Former Google CEO Eric Schmidt said Wednesday that the rise of DeepSeek, the Chinese startup behind a new artificial intelligence (AI) model taking the internet by storm, marks a “turning point” for the global AI race.
In a Washington Post op-ed with MakerMaker.AI CEO Dhaval Adjodah, Schmidt argued that DeepSeek’s AI shows the need for American companies to develop open-source models.
“The United States already has the best closed models in the world. To remain competitive, we must also support the development of a vibrant open-source ecosystem,” Schmidt and Adjodah wrote.
“The race between open- and closed-source AI, as well as between the United States and China, does not yet have a clear winner,” they continued. “But there is clearly mounting pressure on America’s Big Tech players if DeepSeek can compete with them using far fewer resources.”
DeepSeek unveiled its R1 open-source reasoning model last week and quickly shot to the top of Apple’s App Store, overtaking OpenAI’s ChatGPT. Notably, the Chinese startup claims it spent just $5.6 million and relied on a couple of thousand reduced-capacity chips to train its latest models.
This threatens to upend the current AI calculus, which assumes AI development required mass investment in chips and data centers. DeepSeek’s emergence spooked investors, sending U.S. tech stocks tumbling Monday.
Schmidt and Adjodah suggest that this is also a moment to reconsider the value of open-source AI models. Most leading American-made AI models, such as those developed by OpenAI and Anthropic, are closed-source.
Meta, Facebook and Instagram’s parent company, stands alone as one of the few major tech firms developing open-source AI. Open-source AI makes its underlying components publicly available, which allows others to build on top of it.
“It is unlikely that American frontier model companies will change their business models anytime soon, nor is it immediately clear that they should,” Schmidt and Adjodah wrote. “Open and closed competition will most likely find a natural equilibrium, with a range of different offerings and price points for different users.”
“But DeepSeek’s release marks a turning point,” they continued. “The path forward for American innovation involves not just ramping up open-source development but also encouraging the sharing of training methodologies and increasing investment in AI research and development.”
