The launch of China’s DeepSeek-R1 AI model signals a turning point in the global tech race. Here’s what it means for the U.S.

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John,

You may have heard about a new AI model from China called DeepSeek-R1. It’s been all over the news, and here’s why it matters:

First: The U.S. lead in AI is at risk.

The best AI systems in the world so far have been made here in the U.S. by companies like Google, OpenAI, and Meta. But China’s new model, DeepSeek, is just as good as the American ones – if not better.

Here is the kicker: China says they built DeepSeek for a fraction of the cost of ours. Their model is also much cheaper to use. Businesses and investors want the most affordable AI; right now, China is in the lead.

China did not just stumble upon this success. Their progress is the result of years of smart investment and planning. They are overtaking the U.S. in a range of technologies.

But AI is different. It is shaping up to be the most important technology of the 21st century. Imagine if China, not America, had created the internet in the 20th century. That is the situation we are facing today with AI.

Second: The stock market’s reaction is a warning sign.

The stock market took a dive on Monday after DeepSeek’s release. Investors are worried China’s tech is better than American companies.

Tech companies like Apple, Google, and Microsoft are the backbone of the American economy and they were hit hard by the news. If their stocks continue to fall, the whole economy could be in trouble. DeepSeek’s release has exposed the risks of assuming the U.S. will dominate tech forever.

This is a turning point in U.S.—China competition, and how we respond is critical. The U.S. has faced moments like this before – like when Sputnik launched in 1957 and shocked the world. We responded with focus and determination, and within a decade, we landed a man on the Moon. We need that same resolve now.

At No Labels, we believe in supporting leaders who will tackle challenges like this head-on. Winning the AI race is about shaping the future of freedom, fairness, and opportunity for the entire world. America must lead – and we need leaders who will ensure we do.

Liz Morrison

No Labels

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