Ever since the US started to place an embargo on supplying high tech chips and semiconductor production equipment to China, I’ve wondered what the ultimate effect of that policy would be; in particular, whether it might be self-defeating. We had the first intimation of this last September when Huawei’s launched their Mate 60 Pro phone. It included a new 7nm processor, that appeared to compare favourably with the smaller geometry processors Chinese companies no longer had access to. Last week we saw a second example, with the unveiling of DeepSeek’s R1 AI application, which seems to achieve similar results to ChatGPT, but using a fraction of the power. That came as a bitter blow to the nascent VC funded nuclear industry, which had been angling for a future of fusion and fission powered data centres. It also got Wall Street panicking about whether it might have misjudged the value of AI.
To anyone who has read Michael Rosen’s children’s book, “We’re Going on a Bear Hunt”, this news shouldn’t have come as a surprise.