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Essential Question: How does DeepSeek’s rise as an AI competitor challenge global tech dominance, and what does it reveal about the economic forces driving innovation, competition, and market disruption?
Part One: Reading Questions: Read the FT article Tech stocks slump as China’s DeepSeek stokes fears over AI spending and then answer the questions below.
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What triggered the slump in tech stocks mentioned in the article?
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What did famous technology investor Marc Andreessen mean by calling this an ‘AI Sputnik moment’?
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How did the news about DeepSeek impact broader market indices like the Nasdaq and S&P 500?
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Why did investors shift toward consumer staples stocks, such as Coca-Cola and Hershey, after the sell-off?
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How does the article compare the AI sell-off to the dotcom bubble (in the year 2000)?
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How do US government policies, like the chip export ban to China, affect global competition and innovation, and how might these policies backfire?
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According to the article, how might DeepSeek’s innovation ultimately benefit companies like Nvidia in the long run?
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What does this article teach us about the role of innovation in shaping markets and the global economy?
Part Two: Watch this video: DeepSeek AI chatbot sends shockwaves to Wall Street (3:00) and answer the following questions.
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How did DeepSeek manage to develop its AI chatbot for significantly less cost than US rivals like OpenAI?
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What role does energy usage play in AI development, and why is DeepSeek’s approach significant in this context?
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How does DeepSeek’s quick success in becoming the number one app on app stores highlight the role of consumer adoption in market competition?
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The video mentions the democratisation of AI. What does this mean, and why is it significant for global markets?
Part Three: Your Opinion
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Given the information from the article and video, do you believe DeepSeek’s emergence is ultimately a positive or negative development for the global economy? Take a side and make an argument using economic concepts such as competition, innovation, trade restrictions, and efficiency.
Joel Miller and James Redelsheimer, Foundation for Economic Education.
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