With DeepSeek on the horizon, World War III has begun

China through DeepSeek has attacked the very core of American exceptionalism: its tech industry.

By Athan Joshi 

“This is the week when the World War III started.” This statement may look outlandish at first, but there is a very high chance, this is what the history books will say in the future. "There are decades where nothing happens; and there are weeks where decades happen" – it makes for a geopolitical irony that a quote by Lenin best symbolises the days which started with President Trump’s inauguration and are about to be anointed the defining days of this era. The World War III has neither been initiated by a freshly belligerent President Trump nor by any aggressive military action by any of the United States’ perceived challengers in the global sweepstakes. Rather, it is because of China’s quiet, yet powerful, advance in the tech world—a move that may fundamentally challenge the American technological supremacy.

At the heart of this moment is Liang Wenfeng, the 40-year-old CEO of DeepSeek, a Chinese artificial intelligence (AI) startup. His company’s R1 model, which has outperformed the best American AI models at a fraction of the cost and has been given away almost for free, could be remembered as the anchor leg in China’s proverbial hundred-year marathon. This development may well mark the beginning of the third world war — as China through DeepSeek has attacked the very core of American exceptionalism: its tech industry. The first blood was drawn on the American stock exchanges on 27th January.

The United States built its global dominance in the 21st century not brick by brick but byte by byte, through its tech companies. American firms commanded every technological wave in the last 3 decades – PC to internet to smartphone to cloud. The sociopolitical contract that has held since the late 1990s was simple: the US government would allow its tech giants to operate almost as quasi-supranational entities, as long as the companies remained loyal to Washington. These tech behemoths have been at the forefront of a vast economic and technological empire, exporting American values and power worldwide.

In this arrangement, the tech giants could amass incredible wealth and power as long as they were aligned with American geopolitical interests and the productivity gains they brought about were endorsed by Wall Street and Main Street. The prevailing assumption was that US tech companies would always lead the world, untouched and unrivaled. However, the development of DeepSeek’s R1 model has attacked this very foundation of modern American prosperity and dominance.

For years, China has been a distant number two in the global tech league tables marred by concerns over quality and data control. However, with DeepSeek’s impressive leap forward, the question is no longer whether Chinese tech can match American innovation—it is about whether China can surpass the US and redefine the global tech landscape. If DeepSeek is available at a fraction of a cost of the US tech companies and can run locally on your laptop or data centers and not in Chinese data centers, does it matter that it originated from China? It is likely that most countries, organisations and individuals will eventually answer that question as a “no”. Especially so, as the DeepSeek model can be locally forked, it may eventually be taught to talk openly about Tiananmen Square, Arunachal Pradesh and Spratly Islands, taking away the disagreeable Chinese characteristics of this technological brilliance.

For long, the US has used its massive regulatory arbitrage capabilities to thwart global competition. The US regime of export controls that sought to limit China’s capability to innovate in AI was one such instrumentality. That the US stopped the chips but let its models be available may have aided the 200-odd Chinese whizkids working for DeepSeek. With DeepSeek going open source, this traditional western regulatory arbitrage is taken away. Governments may not be able to block something that’s been given away for free and which can be locally forked.

DeepSeek attacks not just the Silicon Valley ego, but also its business model. Importantly, by open-sourcing the software, DeepSeek has attacked one of US tech industry’s most entrenched advantages: its control over expensive proprietary software. DeepSeek and the likes may also make it easier to push the technology frontier in the user industries around the world, because now there may be a minimal cost of AI adoption and resultant change management. This could be a second order blow to Silicon Valley because in addition to their hitherto invincible revenue model being attacked, the barriers to entry to their core business may end up reducing drastically.

The assured path of global prosperity, where the US government was the North Star, has suddenly discovered a new lighthouse. The US will have to respond. This response may end up being interdisciplinary and cross-domain. Escalatory moves, where the US is trying to preserve its technological superiority, while China is trying to destroy the assured revenue stream of that superiority by delivering commoditized, global productivity bump, may eventually formally culminate in World War III. Maybe, this time DeepSeek will face off with ChatGPT in the data centers, rather than J20s and F35s dogfighting. But a clash of two giants, each driven by distinct worldviews and divergent end goals, with one relentlessly seeking to undermine the other, is not only inevitable but also a defining feature of the new global order.

Athan Joshi is a Sophomore at Los Altos High School in California and is interested in politics, economics and business.

Views are personal, and do not represent the stance of this publication.