DeepSeek's R1 AI model, developed with limited access to technology, rivals or surpasses OpenAI's capabilities at a lower cost. This breakthrough has shaken the AI industry, impacting companies like NVIDIA, Microsoft, Alphabet, and Amazon, who face new competition from DeepSeek.
Tasked with creating an AI model with minimal access to technology, DeepSeek’s R1 out performs or matches OpenAI’s model at a lower cost.Since OpenAI launched ChatGPT, we have been told that in order for artificial intelligence to get better, more and more compute power would be needed. It’s an argument that makes sense, or rather made sense until this week.has now turned that thinking on its head and in the process, deleted value from the biggest players in the AI space, including NVIDIA.
What makes the tech so attractive though is that it compared to OpenAI, the price of API access is very low and more importantly, the model can be run on consumer grade hardware. Seriously, somebody managed to get the model running on a few Macs, putting the entire hardware industry being propped up by AI crashing to its knees.
Tensions between the US and China saw the US block the sale of tech to China but DeepSeek hoarded GPUs in order to train its AI models. With minimal access to tech, DeepSeek had to be creative and as such innovated on innovations to reduce the compute power overheads required by the bigger players in AI. This makes DeepSeek more cost effective to run while offering better or equal performance to OpenAI’s models.
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