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DeepSeek sparks debate in Silicon Valley

DeepSeek sparks debate with its low-cost AI model R1, rivalling OpenAI and topping app charts, raising questions about the future of AI innovation.

Chinese AI company DeepSeek has made waves in the tech industry after releasing an open version of its reasoning model, R1, earlier this week. The announcement has stirred significant conversations about its implications for the future of artificial intelligence, with some calling it a breakthrough and others expressing scepticism.

Industry reactions highlight mixed views

Prominent voices in the tech world have shared their thoughts on DeepSeek’s achievement. Venture capitalist Marc Andreessen described it as “one of the most amazing and impressive breakthroughs I’ve ever seen.” DeepSeek’s R1 model reportedly rivals and sometimes surpasses OpenAI’s o1 model in specific AI benchmarks.

Even more striking is DeepSeek’s claim that one of its models was trained for just US$5.6 million—far less than the hundreds of millions typically spent by leading US companies.

This accomplishment comes despite US sanctions restricting Chinese companies from purchasing advanced chips. According to the MIT Technology Review, these restrictions have pushed companies like DeepSeek to innovate by prioritising efficiency and collaboration. However, The Wall Street Journal notes that DeepSeek’s founder, Liang Wenfeng, has acknowledged that export restrictions remain a bottleneck for the company.

Not everyone is convinced of the company’s transparency. In a post, Neal Khosla, CEO of Curai, claimed that DeepSeek could be a “CCP state psyop,” alleging that the company might be misleading about its costs to gain a competitive edge. However, a Community Note attached to his post highlights the lack of evidence for his claim and points out that his father, Vinod Khosla, is an investor in OpenAI.

Implications for the tech industry

DeepSeek’s potential to produce cutting-edge AI models at a low cost has raised questions about the impact on the global AI market. Journalist Holger Zschaepitz suggested that this development could threaten the value of billions of dollars invested in the US AI industry. However, Y Combinator CEO Garry Tan offered a more optimistic view, arguing that cheaper and faster model training could increase the demand for AI applications and boost the industry overall.

Meta’s Chief AI Scientist, Yann LeCun, shifted the conversation away from a US-versus-China narrative. He emphasised the significance of open-source AI models, pointing out that DeepSeek built upon open research tools like PyTorch and Llama. LeCun argued that open-source innovation benefits the AI community, including competitors.

Consumers embrace DeepSeek

While the debate rages on among industry experts, consumers have shown great interest in DeepSeek’s AI assistant. As of Sunday afternoon, it became the top free app in the Apple App Store, surpassing ChatGPT in popularity. This surge reflects growing curiosity and excitement about DeepSeek’s potential to shake up the AI landscape.

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