AI and the Bridgetown Initiative

In his Socratic dialogue “The Republic” Plato wrote, “our need will be the real creator.” Faced with a dearth of high-end chips, Liang Wenfeng, a graduate of Zhejiang University built DeepSeek-R-1 using less advanced chips. Chip shortages lit the slow fuse of his imagination forcing him to use fewer chips than those used by Western tech giants to build his model. His open-source large language model also relies on “inference-time computing.” This means that DeepSeek-R-1 only activates each query’s most relevant portions of the model. DeepSeek-R-1 is a general-purpose reasoning model.

The LLM models built in China differ from those designed in the West. A large portion of LLMs built in China use open-source architecture. Others like Alibaba’s Qwen models, are considered “open-weight” meaning developers can fine-tune the model for specific tasks. In addition, Chinese LLMs are engineered for domain-specific precision and not generic tasks.

While Western LLMs are trained on costly state-of-the-art GPU clusters and cloud infrastructure, Chinese LLMs rely on distributed training across multiple, less powerful GPUs. This sheds light on why DeepSeek-R-1’s Multi-Head Latent Attention (MLA) and Mixture of Experts (MOE) architecture is designed to reduce memory usage. The embrace of open-source codebases also plays a crucial role in Chinese LLM development. DeepSeek-V3 and DeepSeek-R-1 have both been released under the MIT open-source license.

One Western solution to the Trojan Horse can be self-disruption. However, the sunk-cost fallacy related to early investments in expensive chips, hardware, and training data and incentives to sell high-margin solutions can chain Western AI companies to their high-end LLMs rather than investing in cheaper models.

The Emirati tech conglomerate G42 feels that DeepSeek-R-1 highlights the growing demand for AI data centres. However, the DeekSeek-R-1 turmoil is an issue less of an existential risk than stock investors as it highlighted the huge gap between equity and credit valuations. The risk is now a paradigm shift around data centres which can impact investor sentiment. DeepSeek-R-1 claimed to have trained the model at a fraction of the amount that other developers spend.

DeepSeek-R-1 will certainly inspire more DeepSeek-R-1-style Open-Source disruptors. Data centre landlords anticipate borrowing costs to increase as the risk of properties becoming obsolete with other DeepSeek-R-1-style disruptors on the AI horizon. Some see lending ambitions as now less confident. Others continue to explore the impact of new AI models and view the DeepSeek-R-1 model as an opportunity for a healthy market correction.

Demand for AI data centres will not fade but growth will taper. Private equity, real estate firms, and sovereign wealth investors have pledged a lot of capital for infrastructure, making them central components of global economic growth. However, the global spree to build data centres that house servers and high-end chips that power AI will cool down. What does all of this mean for Latin America and the Caribbean (LAC)?

The “Latin America and the Caribbean Green Agenda” is a collective effort by countries in the region. It establishes a roadmap for the transition towards a more sustainable and environmentally friendly development path. The focus is on the blue and the circular economies, drifting away from fossil fuels and carbon pricing, investing in sustainable transportation systems and resilient buildings, and addressing potential inequalities to achieve social inclusion.

The “Digital Agenda for Latin America and the Caribbean (eLAC)” is a parallel strategy that advocates for the use of digital technologies as instruments for sustainable development. Its mission is to promote the development of the digital ecosystem in Latin America and the Caribbean through regional integration of digital policies that foster knowledge sharing, inclusion and equity, innovation, and environmental sustainability. eLAC identifies a set of policy priorities and strategic tactics at a regional level across four pillars: (1) infrastructure, governance, security, and creating an enabling environment; (2) the digital economy and entrepreneurship; (3) digital inclusion and a digital civil service; and (4) regional cooperation and integration.

As the Inter-American Development Bank (IDB) prepares for its IDB and IDB Invest Annual Meetings in Santiago, Chile, on March 26-30 2025, the bank hosted its XII Annual Consultation with the governors of IDB Caribbean member states on February 2-3 2025, in Nassau, Bahamas. It was a signal opportunity to discuss regional initiatives like One Caribbean and how IDBImpacts+ reforms can deliver more scale and impact by increasing lending capacity with a focus on reducing poverty, tackling climate change, and promoting sustainable growth. The One Caribbean initiative addresses climate resilience, citizen security, productivity and growth, and food security. The One Safe Caribbean initiative aims to tackle cross-border organized crime and cybersecurity assistance.

A key milestone in the political calendar of the Bridgetown Initiative is the Fourth International Conference on Financing for Development in Seville in June 2025. This builds on the IMF/WBG Spring Meetings in Washington DC from the 25th-27th April 2025, which will examine the countless deep divisions that afflict ordinary people everywhere. This Bridgetown Initiative calls for the reform of the Global Financial Architecture. Led by The Honourable Miss Mia Amor Mottley, S.C., the initiative carries with it the possibility of achieving a convergence of the digital, including AI, and the ecological twin transitions that will shape the future of LAC.