DeepSea(ek) Trouble: Dangerous Waters Ahead

31 January, 2025

If you were distracted this week by the noise out of the Trump administration on blaming DEI for a tragic plane crash, retribution stories, or the outraged reactions to testimonies of those he’s nominated for positions of power, or the varied opinions on Deepseek’s new AI model -and you missed the news about the very core of Europe’s digital infrastructure being under attack - I wouldn’t blame you.

Theatrics and outrage tend to trump reality. And frankly, stories about undersea cables aren’t exactly scintillating (we need to change that!)

But the reality is that Europe’s vulnerable. And it is that boring infrastructure which lets us put cool pictures and stories on social media, transact with our banks, interconnect our banks. It lets us email clients, call our family and friends, or decline that one cousin’s facetime who always wants to borrow a few bucks.

So, add up a distracted United States, Europe and the world trying to figure out who holds decision making powers there with the sudden increase in attacks on those undersea cables, and the Deepseek launch (with questionable privacy controls and a lack of clarity on what data the AI was trained on) — and it equals a wake up call for what we need to pay attention to as regular, everyday people.

The rules of engagement, whether it’s in business, our economy, our defense and security have changed. Following a leader blindly doesn’t really work anymore. Those who haven’t realised how the new power play works, or how (whether we are interested in politics or world affairs or not) it impacts a country, a region, people’s jobs, security and finances are going to wake with a rude shock one day. And it is going to be less about NVIDIA’s stock price and more about the war on our real economy.

Bombs, guns, tanks? That’s old school power play.

Gas supply cut offs, tariff wars, misinformation and disinformation? A little more sophisticated — but still a boomer, GenX or even an older Gen Y move.

This global power struggle just went Gen Z.

Someone tell the crotchety old warmongers please.

Europe’s Cable Wars

The Baltic Sea has been a battlefield for undersea infrastructure since Russia’s full-scale invasion of Ukraine in 2022. At least 11 Baltic cables have been damaged in 15 months, but over December and January things have escalated just a notch. They’ve been mysteriously snapping at an alarming rate.

🔹 Damage to a cable connecting Lithuania and Sweden

🔹 Damage to a cable connecting Germany and Finland

🔹 Most recently, damage to a number of cables linking Estonia and Finland

In response:

🔹 The Swedish coast guard boarded a ship suspected of dragging its anchor to sabotage critical power and telecom cables. Latvia sent a warship to investigate fiber-optic damage. A Bulgarian vessel is under scrutiny.

🔹 Finland seized a Russian-linked oil tanker while investigating the cable severing between Estonia and Finland

🔹 A Norwegian cargo ship, with an all-Russian crew, has been seized this week in the investigation of the Latvian-Swedish fiber-optic cable damage.

These cables are not just about internet speeds and Zoom calls—they’re the backbone of Europe’s economy, financial markets, and military coordination. They transport gas, electricity, and data across borders. And recent incidents have led to a reduction in the capacity of electricity that can be transported, although this has not yet caused widespread power outages. Another concern is that damage to internet cables can hold up the passage of information generated by the financial markets.

Whether it’s a “misplaced” anchor or something more deliberate, the result is the same: disruption, chaos, and a whole lot of finger-pointing.

Russia says its got nothing to do with it, But there have been credible reports that Russia has actively been mapping undersea infrastructure.

China’s denied any involvement.

Some commentators have said these are simply accidents. The US Senate wants an investigation, though the new administration is strangely quiet on the matter. Europe has made speeches. While NATO has kicked off the Baltic Sentry 2025 (finally) in January. What is the Baltic Sentry and why does it matter? Read more at the UK Defence Journal

Click to see full and detailed map from TeleGeography

According to TeleGeography’s Submarine Cable Map, the Baltic Sea region is interconnected by numerous submarine cables, among them are:

• Baltic Sea Submarine Cable: Connecting Tallinn, Estonia; Helsinki, Finland; and Stockholm, Sweden

• C-Lion1: Linking Finland and Germany

• BCS East-West Interlink: Connecting Sventoji, Lithuania, to Katthammarsvik, Sweden

• SwePol: Connecting Sweden and Poland

The Women Leading the Fight

While the usual bureaucratic crowd issues stern warnings combined with a lot of finger wagging - the real battle to keep Europe online is being led by three women who aren’t here for the theatrics: Finnish Foreign Minister Elina Valtonen, Latvian Prime Minister Evika Siliņa, and Swedish Foreign Minister Maria Malmer Stenergard.

Valtonen has been blunt—Russia is a long-term threat, and NATO needs to stop dithering on much needed action. The Baltic Sentry is just a small step.

Siliņa, whose country has been hit by multiple attacks, has Latvia’s divers pulling evidence from the latest strike while pushing for stronger countermeasures.

And Stenergard? She’s already called out China for stonewalling investigations. Back in December 2024, she openly criticized Beijing’s lack of cooperation regarding a Chinese ship that just ‘happened’ to be lingering in Kattegat during one of the incidents.

Meanwhile, Sweden—the newest member of NATO —has pledged to contribute to the alliance’s Baltic security efforts, recognizing that securing undersea infrastructure is just as important as deterring traditional military threats.

The problem? While these leaders push for real action, Europe’s usual dithering isn’t helping. There have been the usual announcements and pronouncements from Ursula von der Leyen’s office, lacking action with actual teeth. Poland is convinced these attacks have Moscow’s fingerprints all over them, but that contradicts the pro-Russian EU governments of its neighbours. NATO has finally labeled the Baltic Sea a critical security zone, but concrete deterrence? Still a work in progress.

