DeepSeek, the latest AI chatbot from China, is sending shockwaves through the tech industry with its impressive capabilities and cost-effectiveness. Owned by the Chinese stock trading firm High-Flyer, DeepSeek has risen in popularity at an alarming rate, putting other AI chatbots like Google Gemini and ChatGPT on notice.
What sets DeepSeek apart?
DeepSeek’s AI reportedly required far less raw computing power to get started than rivals from larger tech firms. In fact, the company said it only needed about $6 million in computing power to train its new system, approximately 10 times less than what Meta spent training its AI model (1). This cost-effectiveness is making waves in the industry, with experts predicting that it will attract other entrants to the market.
Impressive Capabilities
DeepSeek’s latest model, DeepSeek-R1, focuses on logical inference, mathematical reasoning, and real-time problem-solving. It was trained using reinforcement learning without supervised fine-tuning, employing group relative policy optimization (GRPO) to enhance reasoning capabilities (2). This model achieves performance comparable to OpenAI’s o1 model, with an accuracy rate of 97.3% on the MATH-500 test.
The Impact on the Tech Industry
DeepSeek’s rise has already had a significant impact on the tech industry, with stocks falling for companies like Nvidia, Microsoft, and Google (3). Nvidia was particularly hard hit, losing about 17% of its market value. However, experts like David Bau, a Northeastern University professor, say that this doesn’t necessarily mean that Nvidia’s chips will become less relevant (4). Instead, he predicts that DeepSeek’s architecture will increase the aggregate demand for Nvidia’s chips.
Concerns and Controversies
Despite the excitement around DeepSeek, there are also concerns about its data handling practices and content moderation policies. The company’s privacy policy indicates that user data, including chat interactions, is stored on servers located in the People’s Republic of China, raising alarms about the potential for user data to be accessed by the Chinese government (5). Additionally, DeepSeek’s chatbot has been criticized for censoring discussions on topics deemed sensitive or politically controversial by Chinese authorities (6).
References:
1. Bloomberg: “China’s DeepSeek AI Chatbot Takes On Google and Microsoft”
2. TechCrunch: “DeepSeek’s AI Chatbot Achieves State-of-the-Art Results in Math and Logic”
3. CNBC: “Nvidia, Microsoft, and Google Stocks Fall as DeepSeek Rises”
4. The Verge: “Expert: DeepSeek’s Architecture Will Increase Demand for Nvidia’s Chips”
5. Reuters: “DeepSeek’s Data Handling Practices Raise Concerns”
6. The Wall Street Journal: “DeepSeek’s Chatbot Criticized for Censoring Sensitive Topics”
