Tom Kalopoulos

What is causing all the uproar is that DeepSeek R1, which is their current version of their reasoning AI, has been able to achieve cost efficiencies that are just unheard of, to the extent that, believe it or not, it is 93.5% less expensive to operate, from what we're told, than OpenAI's ChatGPT, which is pretty extraordinary.

I believe they have created something that needs to be paid attention to. In many ways, what we're seeing is the opening salvo of an AI Cold War. This is China's Sputnik, if you will.

I think we've overreacted, to be quite honest. I think this will be a back and forth, a game of leapfrog, certainly between the U.S. and China for quite some time.

But I think markets were spooked because they expected, especially after the announcement we just made with the enormous investment of $500 million in AI infrastructure, that we somehow had a lead that was not going to be easily displaced. And the reality is that is not the case.

This is very much going to be a tit-for-tat, an arms race, and we are not going to be able to take the lead and keep the lead without some serious innovation on our part as well.

What we have in the U.S. is this incredibly rich ecosystem of technology players. And that ecosystem, I think, gives us a significant leg up. China is going to have to try very hard to scale what they've just demonstrated.

And while there's an element of cooperation that we can, I think, certainly exercise going forward, we also have to keep in mind there is an element of national interest and national security at play here, too. Their CEO, Lian Wangfeng, is someone who needs to be taken quite seriously. I don't think that they are being hyperbolic in their claims.

I think there's questions as to whether or not they can scale their claims.