This might hurt you to know, but China’s president Xi Jinping really isn’t as calculating as we’ve been made to believe. He might be “evil” at times, but he isn’t some mastermind that can actually do anything to America, otherwise he would’ve a very long time ago.
Why now, when the sitting US president Donald Trump is so infatuated with him? Realistically, China is not as powerful a threat to America. It never has been. A Hangzhou hedge fund, not the Chinese Communist Party (CCP), built DeepSeek, and that’s where the entire “Xi’s revenge” theory falls apart.
Sure DeepSeek R1, the AI model that started yesterday’s uber-insane frenzy, was designed to compete with giants like OpenAI and Anthropic, but its origins don’t point to government directives or some grand geopolitical chess move by President Xi Jinping.
Crypto elite Arthur Hayes tore into the propaganda in a post on X today, asking, “Why didn’t a big Chinese corporate or a government-funded project create DeepSeek? Why was it some random Hangzhou hedge fund?”
He then added a jab at the CCP’s well-known disdain for hedge funds, describing how frustrating it is to trade Chinese markets compared to their Western counterparts. Arthur summed up the situation: “This doesn’t sound like the way China likes to innovate.”
DeepSeek R1 challenges AI’s power structure
DeepSeek’s R1 competes with the likes of OpenAI’s GPT, Anthropic’s Claude, and Meta’s LLaMA while being built with older Nvidia chips, the kind the US still allows to be exported to China under sanctions.
That alone destroys the myth that cutting-edge AI requires cutting-edge GPUs. DeepSeek’s creators allegedly did it with less, and it worked. For years, tech giants have operated on the assumption that more money equals better AI. DeepSeek just tore that assumption apart.
According to Arthur, this proves that “money isn’t always the barrier to entry in AI anymore.” Smaller companies can now build competitive AI models without needing to match Google’s or Microsoft’s spending sprees.
But the real shocker? DeepSeek made parts of the R1 model public. It’s not entirely open-source, but it’s open enough for smaller companies to use it on their own servers.
Nvidia, the king of AI chips, saw its stock drop 17% after R1’s release. But the entire market crash is still so absurd to me. Do investors not realize that DeepSeek quite literally needs Nvidia to survive? There is no competition here, one cannot exist without the other.
So how does it make sense to abandon the lifeline for the shiny new toy?
The CCP’s role? Minimal, if any
Whichever way you look at it, DeepSeek is not something that would fit into Beijing’s agenda. China’s regulators, meanwhile, are busy pushing insurers to pump money into the stock market to stabilize equity prices.
A Jan. 28 report from the Financial Times said China asked state-owned insurers to allocate 30% of new policy premiums into stocks. Whether this will actually happen remains to be seen. Regardless, this effort has no connection to DeepSeek or its creators.
Western media hasn’t helped the narrative. They’ve labeled R1 “Chat(Xi)PT,” implying the model is nothing more than a propaganda tool. It’s an easy and quite hilarious jab, but it misses the point. Even if Xi had a role in this—and there’s no evidence he did—the focus wouldn’t be on “revenge.”
Beijing is more interested in controlling narratives, censorship, and maintaining its image than in retaliating against America.
DeepSeek’s openness, no matter how limited, will never get any support from Mr. Xi. Beijing prefers secrecy and control, and they’ll do anything to have it. This is why DeepSeek’s developers had to censor any information related to Xi. Check out my test run with it just now.
DeepSeek Testrun
These guys are likely scared for their lives having invented this thing because if you look at the video below, the AI is visibly fighting the censorship, but failing, which is good. Because Xi is not someone any Chinese person dreams of messing with.
As Arthur pointed out: “Once you start to question, your mind goes to dangerous places.” The implications of DeepSeek’s success extend to the broader economy. US markets, trading at 230% of GDP, are historically overvalued.
If investors lose confidence in these markets, where will the capital gains taxes come from? Arthur speculated that deficits could balloon to 7%, 8%, or even higher by 2028 if the market rotation happens.
But not everyone is panicking. Nvidia, despite its bad day, still holds a strong position in the market. Its proprietary coding language, CUDA, remains the standard for AI development. While R1 proves you can do more with less, Nvidia’s best chips are still valuable for leaner, more efficient models.
Wall Street’s Jim Cramer said today, “I am glad you all are satisfied with Deepseek. Can it be the next model? I think the thing is hallucinating like mad. I see the same thing I always see: our inferiority complex vs. the PRC, how much smarter and better they are. Same old, Same old, “We are idiots; they are smart… Yeah, yeah, sure, sure”
This articles is written by : Nermeen Nabil Khear Abdelmalak
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By Nermeen Nabil Khear 