Chinese AI makers have learned to build powerful AI models that perform just short of the U.S.’s most advanced competition while using far less money, chips, and power.
In late December, Hangzhou-based DeepSeek released V3, an open-source large language model whose performance on various benchmark tests puts it in the same league as OpenAI’s 4o and Anthropic’s Claude 3.5 Sonnet.
Those are the most advanced AI models these companies currently offer to the broad public, though both OpenAI and Anthropic have next-generation models in their pipeline.
Chinese AI startup DeepSeek is causing turbulence on Wall Street and in Silicon Valley. They are making stunning breakthroughs. Deep Seek’s rise shows they can succeed at a fraction of what the U.S. giants spend despite export bans on top-of-the-line chips.
According to Axios, it could potentially be especially bad news for Nvidia, which designs the world’s most advanced AI chips, because DeepSeek is proving that rapid advances are possible even with fewer and less sophisticated chips. Nvidia’s stock slid on Friday and again in overnight trading last night, pulling the Nasdaq down with it.
Deep Seek started with only $6 million. Open AI is spending millions of dollars. The Chinese Communist company focused on basic research rather than consumer product development.
Despite these advances, China faces challenges such as reliance on foreign technology for chips, which U.S. export controls have curtailed. This has led to efforts to boost domestic semiconductor manufacturing and design. Additionally, there’s a tension between technological advancement and the need for control under an authoritarian regime, which influences AI’s development and deployment, especially in areas like surveillance and censorship.
They also use slave labor.
DeepSeek is said to have already amassed a training network of 10,000 Nvidia H100s by the time U.S. sanctions were introduced in 2022.
Would DeepSeek be making such rapid advances on its own without having the latest work from OpenAI and its U.S. competitors to aim at? We don’t know.
Just the same, they might be leaving the US in the dust.
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