DeepSeek vs. Hyperscalers: The Economics Behind the AI Arms Race

In this episode, we speak the truth about the real impact of DeepSeek AI and the broader Chinese AI industry. We unpack Chinese AI’s efficiency-first play, from DeepSeek’s open-weight model that spooked markets to the U.S. hyperscalers’ record capex binge. Scaling laws have delivered gains, but an open, lean approach can erode margins and reset expectations about what “enough compute” really means. Investors should ask whether today’s massive spending produces lasting value or fuels a costly race that ends in margin pressure and consolidation.