Share this article
In 1969, Nucor opened its first mini steel mill in Darlington, SC. Its small electric furnaces produced steel from scrap cheaper and faster than the big integrated mills’ blast furnaces could from iron ore. Nucor disrupted the steel industry. Today, it’s the largest and most diversified steel company in North America, with a $45 billion market cap. Mini mills now account for 70% of all steel produced in the U.S. Former industry giant U.S. Steel has only two integrated mills left, a market cap of $8 billion, and is seeking to be acquired. Sic transit gloria.
Will Chinese company DeepSeek disrupt the giant artificial intelligence (AI) models the way Nucor disrupted the giant integrated steel mills? What could that mean for Mississippi? Here’s what: Giant AI models are driving the growth of data centers. If DeepSeek disrupts their competitive advantage, the growth of data centers may stall. That would be bad for Mississippi.
Amazon is spending $10 billion to build two giant data centers near Canton. Compass Datacenters recently announced it will spend $10 billion to build hyperscale data centers in Meridian. Other companies could build more data centers here to access electricity generated from natural gas pipelines crossing the state. Data centers require vast amounts of electricity to provide computing power for giant AI models. The more giant AI models there are, the more data centers are needed.
The $20 billion in data center investments represents a significant stimulus for Mississippi’s economy. Entergy is investing an additional $2+ billion to provide electricity for Amazon’s data centers. Mississippi Power says it will supply 500 MW of power to Compass (estimated cost $500 million). This money circulates through the economy and multiplies. Some of it stays here—and that’s good for Mississippi.
OpenAI is a leading developer of giant AI models. Microsoft and others have invested approximately $100 billion in its development since 2016. OpenAI’s ChatGPT is a popular app (I used it, DeepSeek, and other AI apps to get information for this article). Major players in giant AI models include Google’s DeepMind, Anthropic, Meta AI, Cohere, IBM’s Watsonx AI, and many others. Development costs for these AI giants may be in the $trillions. The President’s Stargate initiative proposes another $500 billion to ensure U.S. AI supremacy because of its perceived strategic value.
Giant AI models rely on special chips made by Nvidia. The U.S. has banned the sale of these chips to China. We smugly thought our technology and capital gave us an unassailable lead in AI—until last month when DeepSeek arrived on the scene. It jumped the technology and capital moats.
Sam Altman, cofounder of OpenAI, called DeepSeek a “Sputnik moment,” signaling a shift in the global AI race just as Sputnik did during the space race with Russia in 1957. DeepSeek highlights China’s growing competitiveness in AI. According to Altman, DeepSeek’s R1 model demonstrates impressive efficiency and achieves results comparable to OpenAI’s models at a fraction of the cost and computational resources. Altman said OpenAI must innovate
Read original article by clicking here.