On 27 January 2025, the AI industry experienced a seismic shift when DeepSeek, a Chinese AI company, introduced a reasoning model that rivalled those of OpenAI, Google, and Meta—at a fraction of the cost. The impact was immediate: NVIDIA’s stock plummeted 17%, wiping out $600 billion in market value—the single largest loss for a firm in history. But beyond the financial shock, DeepSeek’s emergence raises a more fundamental question: Have dominant tech firms overestimated the capital required for cutting-edge AI development?
This AI Insight, by Dr. Scott Timcke as part of Research ICT Africa’s Africa Just AI project, critically examines how DeepSeek’s breakthrough challenges entrenched assumptions about AI infrastructure, investment models, and the future of global AI competition. It explores whether AI will follow a winner-takes-all model, as seen in previous tech revolutions, or if a distributed, pluralistic development pathway is emerging—one that could create new opportunities for emerging markets.
