DeepSeek AI: Suddenly, Reality Arrives

Maybe Insulating Tech Bros is Not a Good Policy?

DeepSeek has delivered what the marketplace always delivers, surprises to those cowering beneath tariffs, and a challenge to those aware that markets exist. It seems that US AI may be comprised of more of the former than the latter. Certainly they're huddling around Trump’s boots hoping for tariff scraps which “slow China down”, seems to say so. In barely a week, we’ve seen a danger tariffs create among the rent seekers. Tariffs lead to an insularity that will always be punctured by effort.

First, the Stargate project is an absurdity. Coached by the far seeing tech bros, Trump in chimp-like fashion, tries to ante up billions to support it. Yet as anyone who has observed IT development can tell you, the perfect is always the enemy of the good. The US was trying to establish a closed system (hilarious!) around a vital IT project. Of such plans are countervailing incentives made. And China has siezed the day.

Second, again, Trump provides the nonsense. Saying that the US will only "drill, baby, Drill!" to generate the energy needed to power AI is akin to Biden's belief that limiting China's access to advanced chips was destined to be effective. Actually, Trump's "drill" approach, and the vitality of AI have nothing in common. Believing oil drilling is the future of energy approximates Ford's thinking about the Edsel, more than anything: wrong car, wrong market….

AI requires much from industry. But this industry is comprised of solar panels, wind power, battery technology, not oil derricks. Trump's capacity to revere "things he saw in the 1980's" is proving to be a knee-breaker when it comes to the future. His embrace of tariffs has been rebuked by reality. Normally Presidents get a few weeks to find their first failures. Trump found his in week one.

The kind of environment tariffs create for domestic industries are exactly the kind US AI exists in. The release of DeepSeek was, quite simply, not about AI at all. It was about the future. And the future belongs to those who are willing and able to compete. US AI now has its opportunity to learn this.

This is not to say that tariffs have no place in economic policy, they do. Placing tariffs on each and every Chinese product which received Chinese state government backing is both necessary and warranted. China is not just trying to export its way to the future. It is trying to deindustrialize the West. In this area of policy, tariffs are warranted and necessary: Electric vehicles, batteries, solar panels, etc., the infrastructure of the future.

Yikes! Congress is going to have to be the adult in the room (so, we're doomed) if the US is going to actually make America able to compete and win. It can start by delivering an orthagonal wake up call to Trump's trip back in time. Denying Gabbard, Bondi, Kennedy and other Trump Nominees approval unless and until Trump snaps out of his reverie (maybe cover the mirrors in the White House?), is a way to deliver this wake up call.

Failing to do so is to provide the surrender papers to China today. Something we humans dare not do. Autocracy sucks.