Practical realism as Microsoft incorporates China’s DeepSeek model in its cloud computing Azure offerings: “In a move that signals a shift in its artificial intelligence strategy, Microsoft has made Chinese startup DeepSeek’s R1 AI model available on its Azure cloud platform and GitHub, the company announced.”
In Tekedia Institute, I teach a course on Business Model. Largely, I consider a company’s business model as the most important component in the business. Yes, it is the logic of the firm which defines how companies capture value in the market.
And when you go deeper, the Board has one core job: hire a CEO and help build an executive management that will discover the best business model for a company. A company’s business model is so catalytic that a bad one can destroy a great “product or service”, and there is no future in a firm running on a wrong business model.
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The current CEO of Microsoft (Satya Nadella) is a great business model zen-master. I used him and Microsoft in the course’s case study. When he became the CEO of Microsoft about a decade ago, the market cap was less than $400 billion. Quickly, he ramped things up, and took the company to $1 trillion and now it is about $3.1 trillion.
What happened? The former CEO before him was a purist as he defended why Microsoft Office and other products must not be prioritized to work seamlessly in Apple iOS and Android ecosystems, because he was still expecting the Windows Mobile to evolve and take over. Even though more than 1 billion iPhone users were asking for these products, he did not care that much.
But when Satya came, he pursued a frenemy playbook – we can be friends and enemies when necessary. He just did it again by incorporating a Chinese AI model in his core product, discarding the purity which many arrogant leaders will push: do not touch it because it is from China, it has no privacy, etc. But here, Satya is already making money on the Chinese model even before those folks figure out how to launch a checkout page. That is why Microsoft is rising: it has a realistic and practical leader
DeepSeek released R1
And it leaves ChatGPT o1 behind.
– DeepSeek R1 is 100% Opensource
– Performance on par with OpenAI-o1
– MIT licensed: Distill & commercialize freely!
– API is 96.4% cheaper than ChatGPT
Meanwhile, OpenAI CEO, Sam Altman, according to LinkedIn, is having a busy Thursday in Washington, D.C. During a meeting with policy makers, the OpenAI CEO reportedly used the rise of DeepSeek to urge more American investment in artificial intelligence. Later, Altman announced a partnership with the U.S. National Laboratories that will see one of OpenAI’s models installed on their Venado supercomputer. Meanwhile, the Financial Times reports, citing anonymous sources, that SoftBank is weighing a $25 billion investment in the startup.
Source materials from https://lnkd.in/dMNkVWGt
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