-By Mireya K
The past 24 hours have witnessed a storm in Silicon Valley upon the release of a new Chinese AI model by the name of ‘DeepSeek’. This new chatbot created by a group of nearly 50 developers in Hangzhou, China has taken the tech world by storm. But what’s all this about and how is this a pivotal turning point in the artificial intelligence race?
By January 27, DeepSeek had already become the #1 on the app store in the US, UK and China, surpassing ChatGPT, by the end of the day the US stock market crashed, NVIDIA lost $593 billion dollars and the US lost nearly a trillion dollars overnight- a record number in Wall Street history.
What is DeepSeek AI?
DeepSeek's models, including DeepSeek-V3 and DeepSeek-R1 are developed by a Hangzhou-based startup, led by Liang Wenfeng, co-founder of the quantitative hedge fund High-Flyer. The company shot to fame last week after claiming that their latest model R1, had surpassed all American models (including o1) in reasoning, mathematics and logic. While comparing their performances, users deduced that it did perform better on the technical side- mathematical questions and logical coding. while ChatGPT maintains the leading edge in conversational queries and creative output. Its researchers wrote in a paper last month that the DeepSeek-V3 model, launched on Jan. 10, used Nvidia's lower-capability H800 chips for training, spending less than $6 million. This was because the US restricted semiconductor exports to China, limiting their access to the cutting edge Nvidia H-100 GPU’s that power the most advanced ai today. This was in stark contrast to OpenAI’s ChatGPT, which required nearly $19 billion dollars to make. DeepSeek on the other hand was made completely free and Open Source, meaning anyone in any part of the world could develop upon it and use it’s open source to train their own models, absolutely free of cost. Something that OpenAI prices nearly 4 million dollars to do, and is still closed source, despite having Open in their name.
United States’ advancements and response
The infrastructure required to build AI was presumed to be billions of dollars, expensive high end data centers, loads of energy. President Trump recently announced “project Stargate”. While the name may sound like a utopian sci-fi one, it was similar, coming with an investment of $500 billion dollars made by the government into AI infrastructure and research with 3 companies at the center- OpenAi, SoftBank and Oracle. All this funding into research is promised to give rise to new breakthroughs in cancer treatment, new medicinal drugs, space exploration and a lot of significant breakthroughs. President Trump, on January 27th, in a speech to the nation said this is a “wake up call” for American companies and they must “compete hard to win this race”.
As for Liang Wenfeng, he says this moment was important for china to establish themselves as global innovators, not just the standard replicators of original creation.
The Financials of AI
DeepSeek changes a lot about our fundamental principles on how AI should build upon- with DeepSeek we now know that it shouldn’t take billions of dollars to build smart, efficient pre trained models. By making it open source, we can have very effective ai models at a much smaller budget and be cost effective. Thus the ROI is much higher. This is incredible for scaling up these systems and their wider integration into society.
The future of AI will be marked on them running on personal computers and smartphones, without requiring expensive compute power. Financial feasibility and affordability is the first and most important process in mass scaling a technology for wider use across the planet. More countries will be able to build their own ai models using home-grown talent. The shift of power is marked to be from centralised power in the hands of few corporations- to a more decentralised system with multiple players involved.
The future of AI
For all that it is, the race for AI has just begun. The future is marked by unprecedented growth in this field and small strides like these are important to leverage us into the real deal- ASI and AGI, which is set to change the entire world completely. The future is unprecedented, but with any sufficiently advance technology comes dire responsibility- to usher it in the right direction and always keep the betterment of humanity in sight.
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