Name: China’s rival to ChatGPT rattles Wall Street
Uploaded: 2025-01-28T01:56:00.271Z
Duration: 2 min 48 s
Description: Chinese artificial intelligence company DeepSeek shocked Wall Street and Silicon Valley with its ChatGPT-like AI model called R1. DeepSeek claims it developed the model for just $6 million, compared to the billions OpenAI spent on ChatGPT.

Chinese artificial intelligence company DeepSeek shocked Wall Street and Silicon Valley with its ChatGPT-like AI model called R1. DeepSeek claims it developed the model for just $6 million, compared to the billions OpenAI spent on ChatGPT.

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

Rise of AI

Chinese AI Company DeepSeek Stuns Tech World with New AI Model

Chinese artificial intelligence company DeepSeek has garnered significant attention with its AI model, R1, which is drawing comparisons to ChatGPT. The company claims that its model can function more efficiently and at a much lower cost than current models from leading tech giants like OpenAI and Google. DeepSeek's development cost is reported to be $5.6 million, a fraction of the expenditure by its competitors.

DeepSeek's R1 model offers a similar consumer experience to ChatGPT, providing comparable-quality responses at no cost. However, DeepSeek's AI model demonstrated limitations in responding to sensitive topics such as Tiananmen Square, highlighting possible restrictions associated with Chinese-origin technology. While the model raises concerns about data privacy, its efficiency and lower operational costs indicate a significant shift in AI development strategies.

The emergence of DeepSeek's AI model suggests potential changes in the global AI development landscape, particularly as American companies and the U.S. government may have to reassess their strategies. Despite previous beliefs of maintaining a technological edge over China, this innovation signals a shift in the global AI industry, compelling companies to reconsider large-scale data center expansions and resource allocation.



China’s rival to ChatGPT rattles Wall Street

Everybody in the AI industry is shaking because of what they've seen. A Chinese AI app called DeepSeek is causing an earthquake in the tech world and on Wall Street. It can produce AI models that are far more efficient than the current state of the art from OpenAI, Google, Anthropic and others. So an order of magnitude more efficient. More efficient and much cheaper. DeepSeek claims it cost just $5.6 million to develop its AI model. Even by the most skeptical projections, the most cynical projections, it still cost them a fraction to develop this model than the cost that OpenAI, Google and others have had. So it is a monumental shift. And how does DeepSeek compare from a consumer perspective to ChatGPT? Is it essentially the same in terms of its function? Yes, and it's free. So instead of paying OpenAI $20 a month or Google Gemini $20 a month for their advanced models, you can use DeepSeek, get the exact same level of results for free. The answer will be different because these models all have some random element to them. So you'll get different answers. But the experience that we've had over the last few days and that many are having the last few days is the answers are just as good. But when we prompted the app to tell us more about Tiananmen Square, it said it could not answer. Any software or service that comes out of China is going to be highly restrictive. Again, that's why the actual use of DeepSeek in the app store or elsewhere directly on a Chinese server, probably not a good idea. Not a good idea for maintaining data, maintaining data privacy. It's at least as bad, if not worse, than TikTok. But that's not what's going on here. What's really going on is that we've had a massive breakthrough in the productivity and efficiency of AI models that's going to be adopted by all the other companies that are developing these frontier AI models. Do you think of this as a turning point in the global AI arms race? Obviously, the U.S. has been putting export restrictions in place, trying to maintain its leadership position. Does it look like that's changed? Absolutely. We thought we had a massive lead over China and turns out we do not. Clearly, this is the U.S. government going out to reconsider how its approach to AI. And Big Tech will be rethinking its plans as well. They've embarked on these huge plans for massive data center build outs. They want to turn on Three Mile Island and build all the nuclear plants and stretch our energy resources to build bigger and bigger models. Turns out they don't need to. They're going to have to pause and rethink all those build out plans because it may turn out that they are somewhere between wasteful to foolish.

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Rise of AI