Finland is pointing out (not wrongly) that if this is NOT war, it sure looks like one.

One thing is certain—Valtonen, Siliņa, and Stenergard aren’t waiting for Europe’s bureaucrats to finish their coffee. They know that whoever controls the cables, controls the future. And they’re making sure Europe stays connected.

Undersea cables are fiber-optic cables laid on the ocean floor that carry over 95% of global internet traffic, enabling emails, video calls, and financial transactions across continents. With speeds reaching multiple terabits per second, a single cable can handle millions of simultaneous users. Around 485 cables stretch over 900,000 miles, spanning oceans and key chokepoints like the Suez Canal. Encased in protective layers, these cables—no wider than a garden hose—are vital yet vulnerable, facing risks from fishing, ship anchors, and sabotage.

AI Panic: DeepSeek Rocks the Boat

Then let’s talk about DeepSeek —the new Chinese AI system that can outpace U.S. models at a fraction of the cost. It was launched a few days ago.

What’s DeepSeek? A Chinese AI company founded two years ago by hedge fund investor Liang Wenfeng, claiming it can match ChatGPT-4 for pennies on the dollar. $10 million to quote them. For context, OpenAI reportedly spent $3B last year on training alone, plus another $4B on computing power - as reported by The Information.

Cue, the Hysteria.

• The entire AI industry lost its cool, wiping $ 1 trillion off the US stock market overnight.

• NVIDIA (whose AI powering chips have been the hottest thing in tech) and Google’s stock plummeted.

• Meta has created a war room to figure out what Deepseek’s all about.

• ChatGPT creators OpenAI immediately started digging into Deepseek’s AI model — most recently claiming they’ve found evidence DeepSeek used the US company’s proprietary models to train its own open-source model - hence growing concerns over a potential breach of intellectual property.

• The U.S. Navy has banned its use, citing security concerns.

• The U.K government is probing the company.

• The Italians seem to have blocked the app on both Google Play and Apple.

• Vicki Brady, the Australian CEO of a major DeepSeek rival Telstra has questioned the Chinese AI start-up’s claims of how cheaply they trained their model. But then again, she has good reason to be a tad miffed. It was just mid-January, when Vicki announced plans to spend AUS $700 million – over the next 7 years to ramp up Telstra’s data and AI capabilities in a joint venture with Accenture. Ouch!

The incumbents see it of course as a threat considering the collosal sums that have been invested. (Sam Altman famously told an audience of techies in India, not long ago — they could try to create their own AI, but it would be a waste of time)

One thing is certain - the AI industry has had a wake up call. If you look beyond the ‘it’s selling Chinese propaganda’ rhetoric, or threats of ‘China’s data collection’ (which seemingly falls on deaf ears anyway - anyone remember TikTok’s ban leading to young Americans mass migrating to China’s Rednote?) — Some have seen the cost base of Deepseek as a wake-up call for the AI industry in the west. Call it what you want - a second mover advantage, copycat — the truth is - the barrier to entry, just got cheaper - hello competition!

Who are you calling hysterical and emotional?

But in this hysterical echochamber, one company and one woman’s reaction has stood out (and not just to me) —Amy Hood, Microsoft’s CFO. She wasn’t fazed.

In a calm, measured internal memo to her team, she simply said: FOCUS. While the competition freaked out, Hood’s message to her team was clear: Stay the course, keep innovating, and stay true to Microsoft’s AI vision.

PS:

I did download Deepseek. As did a friend of mine.

I personally did not move to create an account, as soon as Deepseek would not let Apple block my details while registering (I have a thing about privacy).

We did download it on my friend’s phone (who has no such privacy compunctions). It’s fast—faster than ChatGPT-4. But it sees the world through a CCP lens. Ask it certain historical questions, and it suddenly develops amnesia. Also? It currently discloses way too much about how it sources information. (It’s like an AI kindergartener—smart, but not subtle.)

I’m guessing by mid-week, it will be older and wiser than Dolly Parton.

Movers & Shakers

🇯🇵 Japan’s boardrooms just got a little less predictable.

• For the first time ever: JPMorgan Asset Management Japan will be led by a woman. Kaguya Komatsu steps into the CEO role on March 1, a milestone in a country still battling a deep gender gap in leadership and pay.

• And for the first time in its 80 year history Sony Corp. has appointed a female CFO; naming Lin Tao as its new Chief Financial Officer.

🇮🇳 Global PR powerhouse FleishmanHillard has named Madhulika Ojha as Managing Director, India, charging her with driving growth, strategy, and transformation in this critical market.

🇺🇸 History is in the making: Gunjan Kedia is set to become the first woman of color to run a major U.S. bank. Come April, U.S. Bancorp—the country’s fifth-largest lender—will name her CEO. Finally, leadership in finance is getting the shake-up it desperately needs and at a time when DEI has become a banned word.

🇦🇺 In a powerful move, K2 Asset Management and East Coast Capital Management have each appointed a woman to the CEO chair. Hollie Wight was announced as K2’s new leader, after 25 years as managing director and head of trustee services. Over at ECCM, Simone Haslinger kicked off as CEO, ready to fuel growth and lead the charge in expanding assets under management. Two CEOs, two power plays, and a whole lot of glass ceilings getting shattered.