Video Update - Is DeepSeek A "Sputnik Moment" For AI?

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Good morning, folks. It’s Monday as I write this, and there’s big news shaking up the tech world. It’s all about something called DeepSeek. Like most of you, I hadn’t heard of this until late last week when news broke that a Chinese company, almost as a side project, developed an AI program. And it’s not just any AI—it’s being compared to the likes of ChatGPT, Claude, and Google’s Gemini. But here’s the kicker: they’ve trained it in an entirely different way.

Unlike the U.S. approach of cramming AI full of massive amounts of data, a process that’s resource-heavy and energy-intensive, the Chinese company took a cheaper and more innovative path. They taught the AI the same way you’d teach schoolchildren—trial and error. Let it stumble and fumble its way through problems until it learned to get the right answer on its own. And here’s the part that’s got everyone buzzing: it works. In fact, it works as well, if not better, than our leading models here in the United States.

Now, before we start panicking, let’s take a step back. I’ve been down this road with China before. They’re no strangers to claims of breakthroughs, often backed by some less-than-transparent practices. There’s always a chance they’re working with stolen source code or propping up the project with hidden resources. I’m skeptical of any news coming out of China, and you should be too. But if this is legit, it’s a big deal—a Sputnik moment, as my son-in-law, Garrett Baldwin, aptly put it.

For those who need a refresher, Sputnik was the wake-up call America got in 1957 when the Soviets launched the first satellite into space. Back then, we thought we were unbeatable—technologically, militarily, financially. Then one morning, the Soviets showed the world that they were ahead in the space race. It forced the U.S. to buckle down and innovate, leading to a series of incredible advancements, from moon landings to missile technology. That same energy is what we’ll need now if DeepSeek really puts us behind in the AI race.

Why does this matter so much? Because whoever gets to artificial general intelligence (AGI) first essentially wins the future. If you crack AGI, you’re likely on the fast track to quantum computing and even nuclear fusion. Get there first, and you’ll have a lock on cracking any encryption, solving any code, and dominating the tech landscape. It’s a winner-takes-all game.

So, What Should We Do?

Here’s the part where all my colleagues in the financial media will have their "emergency action plans." You’ll hear stern voices and see the obligatory raised eyebrows. There will be urgent steps you “must take now.” Let me save you the drama: don’t fall for it. Right now, we don’t know enough about DeepSeek. It’s brand-new information, and no one—not the government, not the tech giants—really understands the full implications yet.

What I do know is this: if you’ve been following our strategy of focusing on undervalued banks and real estate investment trusts (REITs), you’re in the driver’s seat. While tech stocks are getting whacked today—Nasdaq is down around 3%—our portfolios are sitting pretty. Every single REIT we own is up. The total return portfolio is having a solid day, with gains across the board. So, grab a cup of coffee and relax. There’s no need to panic.

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