The rise of DeepSeek shocked the world, but what does it mean for directors?

The rapid rise of Chinese AI company DeepSeek has shocked the world, and might be AI's "Sputnik moment", but what does it mean for directors?

Stock market tumbles and panic in Silicon Valley are not the only consequences of DeepSeek's sudden prominence - it also raises questions over data security and the frenetic pace of change in the AI industry, all of which directors need to keep an eye on.

Less than a week after its launch, the app topped US download charts and recieved so much traffic that it struggled to keep up with demand. However, questions were immediately raised over the app's data security - in particular, the fact that all the information it collects is stored in servers located in China caused serious concern over its data protection implications.

Many have also pointed out the risks of misinformation and inaccuracy in the app's outputs. While it appears to be vulnerable to the same inaccuracies as the major AI platforms, the app reportedly also censors itself when pressed on sensitive political topics in China, such as the 1989 Tiananmen Square protests. Any individuals or companies relying on DeepSeek's output will therefore have to carefully verify the veracity of any information it generates.

At L-EV8, we've been warning that modern boards lack enough non-executive directors that have experience with AI, and DeepSeek's surge to the top is just the latest and greatest example of the dangers of being unprepared. How boards react to the rise of DeepSeek and similar disruptive AI platforms, and what they do to mitigate the potential risks to their company, will be determined by the expertise of their members.

The way that companies adapt to future quick shifts in the AI landscape might become the defining feature of corporate governance over the next decade. Reach out to us to learn how we can help you to prepare.