A New Success Model for AI Development? DeepSeek and Dynamic Capability
US semiconductor sanctions becoming a catalyst for promoting corporate innovation—such is the interesting case of DeepSeek. This article explains how DeepSeek achieved low-cost, high-efficiency AI development from the perspective of dynamic capability behind it.
What is Dynamic Capability?
First, let’s briefly review what dynamic capability is. This concept refers to a company’s ability to adapt to environmental changes and create new value. Specifically, it includes the following three processes:
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The ability to recognize and adapt to environmental changes
Example: Quickly catching market and technological changes and reconstructing strategy. -
The ability to redeploy resources and capabilities
Example: Reviewing existing resources and optimizing them for new situations. -
The ability to drive sustainable innovation
Example: Securing competitive advantage through new technology development and process improvement.
The “Environmental Change” of Sanctions Faced by DeepSeek
The US semiconductor sanctions faced by DeepSeek had a significant impact on business activities. For example:
- Difficulty in procuring high-performance semiconductors
- Concerns about rising development costs
- Risk of declining competitiveness in the global competitive environment
These may appear as “headwinds” on the surface, but they became an opportunity for new growth for DeepSeek.
Achieving Low Cost and High Efficiency: Keys to Success
So how did DeepSeek turn this “crisis” into an “opportunity”? The following factors are believed to have supported their success.
1. Resource Optimization
DeepSeek turned constraints to their advantage by focusing on efficient resource utilization.
- Utilizing Open Source Technology
Adopting open source AI frameworks and general-purpose technologies as alternatives to expensive specialized hardware. - Developing Efficient Algorithms
Designing lightweight AI algorithms that maximize computational resources.
2. Building a Unique Ecosystem
Reconstructing domestic and international supply chains to secure alternative sources of semiconductors. This achieved cost reduction and technological independence.
3. Promoting Innovation
As a result of seeking new solutions with flexible thinking, not bound by conventional methods triggered by sanctions, technological capabilities were further enhanced.
DeepSeek as a Success Example of Dynamic Capability
The case of DeepSeek proves the importance of dynamic capability. Specifically:
- Rapid Adaptation to External Shocks
Building new competitive advantages in response to the unfavorable environment of sanctions. - Resource Reuse
Achieving cost reduction and efficiency by pursuing efficiency within constraints. - Sustainable Innovation
Improving competitiveness from a long-term perspective.
Summary: The Possibility of Evolution Brought by Sanctions
DeepSeek’s success demonstrates the power of business strategy and innovation that turns headwinds into opportunities. This is not merely “adaptation” but the very essence of dynamic capability that achieves new growth as a company.
The fact that semiconductor sanctions, a constraint, ultimately became an opportunity to draw out new technological capabilities and efficiency is a lesson rich in implications for many companies.
“Crisis is an opportunity for change”
Isn’t DeepSeek’s case a demonstration of these words?