‘Cheap’ Chinese chatbot shocks AI world

MT HANNACH
5 Min Read
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The Chinese Artificial Intelligence Application (AI) Deepseek has exceeded Chatgpt and other competitors to become the best rated free application on the Apple App Store in the United States, the United Kingdom and China.

The application has gained popularity since its launch in January, questioning the widespread belief according to which America is the untouchable leader in the AI ​​industry.

It is fueled by the open source Deepseek-V3 model, which, according to its researchers, has been developed for less than $ 6 million, much less than the billions spent by its competitors.

But this assertion was disputed by others in the field of AI.

After the launch of Deepseek-R1 earlier this month the company boasted of “Performance comparable to” one of the latest models of the Chatgpt Openai creator – when used for tasks such as mathematics, coding and natural language reasoning.

The venture capital of Silicon Valley and advisor to Donald Trump, Marc Andreessen, described Deepseek-R1 as “The spoutnik moment of AI”In reference to the first terrestrial artificial satellite launched by the Soviet Union in 1957.

Advanced fleas fuel the formation of AI models like Chatgpt and Deepseek.

But since 2021, the American government has expanded its restrictions on the advanced fleas sold to China.

In order to continue their work without regular supplies in imported advanced chips, the Chinese developers of AI have shared their work and experienced new technological approaches.

This has resulted in AI models that require much less computing power than before. It also means that they cost much cheaper than we thought before, which could potentially upset the industry.

The actions of companies related to AI based in the United States, such as Nvidia, Microsoft and Meta, were down Monday morning-and this development dropped the prices of European equities.

ASML, the Dutch manufacturer of equipment for chips, saw the course of its action fall by more than 10 %, while the shares of Siemens Energy, which manufactures equipment linked to the AI, plunged by 21 %.

“This idea of ​​a low-cost Chinese version was not necessarily at the forefront, so it took the market a little by surprise,” said Fiona Cincotta, senior market analyst at City Index.

“So, if you suddenly get this low -cost AI model, this will raise concerns about the benefits of competitors, in particular given the amount they have already invested in a more expensive IA infrastructure.”

And Vey-Senn Ling, technological equity advisor based in Singapore, told the BBC that this could “potentially have the arguments in terms of investment for the entire AI supply chain” derail.

But Wall Street’s banking giant, Citi, warned that even if Deepseek could call into question the dominant positions of American companies like Openai, the problems encountered by Chinese companies could hinder their development.

“We believe that in an inevitably more restrictive environment, access by the United States to more advanced fleas is an advantage,” said his analysts in a report.

Last week, a consortium of American technological companies and foreign investors announced The Stargate project, A company that invests $ 500 billion in AI infrastructure in Texas.

The company was founded in 2023 by Liang Wenfeng in Hangzhou, a city in southeast China.

This 40 -year -old man, a graduate in information and electronics engineering, also founded the hedge fund that supported Deepseek.

He would have was formed an NVIDA A100 flea store, now prohibited from export to China. Experts estimate that this collection – that certain estimates estimates to 50,000 – led it to launch Deepseek, by associating these chips with cheaper and low -end fleas still available for imports.

Mr. Liang was recently seen at a meeting between experts from the sector and Chinese Prime Minister Li Qiang.

In an interview of July 2024 with The China AcademyMr. Liang said he was surprised by the reaction to the previous version of his AI model.

“We did not expect the issue of prices to be so sensitive,” he said.

“We simply followed our own rhythm, calculation costs and fixing the prices accordingly.”

Additional Joao Da Silva and Dearbail Jordan report.

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