TMW #211 | Off-brand Martech

Feb 2, 2025

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Off-brand Martech

Commoditization is happening all over tech, and it’s happening in Martech too.

Wow, DeepSeek really put a pin in the AI hype bubble. 

If you’ve been under a rock for the last week, here’s the synopsis: DeepSeek released a new model that cost about $6M to train. The model, called “R1”, has comparable performance with ChatGPT for a fraction of the price (for reference, the Wall Street Journal estimates that OpenAI’s long-awaited GPT5 model will cost over $500M to train). Marc Andreesen catapulted himself to the front of discourse by coining this as “AI’s Sputnik moment.” 

A screenshot of a chatbot

AI-generated content may be incorrect.
Source: Google News

Everything in the US feels like it has a geopolitical angle at the moment, but this is not really about the US vs China. According to Ben Thompson of Stratechery, DeepSeek’s model was likely built on “distillation,” which is a term that describes training a model based on outputs from another model. In short, the company likely piggybacked off leading-edge models from OpenAI, Anthropic, and Google to create a similar performing model at roughly 1% of the cost. 

The Sputnik crisis isn’t the right analogy for this situation though. That was about fear that the Soviets had overtaken the US in developing next-generation science and technology. A better analog here is the advent of generic drugs, with America playing the role of the drug development company that invests millions into R&D to develop new products, while China is the generic drug company that uses the same formula to create a cheaper alternative.

This whole episode got me thinking about the Martech industry. Plenty of software development is already outsourced to cheap labor markets in China, India, Vietnam, Thailand, and the Philippines, so there isn’t really a geopolitical angle here. But there is a commodification angle.

There are plenty of signs that the Martech industry is starting to commodify as it becomes more mature. So, what’s causing that commodification?


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Stay Curious,

Keanu Taylor

Make sense of marketing technology.

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Want to share something interesting or be featured in The Martech Weekly? Drop me a line at juan@themartechweekly.com.

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