By Matt Hirst
The recent emergence of DeepSeek, a Chinese artificial intelligence (AI) startup, sent shockwaves through the global technological landscape. NVidia, the US chipmaker, shed nearly $600bn (£484bn) in its share price, the largest drop in share price in one single day in US history. Broadcom and Taiwan Semiconductor Manufacturing Company also saw their shares slide 17% and 13% respectively. As the inter-imperialist conflict between the US and China continues, is AI the new ‘space race’, and if so, what does it mean?
AI is not something new. The first ever autonomous chess ‘player’ was designed and made in 1912, however there have been significant strides in technological development over the last decade. Most people will be familiar with the ‘public face’ of AI using ChatGPT and other large language models (LLM), but it is already being used in many facets of work, and could revolutionise workloads for millions of workers around the world.
However, under capitalism, AI has become a new part of the tech war between the US and China, not just about the kudos of who is developing more advanced chips, but about who can profit most out of AI. But this will create its own contradictions under capitalism. The concentration of capital around tech firms has ballooned over the last few years – the largest ten stocks account for almost two-fifths of the S&P 500. All of the top seven are tech firms.
The concentration of capital to such a magnitude has created a tech bubble which may burst at any moment. This is all the more likely when AI companies like OpenAI, the company behind ChatGPT, admits it makes zero profit from ChatGPT. The plummeting US stocks, particularly in tech firms after the launch of DeepSeek, is a small example of the precarious conditions the ‘free market’ creates. Capitalists look to hedge bets on the fictitious capital of the stock market on companies that don’t even make a profit, rather that investing in things that people actually need.
But it is not just about money. The US in particular turned many of the developments within AI towards a ‘security-first’ agenda. The 2019 Executive Order on Maintaining Leadership in Artificial Intelligence, passed in Trump’s first presidency, was a formal declaration that the US viewed AI not just as an economic asset, but as a national interest of strategic importance, focusing on the funding of AI research and development, while at the same time restricting Chinese AI firms.
AI was no longer just about capitalist ‘innovation’ – it was about hegemony. Whoever had the fastest and smallest chips would win, and many of the tariffs that Trump and Biden previously imposed on China were to restrict its development of microprocessors, such as the CHIPS Act. In the creation of DeepSeek, as well as other LLM models by companies like ByteDance and Alibaba, it would indicate that China has been able to level the playing field with inferior processors.
The UK is also wanting to develop AI technology, with Rachel Reeves recently announcing her plans to create a ‘silicon valley’ between Oxford and Cambridge, to generate growth in a weak economy. But the vast sums of money invested in US firms like OpenAI, and the lack of anything concretely useful to show for it, exemplifies the vast waste under capitalism.
Rather than developing AI to benefit workers, it is used to create gimmicky products that ultimately don’t benefit society, and cause devastating damage to the climate. The data centres that house AI servers produce electronic waste. They are large consumers of water, which is becoming scarce in many places. They rely on critical minerals and rare elements, which are often mined unsustainably, and is a major factor in many of the wars across Africa for example, which has many of the much-needed minerals in its soil. And they use massive amounts of electricity, spurring the emission of planet-warming greenhouse gases.
As it currently stands, AI is only set to enrich a very small group of capitalists, and increase the number of conflicts around the world. However, in a society where everyone enjoys a secure standard of living and industries are democratically planned and managed by the working class, technologies like AI could enhance our daily lives.
The greater productive power enabled by automation could be harnessed to reduce working hours, improve wages, and create more free time. Achieving this would require a complete break from capitalism, with democratic public ownership of major tech companies, banks, and monopolies, and developed in a way that does not continue to damage the planet.
