Can DeepSeek give startups in competitive markets a fighting chance?

As bans on DeepSeek begin to surface worldwide, concerns over data privacy and access have taken center stage for global governments. While skepticism surrounding DeepSeek's privacy policies is justified, there is another perspective—one that sees DeepSeek as a turning point in AI development.

We spoke with Sailesh Kumar, Sr. Product Manager at Dealertrack Canada, to discuss how DeepSeek is leveling the playing field for new AI players and driving innovations that should be embraced rather than feared. Dealertrack is a leading automotive F&I software provider powering Canada's largest credit network.

Democratization of AI: "What DeepSeek did was democratize AI development. It showed the world that the barrier to entry is significantly lower than what the tech landscape assumed it to be," Kumar says. 

With just around $6 million in development costs, DeepSeek has challenged the assumption that only tech giants with billions in resources—such as OpenAI, Meta, and Microsoft—can lead in AI advancements. "This challenges the assumption that top-tier AI requires a bottomless wallet. This challenged the ROI for large-scale multi year AI Investments."

By proving that sophisticated AI models can be built with significantly fewer resources, Kumar says, "This would be the trigger for a shift towards prioritizing efficiency over infrastructure."

Energy efficiency: Beyond cost, DeepSeek’s energy efficiency claims are drawing attention from AI leaders and conscious consumers alike. "DeepSeek’s claim of using up to 75% less energy is a potential game-changer," Kumar explains. "This could drive the industry toward more sustainable AI practices and challenge the reliance on power-hungry hardware."

Kumar follows up with the idea that even DeepSeek’s choice in Nvidia’s chips are a sign that more can be done with less: "DeepSeek's bet on Nvidia H800 chips over the more common H100s suggests that efficient AI doesn't necessarily require the most powerful (and energy-intensive) hardware."

Chinese relations: "DeepSeek’s association with China and its data handling practices raise important privacy questions," answers Kumar when prompted about international privacy concerns around DeepSeek’s implementation. He adds, "There is deliberate lack of details about data retention and the suspicious absence of an opt-out mechanism for data collection are causes for concern, particularly given China’s cybersecurity laws."

Looking at how DeepSeek impacts governance and AI as a whole, Kumar sets the scene: "This highlights the ongoing tension between AI development and privacy in a global context."

Awakening to AI’s potential: Despite the concerns, DeepSeek has the potential to change the momentum of AI development for the better. "DeepSeek's rise itself is disruptive. It is challenging the so-called established industry norms, shifting the focus to efficiency and sustainability over complexity and hardware," Kumar says. "It also reignites crucial conversations about data privacy and user control, while challenging the hegemony of AI with United States of America. Now the nations around the world and organizations without deep pockets have suddenly woken up to realize the power of AI."