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So what’s all the hoopla about DeepSeek and why is it breaking everybody’s brain right now in Ai? I’ve been doing a dive for a couple of days and these are the main deets I’ve pulled together, will have a Guy’s Take on it soon, so stay tuned to the @npub1hw4z...lg0q feed DeepSeek ELI5: • US has been hailed as the leader in Ai, while pushing fears that we need to be closed and not share with China cuz evil CCP and they can’t figure it out without us • ChatGPT and “Open”Ai is poster child, eating up retarded amounts of capital for training and inference (using) LLMs. Estimates say around $100 million or more for ChatGPT o1 model. • In just a couple of weeks China drops numerous open source models with incredible results, Hunyuan for video, Minimax, and now DeepSeek. All open source, all insanely competitive with the premiere closed source in the US. • DeepSeek actually surpassed ChatGPT o1 on most benchmarks, particularly math, logic, and coding. • DeepSeek is also totally open with how its thought process works, it explains and shows its work as it runs, while ChatGPT makes that proprietary. This makes building with, troubleshooting, and understanding with DeepSeek much better. • DeepSeek is also multimodal, so you can give it PDFs, images, connect it to the internet, etc. it’s a literal full personal assistant with just a few tools to plug into it. • The API costs 95% LESS than ChatGPT API per call. They claim that is a profitable price as well, while OpenAi is bleeding money. • They state that DeepSeek cost only $5.6 million to train and operate. • Capital controls on GPUs and chips went into effect in the past year or two trying to prevent China from “catching up,” and it seems to have failed miserably. As it seems China was able to do 20x the results per dollar with inferior hardware. • The US model of Ai, its costs, its capes structure, and the massive demand for chips has been the model for assessing the valuation, pricing, and future demand of the entire Ai industry. DeepSeek just took a giant dump on all of it by out performing and spending a tiny fraction to achieve it while also dealing with lack of access to the newest chips. All of this together is why people are freaking out about a plummet to Nvidia price, reevaluation of OpenAi, and the failure of US to stay dominant or even the legitimacy of staying proprietary as it may just cause us to fall behind rather than lead. All after a $700 billion investment was just announced that now just kinda looks like incompetent corporations wasting horrendous amounts of money for something they won’t even share with people, that you can’t run locally, and is surpassed by a few lean Chinese startups with barely a few million.

Replies (24)

“What happens to all these wonderful ChatGPT models if a small Chinese startup builds a superior LLM for $6M❔” “All your LLM models are destroyed, completely devastated, ₿itcoin goes to the Moon❕” ⤴️🌙 - Saylor to Sam Altman
I’ll catch that podcast for sure. Curious if any of their claims about what they spent can be verified? Also, any way to check that the search inputs and out outs aren’t stored somewhere. I guess if it’s fully open source that can be verified.
Guy Swann's avatar Guy Swann
So what’s all the hoopla about DeepSeek and why is it breaking everybody’s brain right now in Ai? I’ve been doing a dive for a couple of days and these are the main deets I’ve pulled together, will have a Guy’s Take on it soon, so stay tuned to the @npub1hw4z...lg0q feed DeepSeek ELI5: • US has been hailed as the leader in Ai, while pushing fears that we need to be closed and not share with China cuz evil CCP and they can’t figure it out without us • ChatGPT and “Open”Ai is poster child, eating up retarded amounts of capital for training and inference (using) LLMs. Estimates say around $100 million or more for ChatGPT o1 model. • In just a couple of weeks China drops numerous open source models with incredible results, Hunyuan for video, Minimax, and now DeepSeek. All open source, all insanely competitive with the premiere closed source in the US. • DeepSeek actually surpassed ChatGPT o1 on most benchmarks, particularly math, logic, and coding. • DeepSeek is also totally open with how its thought process works, it explains and shows its work as it runs, while ChatGPT makes that proprietary. This makes building with, troubleshooting, and understanding with DeepSeek much better. • DeepSeek is also multimodal, so you can give it PDFs, images, connect it to the internet, etc. it’s a literal full personal assistant with just a few tools to plug into it. • The API costs 95% LESS than ChatGPT API per call. They claim that is a profitable price as well, while OpenAi is bleeding money. • They state that DeepSeek cost only $5.6 million to train and operate. • Capital controls on GPUs and chips went into effect in the past year or two trying to prevent China from “catching up,” and it seems to have failed miserably. As it seems China was able to do 20x the results per dollar with inferior hardware. • The US model of Ai, its costs, its capes structure, and the massive demand for chips has been the model for assessing the valuation, pricing, and future demand of the entire Ai industry. DeepSeek just took a giant dump on all of it by out performing and spending a tiny fraction to achieve it while also dealing with lack of access to the newest chips. All of this together is why people are freaking out about a plummet to Nvidia price, reevaluation of OpenAi, and the failure of US to stay dominant or even the legitimacy of staying proprietary as it may just cause us to fall behind rather than lead. All after a $700 billion investment was just announced that now just kinda looks like incompetent corporations wasting horrendous amounts of money for something they won’t even share with people, that you can’t run locally, and is surpassed by a few lean Chinese startups with barely a few million.
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I'd add one more, the USD vs BRICS. The narrative has been "yes, BRICS has all the energy and commodities, but US has the AI". We have been asked to believe that massive US-led productivity gains from AI will make the US deficit immaterial again. Deepseek shakes that narrative because if US doesn't have a lead in AI (or energy or commodities), then what does it have?
DeepSeek is a refutation of the “Scaling Laws” nonsense that has plagued the AI world for the past couple of years. Instead of trying innovative new ways to improve model performance big tech has been content to throw more compute and more data at these models in order to improve performance. They were bound to run into diminishing returns at some point
Silicon Valley expected to evolve their investments into “AI”. The whole ecosystem of startups and banking and financing and VC firms and Angels and equity for early employees and advisors - the whole thing which has been built up for 4-5 decades now just got rug pulled. The stock market side is a legit ponzi on top of the incumbent structures. China wants the world to revolve around real world production. Manufacturing. America wants it to revolve around software protected by IP laws protected by the US military. The winner is already obvious.
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Never be the first guy out the gate, you always will get shot. piggybacking is always cheaper. And there is no such thing as "hailed leader", when its software, every second someone is jockeying to take your place. Tough place to be, but only the strong survive.