Basically US company’s involved in AI have been grossly over valued for the last few years due to having a sudo monopoly over AI tech (companies like open ai who make chat gpt and nvidia who make graphics cards used to run ai models)

Deep seek (Chinese company) just released a free, open source version of chat gpt that cost a fraction of the price to train (setup) which has caused the US stock valuations to drop as investors are realising the US isn’t the only global player, and isn’t nearly as far ahead as previously thought.

Nvidia is losing value as it was previously believed that top of the line graphics cards were required for ai, but turns out they are not. Nvidia have geared their company strongly towards providing for ai in recent times.

"You see, dear grandchildren, your grandfather used to have an apple orchard. The fruits were so sweet and nutritious that every town citizen wanted a taste because they thought it was the only possible orchard in the world. Therefore the citizens gave a lot of money to your grandfather because the citizens thought the orchard would give them more apples in return, more than the worth of the money they gave. Little did they know the world was vastly larger than our ever more arid US wasteland. Suddenly an oriental orchard was discovered which was surprisingly cheaper to plant, maintain, and produced more apples. This meant a significant potential loss of money for the inhabitants of the town called Idiocracy. Therefore, many people asked their money back by selling their imaginary not-yet-grown apples to people who think the orchard will still be worth more in the future.

This is called investing, or to those who are honest with themselves: participating in a multi-level marketing pyramid scheme. You see, children, it can make a lot of money, but it destroys the soul and our habitat at the same time, which goes unnoticed by all these people with advanced degrees. So think again when you hear someone speak with fancy words and untamed confidence. Many a times their reasoning falls below the threshold of dog poop. But that’s a story for another time. Sweet dreams."

Let’s say I make a thing. Let’s say somebody offers to buy it from me for $10. I sell it to them, and then let’s say somebody else makes a better thing, and now no one will pay more than $2 for my thing. If my thing is a publicly traded corporation, then that just “wiped off” $8 from the stock market. The person I sold it to “lost” $8. Corporations that make AI and the hardware to run it just “lost” a lot of value.

Not necessarily… if I gave you my “faster car” for you to run on your private 7 lane highway, you can definitely squeeze every last bit of the speed the car gives, but no more.

DeepSeek works as intended on 1% of the hardware the others allegedly “require” (allegedly, remember this is all a super hype bubble)… if you run it on super powerful machines, it will perform nicer but only to a certain extend… it will not suddenly develop more/better qualities just because the hardware it runs on is better

OpenAI could use less hardware to get similar performance if they used the Chinese version, but they already have enough hardware to run their model.

Theoretically the best move for them would be to train their own, larger model using the same technique (as to still fully utilize their hardware) but this is easier said than done.

It’s not multimodal so I’d have to imagine it wouldn’t be worth pursuing in that regard.

how long do you think it’ll take before the west decides to block all access to the model?

With that attitude I am not sure if you belong in a Chinese prison camp or an American one. Also, I am not sure which one would be worse.

Two times zero is still zero

Not really a question of national intentions. This is just a piece of technology open-sourced by a private tech company working overseas. If a Chinese company releases a better mousetrap, there’s no reason to evaluate it based on the politics of the host nation.

Throwing a wrench in the American proposal to build out $500B in tech centers is just collateral damage created by a bad American software schema. If the Americans had invested more time in software engineers and less in raw data-center horsepower, they might have come up with this on their own years earlier.

Cutting the cost by 97% will do the opposite of hampering proliferation.

Overhyped? Sure, absolutely.

Overused garbage? That’s incredibly hyperbolic. That’s like saying the calculator is garbage. The small company where I work as a software developer has already saved countless man hours by utilising LLMs as tools, which is all they are if you take away the hype; a tool to help skilled individuals work more efficiently. Not to replace skilled individuals entirely, as Sam Dead eyes Altman would have you believe.

On the brightside, the clear fragility and lack of direct connection to real productive forces shows the instability of the present system.

That’s the thing: if the cost of AI goes down , and AI is a valuable input to businesses that should be a good thing for the economy. To be sure, not for the tech sector that sells these models, but for all of the companies buying these services it should be great.

Economy =/= stock market

It’s based on guessing what the actual worth of AI is going to be, so yeah, wildly speculative at this point because breakthroughs seem to be happening fairly quickly, and everyone is still figuring out what they can use it for.

There are many clear use cases that are solid, so AI is here to stay, that’s for certain. But how far can it go, and what will it require is what the market is gambling on.

If out of the blue comes a new model that delivers similar results on a fraction of the hardware, then it’s going to chop it down by a lot.

If someone finds another use case, for example a model with new capabilities, boom value goes up.

It’s a rollercoaster…

You’re watching an empire in decline. It’s words stopped matching its actions decades ago.

Don’t forget about the tariffs too! The US economy is actually a joke that can’t compete on the world stage anymore except by wielding their enormous capital from a handful of tech billionaires.

Text below, for those trying to avoid Twitter:

Most people probably don’t realize how bad news China’s Deepseek is for OpenAI.

They’ve come up with a model that matches and even exceeds OpenAI’s latest model o1 on various benchmarks, and they’re charging just 3% of the price.

It’s essentially as if someone had released a mobile on par with the iPhone but was selling it for $30 instead of $1000. It’s this dramatic.

What’s more, they’re releasing it open-source so you even have the option - which OpenAI doesn’t offer - of not using their API at all and running the model for “free” yourself.

If you’re an OpenAI customer today you’re obviously going to start asking yourself some questions, like “wait, why exactly should I be paying 30X more?”. This is pretty transformational stuff, it fundamentally challenges the economics of the market.

It also potentially enables plenty of AI applications that were just completely unaffordable before. Say for instance that you want to build a service that helps people summarize books (random example). In AI parlance the average book is roughly 120,000 tokens (since a “token” is about 3/4 of a word and the average book is roughly 90,000 words). At OpenAI’s prices, processing a single book would cost almost $2 since they change $15 per 1 million token. Deepseek’s API however would cost only $0.07, which means your service can process about 30 books for $2 vs just 1 book with OpenAI: suddenly your book summarizing service is economically viable.

Or say you want to build a service that analyzes codebases for security vulnerabilities. A typical enterprise codebase might be 1 million lines of code, or roughly 4 million tokens. That would cost $60 with OpenAI versus just $2.20 with DeepSeek. At OpenAI’s prices, doing daily security scans would cost $21,900 per year per codebase; with DeepSeek it’s $803.

So basically it looks like the game has changed. All thanks to a Chinese company that just demonstrated how U.S. tech restrictions can backfire spectacularly - by forcing them to build more efficient solutions that they’re now sharing with the world at 3% of OpenAI’s prices. As the saying goes, sometimes pressure creates diamonds.

Last edited 4:23 PM · Jan 21, 2025 · 932.3K Views

Deepthink R1(the reasoning model) was only released on January 20. Still took a while though.

That, and they are just brute forcing the problem. Neural nets have been around for ever but it’s only been the last 5 or so years they could do anything. There’s been little to no real breakthrough innovation as they just keep throwing more processing power at it with more inputs, more layers, more nodes, more links, more CUDA.

And their chasing a general AI is just the short sighted nature of them wanting to replace workers with something they don’t have to pay and won’t argue about it’s rights.

Aren’t VPNs illegal in China?