Why Open Source AI is the New Soft Power

0:00Today on the AI Daily Brief, open source as the new soft power. The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI. To join the conversation, follow the Discord link in our show notes.

0:18Hello, friends. As you can probably tell, I am recording this on Friday, still in the midst of this flu. But for this week's Long Reads episode, when I was searching around the web, it's very clear that the launch of DeepSeek is still the most resonant thing that's happened in AI in a very long time. There were numerous op-eds trying to make sense of what DeepSeek really meant for American companies, for American markets, for the AI industry, and for geopolitics. We're going to start by reading a set of excerpts from columnist Zeynep Tuveki called The Dangerous AI Nonsense That Trump and Biden Fell For.

0:49You can probably tell the position she's coming from just from the title. I'm going to turn it over to the AI version of myself, which today at least will be much better than the non-AI version of myself, and then I'll be back to introduce the second piece. China's tech industry recently gave the U.S. tech industry, and along with it the stock market, a rude shock when a startup called DeepSeek unveiled an artificial intelligence model that performs on par with America's best, but that may have been developed at a small fraction of the cost and despite trade restrictions on AI chips. Since then, there have been a lot of frantic attempts to figure out how DeepSeek did it and whether it was all above board.

1:22Those are not the most important questions, and the excessive focus on them is an example of precisely how we got caught off guard in the first place. The real lesson of DeepSeek is that America's approach to AI safety and regulations, the concerns espoused by both the Biden and Trump administrations, as well as by many AI companies, was largely nonsense. It was never going to be possible to contain the spread of this powerful emergent technology, and certainly not just by placing trade restrictions on components like graphics chips. That was a self-serving fiction, foisted on out-of-touch leaders by an industry that wanted the government to kneecap its competitors.

1:58Instead of a futile effort to keep this genie bottled up, the government and the industry should be preparing our society for the sweeping changes that are soon to come. The misguided focus on containment is a belated echo of the nuclear age, when the United States and others limited the spread of atomic bombs by restricting access to enriched uranium, by keeping an eye on what certain scientists were doing, and by sending inspectors into labs and military bases. Those measures backed up by the occasional show of force had a clear effect. The world hasn't blown up yet. The Trump administration is operating under the same faulty logic.

2:31Just one day into his new term, President Trump and OpenAI's chief executive Sam Altman, fresh off his$1 million pledge to Trump's inaugural fund, announced a vast computing infrastructure venture called Stargate. It is billed as a multi-hundred-billion-dollar bid to retain U.S. advantage in the fast-growing industry. DeepSeek chose the very next day as the moment to publish a paper letting the world in on its great coup. The company says it spent little of what OpenAI and others spent because it was able to optimize its software and train its model more efficiently. Advances like that have allowed many other technologies to become cheaper and more widely available.

3:05Still, not everyone believes that account, especially given questions about China's respect for intellectual property rights and trade restrictions. Could the company have amassed a forbidden stash of NVIDIA chips? Maybe. Could the cost of developing the model have been higher than was disclosed? Some estimates suggest so. OpenAI says that DeepSeek may have stolen some of its work. But whatever DeepSeek did it, and others, can keep doing it. Already, many AI companies are building on DeepSeek's model. Individuals are downloading it or querying it for only a tiny fraction of what OpenAI charges.

3:37Within the industry, there's a popular trope that the real turning point will be the development of AGI, or artificial general intelligence, when AI reaches human-level intelligence and potentially becomes autonomous. The implication then is that what's happening now is just a kind of warm-up which no one needs to worry too much about. That's a convenient falsehood. We have reached the other AGI turning point, artificial good-enough intelligence. AI that is fast, cheap, scalable, and useful for a wide range of purposes. And we need to engage with what's happening now. Many observers have described this as a Sputnik moment.

