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Signs of Breakdown in the American Tech Sector

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  • May 13, 2025
  • Insurance Directions
  •  29

In recent months, America has launched an ambitious initiative dubbed “AI Gateway to the Stars,” a plan that aims to not only solidify its leadership in artificial intelligence (AI) development but also to reinforce its position as a global technological powerhouseThe announcement of this program came along with a staggering investment of $500 billion, which many interpreted as a clear signal of the U.S.'s seriousness in the AI race.

Initially, this massive allocation of funds led many industry observers to believe that the U.S. was prepared to devote enormous resources towards propelling AI advancements to the forefront of technologyAnalysts and technologists across the globe began speculating about the potential ripple effects of such investment on the economy and technological landscapeThe realm of AI – once envisioned as a futuristic endeavor – was suddenly thrust into the spotlight as a crucial battleground.

However, upon closer examination, the motives behind this sweeping initiative reveal a much more complex pictureAt its core, the “AI Gateway to the Stars” serves as a distribution vehicle for economic power in America, arranged posturing after a tumultuous election cycleThe significant financial backing tied directly to political alliances and the repayment of favors rendered during the political campaign underscores a rather transactional nature of this investment.

Tech moguls in Silicon Valley raised substantial funds to support the administration's ascent to power and are now being compensated as their contributions are redirected back towards the AI sectorWhat some might perceive as a bold step towards progress is effectively a reallocation of previously invested resources, now repurposed towards a favor-laden objective.

Moreover, America’s plan not only seeks to fortify its own AI capabilities but also attract global investment, effectively inviting the world to support U.S. priorities in technological research and development

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This approach mirrors the oil diplomacy of the past, reinvented in a tech-driven global economy where control over artificial intelligence becomes paramount.

To maintain its dominance in AI, America employs three primary strategies: co-opting, sabotaging, and appropriating talent and technology.

The co-opting strategy began quietly, with companies such as Meta leading the charge by open-sourcing their large model projectsDevelopers from around the world, including several major Chinese firms, quickly jumped on board, building their own models based on this frameworkWhile this seemed collaborative, it effectively binds developers to the constraints of a U.S.-set framework, keeping them eternally reliant on American technology and forever out of the loop on the core advancements.

This situation creates an environment where developers spin their wheels within the established American system and inevitably remain at a disadvantage in the tech race.

On the other hand, sabotaging poses a specific tactic in which the U.S. is keenly aware of the rapid advancements made by countries like China in the AI domainRecognizing the potential threat to its supremacy, America has placed severe restrictions on GPU access and modeling technologies, intending to sever China’s connection to cutting-edge advancementsThis has been an ongoing tactic to stifle China’s growth trajectory and maintain a technological edge.

However, the American administration remains cognizant of the deep talent pool and unwavering ambition within China to achieve self-sufficiency in technology

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Such motivations indicate that a complete blackout of Chinese progress is an impossible endeavor.

In response, a more insidious approach, termed “appropriation,” has emerged, where the U.S. aims to have Chinese AI advancements essentially work for American interestsDespite this move, China has consistently resisted yielding to U.S. dominance, with groundbreaking projects like DEEPSEEK nurturing a vigorous counter-offensive, changing the dynamics of the rivalry.

As America’s initial plans began to stumble, the country exposed its hand through cyberattacks and economic sanctions attempting to nip DEEPSEEK in the budThis aggressive stance has paradoxically revealed the vulnerabilities and anxieties of the American approach, indicative of the faltering position of the “AI Gateway to the Stars.”

Had American ambitions succeeded, the ramifications for China’s AI sector would have been severe, crippling its growth and innovation at critical juncturesThe entire scenario echoes historical precedents where race-driven technological competition mirrors past military and space arms races, where the show of technological might serves to reinforce a predominant power.

Yet, what remains unexpectedly unforeseen by the U.S. is DEEPSEEK’s disruptive entry, fundamentally altering the regulations of technological competition.

The project’s decision to embrace an open-source model signifies a monumental shiftBy prioritizing broad accessibility over direct profit-generation, DEEPSEEK has effectively dealt a heavy blow to America's monopoly over technology

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In a matter of moments, the AI landscape was reshaped as more players gained entry into the field.

What once appeared as a concentrated jurisdiction of powerful corporations became democratized through open-source methodologies, leading to an accelerated proliferation and advancement of AI technologies.

The U.S. did not anticipate that China’s motivation would not reside in short-term profits, but rather a comprehensive victory in the technological arms race.

With DEEPSEEK demonstrating performance metrics on par with leading models like GDPO1, it achieved this remarkable feat at a mere fraction of the cost — just $6 million and a rapid two and a half months of development time.

From a technical standpoint, this represents an instance of innovation through simplificationRather than laboring with traditional methodologies, which demand extensive resources and yield marginal results, Chinese researchers have optimized processes utilizing advanced techniques.

This "leapfrog" strategy underscores China’s ability to navigate swiftly around traditional barriers, capitalizing on existing infrastructures while rapidly scaling their technological capabilities.

Consider DEEPSEEK's utilization of Chinese language training: as a language rich in semantic nuance, even typographical errors can convey meaning, uniquely positioning it to excel in natural language processing tasks.

Training models on such a complex linguistic foundation strengthens both the model's capabilities and China's competitive stance in AI development.

Currently, with advancements in artificial general intelligence (AGI) on the horizon, burgeoning computational power is set to facilitate a revolutionary leap in AI operations, poised to reshape the global economic structure.

The next fifty years will see AI technology serving as a linchpin for those who wish to dominate the global economy

This scenario presents not merely a contest of technological prowess but a decisive struggle that will dictate the geopolitical landscape of the future.

Crucially, AI symbolizes a treasure that belongs to all humanityChina's enduring philosophy remains rooted in collective progress, vehemently opposing any scenario in which AI is wielded as a tool for exploitation by specific nations.

Currently, many technology companies in the U.S. find themselves ensnared in a conundrumShould other teams continue to roll out innovative algorithms in the next eighteen months while the U.S. grapples with computational limitations, figures like Jensen Huang could see their empires crumble like the once-revered Kodak.

OpenAI is no exception, now facing a precarious position as it relies on user subscriptions to sustain its development and growthWith DEEPSEEK's emergence, many former OpenAI users have changed allegiance, thereby intensifying the competitive landscape.

Consequently, OpenAI confronts diminishing user numbers and revenue, which leads to financial constraints on its research and development efforts, ultimately eroding its historical advantages.

America now faces a dilemma: to adopt open-source principles and relinquish its stranglehold on technology and profits, or to cling to restrictive practices, which would inevitably result in relegation to the sidelines in a rapidly evolving global market.

As the Japanese proverb states, “The nail that sticks out gets hammered down.” It’s time for the U.S. to reassess its strategies and recognize the winds of change sweeping through the world of AI.

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