Yes and no. American companies have been following OpenAI's strategy, which is simply scaling up as quickly as possible. From massive data centers swallowing our drinking water for coolant to coal and natural gas power plants to keep it running, it's been all about pouring as much money and resources as possible in order to scale up to improve their models.

What DeepSeek has done is prove that that's the wrong way to go about it, and now suddenly, all these companies that have been a massive money sink without any clear path to profitability already have to completely pivot their strategy. Most will probably die before they can. Investors are already selling off their stock.

So AI will become closer to actually being practical/profitable, but I imagine most of the companies who reach that goal won't be the companies that exist today, and the AI bubble itself will probably collapse from this pivot, if we're lucky.

Since DeepSeek is also open source, we might even see free competitors that can be run locally pop up that can go toe to toe with the likes of ChatGPT, which would be a real stake through the heart for these massive companies.