David Krause (Marquette U) has posted “DeepSeek and FinTech: The Democratization of AI and Its Global Implications” on SSRN. Here is the abstract:
DeepSeek, a Chinese AI company, has introduced a new paradigm in FinTech by making high-performing AI models accessible at significantly lower costs. This paper explores how DeepSeek’s cost-efficient and open-source approach is disrupting traditional AI development, lowering barriers to entry for startups, and fostering competition in financial services. The research highlights the transformative applications of democratized AI in lending, investment management, insurance, and payments, as well as the systemic challenges it presents, including regulatory concerns, ethical dilemmas, and geopolitical implications. Additionally, the paper examines the potential impact of DeepSeek on AI efficiency, energy consumption, and market dynamics. While DeepSeek’s success offers opportunities for financial inclusion and innovation, it also raises concerns about security, data governance, and the shifting balance of technological power. The findings underscore the need for global regulatory coordination and strategic adaptation in the FinTech sector.