Good morning. DeepSeek R1 has induced existential angst in tech circles. Venture capitalist Marc Andreessen described the release of the Chinese ChatGPT rival as America’s Sputnik moment . Why the drama? Because DeepSeek encapsulates a slew of fundamental conflicts inside the world of tech:

It’s the U.S. vs. China , complete with Chinese-style censorship, as my colleague David Meyer reports. [Sorry, TikTok , we’ll only love you if we get to own half .]

It’s closed source vs. open source . The latter gives the public access to underlying codes and weights so they can modify and use it themselves.

It’s expensive vs. cheap . DeepSeek claims it took two months and less than $6 million to build its R1 AI model. President Donald Trump called the news a wakeup call for Silicon Valley.

It’s Big Tech vs. new tech. So much for the assumption that you need to be a behemoth sitting atop a mountain of data centers, chips, and dollars to win at this game. Even Microsoft CEO Satya Nadella says he welcomes the competition , despite his stock taking a hit on the news, too.

It’s also us vs. them . Don Tapscott is working on a book about identic AI and argues “the entire model of AI needs to be redone.” He told me yesterday: “Rather than powerful corporations owning our digital future, AI should be decentralized, open, and community-owned and controlled. This vision is increasingly within reach thanks to a co-emerging foundational technology that makes decentralization possible.”

For clarity on all this , turn to Fortune AI Editor Jeremy Kahn, who argues that we should all just relax . While DeepSeek is shaking up the AI market, he argues “the prognostications of Nvidia’s doom may be premature.”

Contact CEO Daily via Diane Brady, [email protected], Linkedin .

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