A Greater Expense Does Not Always Guarantee Better Results

Last week, the President of the European Commission, Ursula von der Leyen, stated at the Davos Forum that Europe has “learned the lesson that money is not everything […]. But it is clear that access to capital is crucial in the European Union” (1). This phrase, mentioned during the presentation of the European Union’s plan to compete in the field of artificial intelligence (AI), referred to the emergence of DeepSeek, a generative AI model similar to ChatGPT, Gemini, or Claude, which was developed at a much lower cost (approximately 6 million dollars compared to 100 million dollars) than its competitors, yet offers similar performance according to certain benchmarks. This, coupled with the fact that it is an open source model (2), has led to a decline in the share prices of some of the main companies associated with the development of AI algorithms (or microchips), such as Nvidia (a drop of over 12%), ASML (a drop of 8%), or Siemens (a drop of 5%) (3).

Achieving an objective, product, or service of similar or superior quality compared to a competitor or counterpart at a lower investment cost may seem like an isolated or infrequent occurrence. However, it is not. Although it is true that having substantial capital available to produce (whether products or services) or innovate is a competitive advantage and, to a certain extent, necessary, history has demonstrated that it is not the only factor influencing the outcome or achievement of a specific objective. An example of this, perhaps more well-known and even clearer than the recent case of DeepSeek, is the achievement of the first controlled, powered, and sustained flight by the Wright brothers in 1903. Orville Wright and Wilbur Wright, bicycle manufacturers, managed to invent the first airplane that flew in a controlled manner with far fewer resources than those available to Professor Samuel Langley, head of the Smithsonian Institution in Washington, who aimed to achieve the same feat (4). Specifically, it is estimated that the Wright brothers invested approximately $1,000 of their own money to develop the Wright Flyer I. In contrast, Langley received and unsuccessfully spent $70,000, of which $50,000 came from the U.S. Government’s War Department and $20,000 from his friend Alexander Graham Bell (4,5). The reasons behind the Wright brothers' success and Professor Langley’s failure are manifold, according to the English science writer Matt Ridley (4). According to Ridley, Professor Langley erred by attempting to build the airplane from scratch, without relying on previous experience, consulting too few experts during the invention process, and spending significant amounts of capital without properly evaluating the value and return on investment. In contrast, the Wright brothers did quite the opposite. That is, they relied on the prior experience of other inventors and researchers, exchanged information and knowledge with various experts, and systematically tested and analyzed several glider models or their components (wings, ailerons, etc.) considering the resources available.

In the field of healthcare, this phenomenon is also observable. For example, although the OECD’s Health at a Glance 2023 report (6) indicates a positive correlation between per capita health expenditure and life expectancy at birth, some countries deviate somewhat from this trend. This is the case for the United States (USA), Spain, or Korea, among others. In this regard, the USA tops the OECD ranking in per capita health expenditure (an expenditure of $12,555 per year; 16.8% of GDP) but ranks 35th in terms of life expectancy at birth (76.4 years) and is among the lowest in preventable mortality rates. In contrast, Korea and Spain are ranked 21st (with an expenditure of $4,570 per year; 9.7% of GDP) and 33rd (with an expenditure of $4,432 per year; 10.4% of GDP) respectively in per capita expenditure (below the OECD average), yet they achieve higher life expectancies compared to the average of the same group of countries (83.6 years in Korea and 83.3 years in Spain). The reasons for this discrepancy between per capita expenditure and health outcomes among different countries are varied. However, the objective of this publication was not to explain them, but rather to highlight the fact that higher expenditure does not always translate into better outcomes.

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Bibliography:

1. Raventós J. The European Union’s plan to regain lost ground in innovation goes through AI [Internet]. 2025. Available at: https://www.3cat.cat/324/el-pla-de-la-unio-europea-per-recuperar-el-terreny-perdut-en-innovacio-passa-per-la-ia/noticia/3333173/
2. Wikipedia. DeepSeek [Internet]. 2025. Available at: https://es.wikipedia.org/wiki/DeepSeek
3. VilaWeb. The emergence of the Chinese DeepSeek shakes up the artificial intelligence market and global stock exchanges [Internet]. VilaWeb. 2025. Available at: https://www.vilaweb.cat/noticies/irrupcio-xinesa-deepseek-sacseja-mercat-intelligencia-artificial-borses-globals/
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5. Wikipedia. Wright Brothers [Internet]. 2024. Available at: https://en.wikipedia.org/wiki/Wright_brothers
6. OECD. Health at a Glance 2023: OECD Indicators. Leadership and Governance in Primary Healthcare: An Exemplar for Practice in Resource-Limited Settings. 2023. pp. 43-54