Every Wall Street analyst, trader and tech dude caught wind of the new Deepseek AI chatbot over the past weekend. (Even me - despite being out of town, drowning in sick kids and racing toward work deadlines) What is it and why does it matter?
Essentially, a Chinese hedge fund backed an AI startup firm to create a new AI chatbot that rivals OpenAI’s ChatGPT, Meta’s Llama and others for a tiny fraction of the cost.
“Rival” means Deepseek will score as well or better on standardized quizzes and tests as ChatGPT. AI models take these exams to illustrate their comprehension and intelligence.
The alleged $ number the company paid to train the model is $5 million dollars worth of computing power to achieve the same results as the $170 million cost to marginally train the latest update of ChatGPT.
In a classic inverted “buy the rumor- sell the news”, traders suddenly adjusted their mental models of how many GPU chips would actually be needed to train next gen AI models. The company selling all these GPUs promptly tanked Monday.
Let’s forget how the model is trained to behave. That’s not the point. The Chinese deepseek model as biased and skewed as any other trained model.
Chinese models have Chinese bias
The point is everyone needs to determine how true the claim is of building an AI model so cheap. If it’s accurate, it’s a fundamental gamechanger for the AI bull run. If it’s non-sense, then this is a fantastic Buy the Dip moment.
Feels too good to be true
Funny how the timing of the Deepseek announcement came almost immediately after President Trump announced the American Stargate AI investment plan for $500 Billion in datacenter build outs and chip manufacturing.
Stargate would support a massive hardware build out for better AI models which Silicon Valley claims is necessary to maintain an edge in the industry.
With a Deepseek build method however, all that investment would be a needless waste of money making Silicon Valley’s “expertise” seem like
Overall, it will take some time to sort out what is true and what is not with the new Deepseek revelations. My guess is something that sounds too good to be true, usually is and there is more to the story yet to come.
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