4:10That's incorrect. America can't re-establish its dominance over the most advanced AI because the technology, the data, and the expertise that created it are already distributed all around the world. The best way this country can position itself for the new age is to prepare for its impact. If the inevitable proliferation of AI endangers our cybersecurity, for example, instead of just regulating exports, it's time to harden our networked infrastructure, which will also protect it against the ever-present threat of hacking by random agents or hostile governments. And instead of fantasizing about how some future rogue AI could attack us, it's time to start thinking clearly about how corporations and governments could use the AI that's available right now to entrench their dominance, erode our rights, worsen inequality.

4:53As the technology continues to expand, who will be left behind? What rights will be threatened? Which institutions will need to be rebuilt and how? And what can we do so that this powerful technology with so much potential for good can benefit the public? It is time, too, to admit that the interests of a few large multinational companies aren't good proxies for the interests of the people facing such a monumental transformation. Today's episode is brought to you by Vanta. Trust isn't just earned, it's demanded. Whether you're a startup founder navigating your first audit or a seasoned security professional scaling your GRC program, proving your commitment to security has never been more critical or more complex.

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7:19Hello, AI Daily Brief listeners. Taking a quick break to share some very interesting findings from KPMG's latest AI quarterly pulse survey. Did you know that 67 % of business leaders expect AI to fundamentally transform their businesses within the next two years? And yet it's not all smooth sailing. The biggest challenges that they face include things like data quality, risk management, and employee adoption. KPMG is at the forefront of helping organizations navigate these hurdles. They're not just talking about AI, they're leading the charge with practical solutions and real-world applications.

7:51For instance, over half of the organizations surveyed are exploring AI agents to handle tasks like administrative duties and call center operations. So if you're looking to stay ahead in the AI game, keep an eye on KPMG. They're not just a part of the conversation, they're helping shape it. Learn more about how KPMG is driving AI innovation at kpmg.com slash US. The second piece from former Stability AI head of public policy Ben Brooks is called If China Shares AI, the U.S. Can't Afford to Lock It Out. Once again, I'm going to turn it over to the AI version of myself, and then we'll be back to discuss.

8:23When the Chinese firm DeepSeek launched its latest AI model, shocking policymakers and bruising the stock market, it exposed a paradox. Freely available software that parrots the Chinese Communist Party was made freely modifiable. DeepSeek's open source models rival those from closed source U.S. labs and power a chatbot that is currently the most downloaded app globally. But they promote the One China policy, flatter Xi Jinping, and avoid talk of Uyghur genocide. The chairman of the House Select Committee on the Chinese Communist Party, arguing the new model is controlled by Beijing and openly erases the party's history of atrocities, called for stronger export controls?

8:57His colleagues quickly obliged. Within 48 hours, Sended Josh Hawley had introduced a bill to prohibit the import and export of any AI technology to or from China, with penalties of 20 years imprisonment. The bill would ban research projects, activities directed toward fuller scientific knowledge with Chinese colleges or universities. And the broad definition of AI technology would capture not just chips, but also data, research software, and the distinctive settings or parameters that determine a model's performance. These proposals are the most aggressive AI reforms contemplated by any policymaker of either party anywhere in the U.S.

9:31President Trump has blasted the Biden administration for imposing onerous and unnecessary government control over AI. Yet a ban on the import and export of intangible technology like models, digital files that can be shared on the internet, would eclipse anything proposed by his predecessor, the European Union, or the Republicans' bait noir California. Bizarrely, the bill appears to prohibit simply downloading Chinese technology or intellectual property, barring U.S. developers from even studying models like deep-seeks, let alone learning from them. And since no one can reasonably prevent widely available software, data, or research findings winding up in China, it would put the brakes on open science and open technology from the U.S.

10:09too. If they survived Congress and a robust First Amendment challenge, these ideas would smother open innovation and foster a global reliance on Chinese technology in the process. While Chinese developers are required by law to ensure their models adhere to the CCP's core socialist values, it's precisely because deep seek open source there are one model that researchers and developers can do something about it. Anyone can download and run the model independently of DeepSeek, probe it for undesirable behaviors, and modify it to improve performance, or unwind censorship. Within a few days, developers had shared over 500 variations of the model online, earning five times as many downloads as the original.

