DeepSeek’s ‘Open AI’ Should Terrify Sam Altman

Since launching ChatGPT two years ago, OpenAI Chief Executive Sam Altman has maintained that his business is fueled by a few key ingredients: chips, data and money. The more of those three elements you shovel into his firm, like coal into a steam train’s furnace, the more powerful artificial intelligence it will produce. Enter a tiny company from China called DeepSeek to blow a hole in that formula, with an AI model that’s just as powerful and built for a fraction of the cost. But there’s more to this David and Goliath story than just one company — or even China.

Across the world, similar open-source models are being built, ready to eat into Altman’s market share with systems that are vastly cheaper or even free to use. That’s an unnerving prospect for businesses like OpenAI and Anthropic, whose primary path to profitability is selling access to a foundation model for a higher price. (Alphabet Inc.’s Google and Microsoft Corp. at least have cloud and software businesses to fall back on.) Publicly available models like DeepSeek might not reign supreme in the end, but they could win an uncomfortably large share of the pie, and fulfill promises1 that Altman has neglected around openness and collaboration.