It's quite lucid. The new thing uses a fraction of compute compared to the old thing for the same results, so Nvidia cards for example are going to be in way less demand. That being said Nvidia stock was way too high surfing on the AI hype for the last like 2 years, and despite it plunging it's not even back to normal.

Most rational market: Sell off NVIDIA stock after Chinese company trains a model on NVIDIA cards.

Anyways NVIDIA still up 1900% since 2020 …

how fragile is this tower?

Ah, but those "intelligent" people cannot be very intelligent if they are not billionaires. After all, the AI companies know exactly how to assess intelligence:

Microsoft and OpenAI have a very specific, internal definition of artificial general intelligence (AGI) based on the startup’s profits, according to a new report from The Information. ... The two companies reportedly signed an agreement last year stating OpenAI has only achieved AGI when it develops AI systems that can generate at least $100 billion in profits. That’s far from the rigorous technical and philosophical definition of AGI many expect. (Source)

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

Economy =/= stock market

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.

It's kinda funny. Their magical bullshitting machine scored higher on made up tests than our magical bullshitting machine, the economy is in shambles! It's like someone losing a year's wages in sports betting.

Well.... if there is one thing I have to commend CCP is they are unafraid to crack down on billionaires after all.

Democrats and Republicans have been shoveling truckload after truckload of cash into a Potemkin Village of a technology stack for the last five years. A Chinese tech company just came in with a dirt cheap open-sourced alternative and I guarantee you the American firms will pile on to crib off the work.

Far from fucking them over, China just did the Americans' homework for them. They just did it in a way that undercuts all the "Sam Altman is the Tech Messiah! He will bring about AI God!" holy roller nonsense that was propping up a handful of mega-firm inflated stock valuations.

Small and Mid-cap tech firms will flourish with these innovations. Microsoft will have to write the last $13B it sunk into OpenAI as a lose.

Didn't donald add like $500B for AI? Seems it'salmost enough to pay the -$600B nVidia lost...

So can I have a private version of it that doesn't tell everyone about me and my questions?

I asked it about Tiananmen Square, it told me it can't answer that because it can only respond with "harmless" responses.

Yes but your server can't handle the biggest LLM.

But Chinese...

It’s knowledge isn’t updated.

It doesn’t know current events, so this isn’t a big gotcha moment

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...

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

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

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.

The determination to make us use it whether we want to or not really makes me resent it.

Joke's on them: I never started a subscription!

I don’t have one to cancel, but I might celebrate today by formatting the old windows SSD in my system and using it for some fast download cache space or something.

The money went back into the hands of all the people and money managers who sold their stocks today.

Edit: I expected a bloodbath in the markets with the rhetoric in this article, but the NASDAQ only lost 3% and the DJIA was positive today...

Nvidia was significantly over-valued and was due for this. I think most people who are paying attention knew that

"off US stocks"

It's pixie dust

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.

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.

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.

Apparently they have barely produced any so they will all be sold out anyway.

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.

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.

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

Yep. It's obviously a bubble, but one that won't pop from just this, the motive is replacing millions of employees with automation, and the bubble will pop when it's clear that won't happen, or when the technology is mature enough that we stop expecting rapid improvement in capabilities.

Yeah, after what happened, I now understand how irrational stock market is.

TSMC just finished building out a foundry in Arizona, so there's a nativist argument that we don't need the island's original facilities anymore.

It is progress in a sense. The west really put the spotlight on their shiny new expensive toy and banned the export of toy-maker parts to rival countries.

One of those countries made a cheap toy out of jank unwanted parts for much less money and it's of equal or better par than the west's.

As for why we're having an arms race based on AI, I genuinely dont know. It feels like a race to the bottom, with the fallout being the death of the internet (for better or worse)

With understanding LLM, I started to understand some people and their "reasoning" better. That's how they work.

The difference is that you can actually download this model and run it on your own hardware (if you have sufficient hardware). In that case it won't be sending any data to China. These models are still useful tools. As long as you're not interested in particular parts of Chinese history of course ;p

Looks like it is not any smarter than the other junk on the market. The confusion that people consider AI as “intelligence” may be rooted in their own deficits in that area.

Yep, because they believed that OpenAI's (two lies in a name) models would magically digivolve into something that goes well beyond what it was designed to be. Trust us, you just have to feed it more data!

And now people exchange one American Junk-spitting Spyware for a Chinese junk-spitting spyware. Hurray! Progress!

That's the neat bit, really. With that model being free to download and run locally it's actually potentially disruptive to OpenAI's business model. They don't need to do anything malicious to hurt the US' economy.

artificial intelligence

AI has been used in game development for a while and i havent seen anyone complain about the name before it became synonymous with image/text generation

And now people exchange one American Junk-spitting Spyware for a Chinese junk-spitting spyware.

LLMs aren't spyware, they're graphs that organize large bodies of data for quick and user-friendly retrieval. The Wikipedia schema accomplishes a similar, abet more primitive, role. There's nothing wrong with the fundamentals of the technology, just the applications that Westoids doggedly insist it be used for.

If you no longer need to boil down half a Great Lake to create the next iteration of Shrimp Jesus, that's good whether or not you think Meta should be dedicating millions of hours of compute to this mind-eroding activity.

I'm tired of this uninformed take.

LLMs are not a magical box you can ask anything of and get answers. If you are lucky and blindly asking questions it can give some accurate general data, but just like how human brains work you aren't going to be able to accurately recreate random trivia verbatim from a neural net.

What LLMs are useful for, and how they should be used, is a non-deterministic parsing context tool. When people talk about feeding it more data they think of how these things are trained. But you also need to give it grounding context outside of what the prompt is. give it a PDF manual, website link, documentation, whatever and it will use that as context for what you ask it. You can even set it to link to reference.

You still have to know enough to be able to validate the information it is giving you, but that's the case with any tool. You need to know how to use it.

As for the spyware part, that only matters if you are using the hosted instances they provide. Even for OpenAI stuff you can run the models locally with opensource software and maintain control over all the data you feed it. As far as I have found, none of the models you run with Ollama or other local AI software have been caught pushing data to a remote server, at least using open source software.

"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."

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.

Aren't VPNs illegal in China?

AI is overblown, tech is overblown. Capitalism itself is a senseless death cult based on the non-sensical idea that infinite growth is possible with a fragile, finite system.

Your confidence in this statement is hilarious the fact that it doesn't help your argument at all. If anything, the fact they refined their model so well on older hardware is even more remarkable, and quite damning when OpenAI claims it needs literally cities worth of power and resources to train their models.