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One month in and it’s been a high stakes start to 2025 in many ways. We have witnessed a “big freeze” (LOL!) which saw schools around Ireland close for up to a week in some cases and that was swiftly followed by the devastating impact of Storm Eowyn. For those in the east of the country that have perhaps forgotten, Storm Eowyn was a recent storm that wreaked havoc on much of rural Ireland – the response from our newly-elected-but-yet-to-sit government has been wholly insufficient – here we are 12 days later with many residences still without electricity and running water. Amazingly despite this fact, it’s no longer a story on the RTE homepage – the west doesn’t seem to matter. As long as the power is back on for holiday homes in Ballyconeely next summer, all is well!
Day 12. Map of the continuing loss of power in my part of the country this morning. #StormEowyn pic.twitter.com/JQqus88ctd
— Declan Ganley (@declanganley) February 4, 2025
While storms are somewhat anticipated in winter – Ireland never seems to be prepared. Another storm is on the horizon in the shape of the recently inaugurated President Donald Trump and there’s a sense of panic in Ireland, we seem to cower in fear – what will the big orange man do to us? – we need to change this posture, it’s not a good look! The same can be said for our state of readiness when it comes to economic developments, as we saw in the last recession, we are slow to react and when we do we tend to be apologetic and subservient. We need a bolder, more principled outlook as we continue into what is likely to be a year marked by further unpredictability and shocks. Take DeepSeek as an example – how prepared are we as an economy for such an innovation?
DeepSeek is an advanced Artificial Intelligence (AI) tool or algorithm designed for high-efficiency data processing and analysis. It is a new Chinese challenger to the likes of ChatGPT and Grok (owned by X) which has well and truly thrown the cat amongst the pigeons with respect to how the use of AI evolves.
There is much debate currently about data security and concerns around Chinese Communist Party censorship of events like the Tiananmen Square massacre. Any attempt by a state to censor information is a worry but the current debate focuses on ethics in a wildly unethical commercial environment and largely overlooks the most important aspect of the arrival of DeepSeek – the cat is out of the bag (no more cat references, I promise) and now tech companies realise the potential of reproducing DeepSeek’s approach.
This game-changing development has gone some way to levelling the playing field vs. the Big Six in tech. In effect, DeepSeek has developed their AI model for < USD$50 million, comparing to the billions spent in 2024 alone by the likes of Amazon ($10bn), Microsoft ($20bn), Meta ($10bn) and Google ($8bn) on GPU’s for AI. Innovation skittling big tech for less than 1% of what they spend should have a democratising effect on global commerce – for a while at least! Hopefully this is a sign of things to come with surprising innovation taking monopolistic multinationals by surprise.
DeepSeek has already wiped billions off the value of NVIDIA, as the stock price of the world’s third-largest market cap fell significantly over the last number of days. NVIDIA’s success has largely been down to demand for its market leading GPUs across the tech sector but vastly more efficient AI models are likely to require less processing power – so less GPUs. But then, there are far more questions to be answered about the authenticity of NVIDIA’s projections and valuation. Time will (soon) tell!
It might not be realised yet but DeepSeek is particularly relevant in an Irish context, given that the Irish government is fixated on making Ireland a hub for data centres for AI – already we have seen a moratorium put in place as we struggle to provide sufficient energy to power data centres. The reality remains that the current economic strategy of attracting data centres to Ireland is completely at odds with the climate & energy policy of the country, which commits to Climate Action targets which cannot be attained on the current trajectory. The penny has dropped on the fact that an over-reliance on fossil fuel jeopardises climate commitments while Irish consumers and businesses pay the highest prices in Europe for electricity – and this is likely to go higher on the back of infrastructural weaknesses again highlighted by the recent storm.
We are in a strange policy limbo in Ireland where the government are contracted to allow at least 11 more data centres to be built in Ireland – albeit with a moratorium in place – in a market that has been massively disrupted. Ireland’s government inertia in an era of rapid and continuing change is likely to have a negative impact on our economic prospects. We don’t know whether we are coming or going!
This challenge is further compounded by supply chain challenges affecting NVIDIA as it increases our reliance on big tech companies (who are at the head of the queue for GPU/TPU demand). Ireland Inc. simply won’t compete with the likes of Amazon and Meta for such components.
There is an opportunity for decentralisation and in-house compute clusters (e.g. ADAPT and CeADAR) but upfront capital costs and a low appetite for risk in Ireland are likely to mean this won’t be realised without significant government or EU funding. The sad reality is that we are too slow and too risk averse in Ireland to capitalise on tech opportunities.
Our economic over-reliance on corporate tax from US multinationals has Irish economic policy makers working up a sweat. Since his inauguration President Trump has gone on a trade warpath fullfilling elections promises by implementing tariffs on Mexico and Canada with Europe also in his crosshairs. It probably hasn't gone unnoticed that our current Minister for Trade, Simon Harris once labelled Trump an "awful gowl", which should set the scene nicely for when we go MAGA cap-in-hand to the annual St Patrick's Day visit to the White House or face into future trade talks. Perhaps Simon Harris and his cabinet colleagues will don matching MAGA headbands to cope with the perspiration!
Making Ireland Great Again may well be the shock wave of 2025!
The scars of the 2008/09 financial crises are still evident in Ireland – Storm Éowyn has blitzed our already ailing national grid and we have witnessed chronic underinvestment in domestic industries and national infrastructure outside of Dublin.
Ireland needs to be far better prepared to stand on our own two feet and far more realistic about our ability to deliver at the cutting-edge of technology and – dare I say it – we need to consider a more nationalistic mindset when it comes to our long-term economic resilience. At government level, our understanding of the tech landscape appears to be past its sell by date and in direct conflict with other policies – we are busy stalling on promises we can’t deliver and by the time we are ready to deliver, we could well have missed the boat.
Our current predicament and over-reliance on US tech in an era of Trumpian tariffs means we have to be willing to consider a pivot in economic strategy. But where to? Drilling for oil? It might sound crazy to some but indigenous industry is what we need – it seems ludicrous that we are so wedded to fossil fuel long-term yet we are not willing to explore our own natural resources. Necessity may well become the mother of invention!