An AI breakthrough has quietly redefined the global playing field. In this week’s Two the Point, we explore how China’s DeepSeek is reshaping the AI race, and what it could mean for supply chains, inflation, and long-term investment themes.
Key Insights:
- DeepSeek’s R1 model, launched in January, rivals top U.S. platforms while using up to 40x less energy, drawing global attention from engineers and policymakers.
- The R1 breakthrough highlights growing geopolitical tensions in tech, with the next phase of AI development emerging from Shenzhen and Beijing as much as Silicon Valley.
- AI is now a supply chain and energy story, not just a software one, requiring semiconductors, power infrastructure, and supportive regulation.
- Inflation risk could rise, as global supply chains adjust, and nations race to onshore critical AI components and talent.
- Investors should expect volatility, but long-term opportunity remains in firms with scalable infrastructure, pricing power, and innovation tailwinds.
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