Mark Zuckerberg who are given billions of dollars of subsidies by the US government by the way but let's not talk about
that the free market only billionaire oligarchs like them can innovate we're supposed to believe that China China and its unique socialist system is unable to innovate and yet what we're actually seeing is that not only is China innovating even better than us big Tech monopolies run by these billionaire oligarchs who fund us politicians and control us politics in reality Chinese companies are doing it with much fewer resources and then what did deep seek do it released its model the R1 AI model to the entire world for free open source it's now public domain this is
a public good this is what truly infuriates the capitalist oligarchs in the west because they want to maintain monopolistic control over all of this technology so they can force people around the world to pay Monopoly rents to us corporations like open AI which is charging $200 a month to use chat GPT Pro they're Furious of about this open-source technology that China has produced and this is just the beginning because there are so many other examples of incredible Innovation happening in China for instance the same week that deep seek announced its model Alibaba the Chinese company
announced another AI model which is called Quin qween and their model they claim is just as good if not better than deep seeks model so the US government government thought that they could destroy China's Tech sector by waging Tech war and economic war on China by blocking the export of advanced semiconductors to China and what has happened it has only further incentivized China to innovate and what we've seen is that back in 2015 the Chinese government announced an ambitious industrial policy program called made in China 2025 and what happened the Trump Administration the first time
and the Biden Administration imposed sanctions and tariffs and restrictions on China and it didn't work China met almost all of the goals of its made in China 2025 program and it's not just the Chinese press saying this Bloomberg the leading US Financial media Outlet published an article titled almost 10 years later China's made in 2025 has succeeded Bloomberg published a graphic that illustrates just how much progress China has made technologically in a very short period of time China is now the world's leader in unmanned area Vehicles that's drones in solar panels in graphine in High-Speed
Rail in electric vehicles in lithium batteries China has also become the world leader in LNG carriers and it's extremely competitive in pharmaceutical drugs in large tractors Machine Tools robots artificial intelligence semiconductors the only area where China is not yet competitive is commercial aircraft which is dominated by a duopoly of Airbus and Boeing and we can see that Boeing has been destroyed by a bunch of Finance Bros who who fired all of the engineers and are selling they're destroying the the the company they're treating it like private Equity Funds have treated the US economy selling it
for parts well very soon China is expected to become very competitive in commercial aircraft globally as well so in every major technological industry from low Tech to high-tech China is catching up very quickly to the United States and in some cases as we see with deep seek China is surpassing the US and if you don't believe me well I'm going to conclude the analysis today with a video clip from the Chinese New Year celebration that was held and there was a dance that featured dancing robots I'm not joking it is an Incredible video showing these
Robots dancing along with human dancers in a coordinated routine and unlike Tesla which does its superficial PR stunts for gouble investors these robots are not being remote controlled by people behind stage this is how much incredible progress China has been making in technological development and like I said this is just the beginning wait to see what China will be doing in the next 10 or 20 years and this is precisely why politicians in Washington have been losing their minds over China from both parties Republicans Democrats the Trump Administration and the Biden Administration they're are they're
mouth foaming warmongers trying to destroy China at all cost because for years the so-called experts have been telling them China can't innovate China can't innovate China can only copy and Here China is innovating it's running laps around the United States with fewer resources under sanctions under export restrictions under tariffs and the US government is getting more and more aggressive because it's trying to protect its Silicon Valley corporate monopolies who do not want any competition and in reality what happens is when you have monopolies they do not want to innovate they simply want to establish control
over everything and then charge exorbitant Monopoly rents to get rich that's become the US economic model it's not based on Innovation that's why they're trying to ban Tik Tok that's why they're trying to ban Chinese electric vehicles that's why they're trying to ban Chinese solar panels and now they're going to start Banning Chinese AI tools made by companies like deep seek so this is absolutely historic this is Earth shattering and I think it is very appropriate to refer to it as a new Sputnik moment because the US Empire is so arrogant and it's run by
these warmongering politicians who always underestimate their geopolitical Rivals and here we are today and they have a lot of egg on their face they have been shown to be the emperor without clothes on that note I'm going to conclude I am Ben Norton I'm the editor-in-chief of geopolitical economy report please like And subscribe please share this I will see you all next time
