(This column originally appeared in The Washington Times)
Big Tech and Wall Street are freaking out about DeepSeek’s announcement this week that their AI modeling can do what OpenAI does but at 1/30th of the cost because their models don’t need those expensive chips made by Nvidia, among other factors. Maybe if you’re an investor in Nvidia, you have cause for concern.
But for U.S. small businesses, this is great news. Why?
For starters, this creates more opportunities for OpenAI competitors. Until now, only the big dogs — OpenAI, Microsoft, Google, etc. — had the monopoly on AI chatbots, research and applications, while Nvidia monopolized the chips that fueled these products. Suppose you can believe what DeepSeek says (and, of course, a lot of this needs verification) and that the cost of developing similar models is much lower now. In that case, you can expect many startups to jump into the game and create their own AI solutions and then offer these solutions at a much lower price point.
DeepSeek will turn the hype of small businesses using AI into reality. Countless surveys have shown how small businesses have “adopted” AI. But this is baloney — most are just dabbling with chatbots. The big companies have been making the investments because they have the money. They can afford the exorbitant licensing fees charged by OpenAI and the like for their large language models. The big companies — Klarna, Goldman Sachs, Marriott and many others — have been developing customer service platforms and tools for their employees to increase productivity and decrease head count. Small businesses have been on the sidelines.
But this week’s announcement is a game-changer. Not only can small businesses develop their own AI solutions at a much lower cost, but existing software companies that make products for small businesses — Intuit, Epicor, Shopify, etc. — can also leverage DeepSeek’s model to roll out new AI features to their small-business customers at a much lower cost. This will speed up development and lower small companies’ barriers to leveraging and benefiting from AI platforms.
DeepSeek also addresses our big data center problem. These megacities of servers are eating up energy and resources at an enormous pace because they require lots and lots of computing power. DeepSeek’s much lower requirements mean these same data centers can do much more … with less. Those same servers with expensive, power-hungry Nvidia chips can be replaced by fewer and more efficient machines. This means the world may need fewer data centers to accomplish the same processing. Maybe that’s bad for the data center industry, but it’s certainly good for the planet.
From a regulatory standpoint, the DeepSeek news will also incentivize the Trump administration to relax the many Biden-era rules that have been hamstringing American technology companies. “DeepSeek should also cause Republicans in Washington to rethink their antitrust obsessions with Big Tech. Bureaucrats aren’t capable of overseeing thousands of AI models, and more regulation would slow innovation and make it harder for U.S. companies to compete with China,” says a recent Wall Street Journal editorial. Hear, hear!
The announcement will be a blessing for those concerned about their data. DeepSeek is a Chinese-backed company, and c’mon … who’s going to trust the Chinese with our data? Most of my clients aren’t thrilled with uploading their corporate or private information to existing U.S. platforms such as ChatGPT to take advantage of its capabilities. Do you think they’ll feel more comfortable doing this, knowing it’s a Chinese platform? They won’t. This means it’s only a matter of time before U.S.-based competitors take advantage of this technology and roll out platforms that are better, more private and more acceptable. Small businesses will love that. So will investors.
America’s technology industry is deep, its capital is vast, and now it has an administration that will support it, not fight it. DeepSeek may have surprised this industry, but we’re only getting started. As new technologies emerge that can be deployed at lower and lower costs — with better and better security — the smaller businesses that drive half of our economy will benefit the most.