10:48The AI search engine Perplexity has tweaked and deployed its own version of R1, which can summarize the Tiananmen Square massacre and explain Taiwanese independence without the Orwellian admonitions of the original model. By comparison, the largest models released by OpenAI, Anthropic, or Google are closed. Their distinctive parameters are withheld, accessible only through a paywalled interface like ChatGPT. In general, users and developers must take what they're given, accepting the limitations imposed by a handful of big tech firms, including to the chagrin of Republican policymakers, their political and cultural biases.

11:22Asked about DeepSeek, artificial intelligence, and crypto czar David Sachs argues that predominantly closed-source U.S. firms dropped the ball by focusing on content moderation instead of competition. They wasted a lot of time on things like DEI and woke AI, he said. The models were basically producing things like Black George Washington. All models embed the values and design choices of the labs that developed them, as well as biases in their training data and vulnerabilities in their architecture. But it's difficult to reconcile these contradictions. Policymakers fret about Beijing free-riding on U.S.

11:53industry and exporting ideology in open-source models, while blaming U.S. firms for censoring their black-box models. These comments reflect a wider tension in Washington over whether open technology is a boon for transparency and competition in AI, or a windfall for America's adversaries. As Hawley wrote to Meta following the release of its Open Llama model, centralized AI models can be more effectively updated and controlled to prevent and respond to abuse. Yet because DeepSeek released its model openly, developers can look under the hood, modify its behaviors and substitute alternative values.

12:24That's a good thing, since their R1 model appears to be equally capable, more efficient, cheaper to run, and free to use compared to leading U.S. models. With these advantages, DeepSeq's models could become the default engines that power the next generation of AI applications. That means there's a real possibility that China-regulated and censored models might determine the search results or social media feeds of billions of people around the globe. But open technology isn't guaranteed. Like OpenAI before it, DeepSeek could choose to keep its future models behind a paywall, succumbing perhaps to commercial pressure or a regulatory crackdown in Beijing.

12:58If the world develops a reliance on closed-source Chinese models accessed through a paywall, we will inherit their warped behaviors too. That is why the world needs a steady supply of competitive open-source alternatives that can be inspected, modified, and localized. The U.S. is an indispensable part of that supply chain, both directly through our own open models, like Meta's Lama, and indirectly through chips, research, data, and capital. There are risks. Open technology can be misused, and upstream firms may have little control over downstream development. But if the U.S. government turns off the tap, it will promote a global reliance on Chinese technology from labs regulated by the Chinese Communist Party.

13:35It will erode the influence of U.S. firms abroad and displace U.S.-trained, U.S.-aligned, and U.S.-regulated models from the world's AI systems. Instead of pulling up the drawbridge, the U.S. should commit to ensuring that powerful models remain openly available. Ubiquity is a matter of national security. Retreating behind paywalls will leave a vacuum filled by strategic adversaries. Washington should treat open technology not as a vector for Chinese Communist Party propaganda, but as a vessel to transmit U.S. influence abroad, molding the global ecosystem around U.S. industry. If DeepSeek is China's open-source Sputnik moment, we need a legislative environment that supports, not criminalizes, an American open source moon landing.

14:39has to do with the fact that traditional political affiliations won't always line up with the policies that people are looking for. Still, I think that the underlying theme of these pieces, and many others that have been written since the launch of DeepSeek, comes down to a single salient idea. That in the future that we are in, the future that we are headed into, open source is soft power. I think the concern that many have is that the natural place for the US to play, which is open and free, is being taken up by China, but really, they're open is a trick because it's not truly open. It's open, but only with the facts that the CCP wants you to believe.

15:14To the extent that we believe that models are going to shape truth in the coming decades, this is actually a meaningful area of concern. Anyways, guys, lots to chew on there. Apologies for not having a longer analysis, but we'll be back next week. Until then, appreciate you listening as always. Peace.

15:34Thank you.