DeepSeek Wins, Then Loses
Key Points
- DeepSeek shifted the AI market’s Overton window toward free, transparent, and open‑source solutions, redefining what users expect.
- OpenAI countered by exposing features like Chain‑of‑Thought, expanding free‑tier offerings such as Deep Research, and pledging unlimited free chat with GPT‑5.
- Backed by SoftBank’s $40 billion deal, OpenAI can aggressively burn cash to copy DeepSeek’s innovations and retain dominance.
- While out‑maneuvered in the U.S., DeepSeek may still find growth in regions where OpenAI lacks presence (e.g., China, Russia), reflecting a classic challenger‑dominant brand dynamic.
Full Transcript
# DeepSeek Wins, Then Loses **Source:** [https://www.youtube.com/watch?v=QceIVRteTZE](https://www.youtube.com/watch?v=QceIVRteTZE) **Duration:** 00:05:16 ## Summary - DeepSeek shifted the AI market’s Overton window toward free, transparent, and open‑source solutions, redefining what users expect. - OpenAI countered by exposing features like Chain‑of‑Thought, expanding free‑tier offerings such as Deep Research, and pledging unlimited free chat with GPT‑5. - Backed by SoftBank’s $40 billion deal, OpenAI can aggressively burn cash to copy DeepSeek’s innovations and retain dominance. - While out‑maneuvered in the U.S., DeepSeek may still find growth in regions where OpenAI lacks presence (e.g., China, Russia), reflecting a classic challenger‑dominant brand dynamic. ## Sections - [00:00:00](https://www.youtube.com/watch?v=QceIVRteTZE&t=0s) **DeepSeek Shifts Overton, OpenAI Responds** - The speaker argues DeepSeek’s open‑source push is winning the AI race, prompting OpenAI to make more tools free and pledge a free unlimited‑chat GPT‑5. ## Full Transcript
so I've been thinking about Chad GPT 5
and I think my top takeaway is that deep
seek won and they lost and I'm so I'm
going to explain what I mean deep seek
won by Shifting the entire window of
conversation what we would call the
Overton window toward free and
transparent and more open source they
lost because the bigger players in the
space can afford to dig themselves a
deep poll Cashwise to mimic what deep
seek is doing for free and so what you
see in the last few weeks really
underlines how open AI is responding
super aggressively to deep seek they've
started to expose Chain of Thought and I
know I know it's not the same as the
private Chain of Thought on open AI I
don't think most people
care they've started to expose Chain of
Thought they've moved to make their
premium products somewhat more free so
the latest one of those is deep research
which is now going to be available on
the free tier I think it's two uses a
week and on the plus tier at 10 uses a
week huge win and they are moving to
make sure future product releases are
also prioritizing free usage when Sam
Alman laid out his chat GPT road map
yesterday I talked about it here he said
explicitly GPT 5 will be free unlimited
chat now you may sit there as you know a
technical person and say well what does
that mean chat could mean a lot of
things I agree with you chat could mean
a lot of things it is possible that we
will have to purchase the agent usage
and the chat usage will be free it's
possible the whole thing will be free
and they'll make their money off of
Corporations I'm not sure uh heck maybe
maybe they'll have a closed model and
like some of the conspiracy theories say
they'll just make money off the stock
market I don't know uh but the point
is they are choosing to aggressively
burn cash to make sure that they
continue to compete on market share and
thanks to SoftBank and the $40 billion
deal that they're about to close with
chat GPT they can afford to do that
which means deep seek has changed the
entire game so in the sense they won by
resetting the rules but they lost
because they lost the new game you reset
the rules you showed the market values
free and transparent and then you lost
at that game now people will call out
and I think it's true that deep seek in
the US is not the same as deep seek
globally and so deep seek can close
deals in places where open AI is not
going to ever be dominant like China uh
or like Russia and they may well do that
and that is going to give them the space
to win in their own way so I don't want
you to hear this and say deep seek has
no way forward deep seek has no way to
win but I do think it's relevant to
observe that this is a classic business
Str strategy case study where the
Challenger brand changes the rules of
the game by showing what's possible and
then the dominant brand copies aspects
of the Challenger brand that Ena them to
win and crushes them because they have a
dominant spot that's exactly what's
happening with open Ai and deep seek
right now in the US and frankly it's a
master class uh and I don't say that
because I think that open ey has no
competition anymore or that the race is
over or that I think everything Sam
Alman does is great none of those things
are true uh I do think it is an
excellent example of business strategy
essentially opena I had to respond
quickly they did and as a result they
have now positioned themselves within
just a few weeks as the leader and the
standard setting Setter in providing
free usage of AI to everyone else and
they've done it without product I want
you to notice that Chad gp5 does not
exist yet none of us have used it yet
and it's still setting the terms of the
debate and it's going to set the terms
of the debate for others when Claude 4
which is rumored to be coming out
shortly comes out everyone is going to
immediately ask how does it compare to
open AI in chat
gp5 and that is deliberate that is
deliberate and so now anthropic is going
to have to look at their launch strategy
look at their pricing look at their
packaging relative to what Sam has
publicly said he will do with GPT 5 and
maybe change it up maybe make it more
free and so deep seeks influence keeps
being felt through the industry and I
think that's super
interesting so that's my take uh I wrote
a lot more on the strategy behind this
on substack if you want to check it out
I'll link it in the description here I
think at the end of the day to me the
strategy of what chat GPT 5 is going to
be is way way more interesting than the
actual news like sure we all knew chat
GPT 5 was coming it's coming in a few
months whoopy do but the strategy behind
that play is absolutely fascinating so I
hope I gave you a little peek here feel
free to look into the substack if you
like a much deeper look at it uh I had
fun I'm a strategy nerd so it's it's fun
to talk about cheers