Unless you are really committed to a life of absolute, self imposed solitary confinement, you are aware of the DeepSeek AI product that was recently released by the Chinese based company. Currently, the drama surrounding this technological bombshell has centered around the company’s claims of achieving a true breakthrough on a shoe string budget. Specifically, the company has claimed to have trained its model for under $6M.
In the week since the company announced its numbers, there has been much speculation that because of US trade restrictions, the company simply hasn’t disclosed the reality of it using NVIDIA chips. The possible use of NVIDIA chips has apparently gotten NVIDIA CEO Jensen Huang an invitation to the White House.
While trade restrictions, and nation-state tech wars seem very “Cold War” era, we can not help but think we’ve entered a completely new era, an era that began in 2008 with the publication of the Bitcoin white paper. In the decade and a half since Bitcoin’s launch, we’ve seen the rise of several technologies: mobile, everything “as a service,” 5G, etc. While these advancements have been significant, they’ve been sandwiched between the creation of Bitcoin and DeepSeek, two open source protocols that have decentralized money and now AI. It is our belief that DeepSeek’s budget is far less interesting than the fact that anyone can now use it. Like Bitcoin, its code has been gifted to the world.
When non-technical types hear “open source,” there is no real emotional urge to get excited. For those far away from the tech space, the idea that something might be free, implies something of a non-differentiated, cheap offering, almost like a commodity. In other words, “no money to be made here.” At present, we don’t think AI is anywhere close to being a commodity, (it keeps getting more advanced, so it’s hardly worth comparing it to a soybean). And while the SEC has agreed that Bitcoin is not a security, we think use cases around Bitcoin are still evolving. In short: these two open source protocols are anything but commodities, yet everyone has access to them.
As investors, when we see open source protocols outpacing their more traditional rivals, we take note. This is one of the principal reasons that Bitcoin continues to be the dominant position within our portfolio. Are there other protocols doing interesting things? Yes, and while we have positions in some of them, none have the revolutionary punch that comes with Bitcoin’s never been hacked, open source, decentralized protocol. That both DeepSeek and Bitcoin are on the world scene at a time when international tempers are flaring and alliances are being questioned is a good thing, perhaps even a great thing. Are currency wars a thing of the past if a Bitcoin standard is adopted? Are NVIDIA based chip wars yesterday’s news if chips aren’t where the innovation is to be found? We’re not 100% sure of the answers, but our Bitcoin bet of eight years ago tells us we’re on the right track.
