LEMON DROP | DeepSeek Shocks the World & U.S. Stocks Sink
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What is the main topic discussed in this episode?
I think this deep-seek AI is going to have more ramifications on the economy than you think. Why did the Dow Jones and the Nasdaq crash first thing on a Monday morning? Why did they drop a whopping 300 and 800 points, respectively, sending investors into a tailspin? Why? Was it Trump's immigration rates harming the agricultural sector?
Why did U.S. stocks plunge Monday after DeepSeek’s announcement?
Was it Trump's tariff threats over the weekend? Not quite. For once, it doesn't seem like Trump or his temper tantrums are involved, but His buddies certainly are. For years, Trump's billionaire tech bro BFFs have thought that they were kings of the world. They assume that their research into artificial intelligence was light years ahead of everybody's, everyone else's. Their technology would revolutionize human society and make them wealthy beyond comprehension, wealthy beyond anybody's wildest imagination. Well, we now know that Sam Altman, Mark Zuckerberg and company, they are maybe not as smart as they thought they were. Maybe not. You see, Monday morning stock market crash was a result of the world finding out that they may actually be pretty bad at their jobs.
It was a technological leap that shocked Silicon Valley, a newly unveiled free open source AI model that beat some of the most powerful ones on the market. But it wasn't a new launch from OpenAI or model announcement from Anthropic. This one was built in the east by a Chinese research lab called DeepSeek. And the details behind its development stunned top AI researchers here in the U.S., First, the cost. The AI lab reportedly spent just $5.6 million to build DeepSeek version 3. Compare that to OpenAI, which is spending $5 billion a year. And Google, which expects capital expenditures in 2024 to soar to over $50 billion. And then there's Microsoft that shelled out more than $13 billion just to invest in OpenAI.
But even more stunning, how DeepSeek's scrappier model was able to outperform the lavishly funded American ones. to see the DeepSeq new model. It's super impressive in terms of both how they have really effectively done an open source model that does what is this inference time compute and it's super compute efficient. It beat Meta's Lama, OpenAI's GPT-4.0, and Anthropic's CloudSonnet 3.5 on accuracy on wide-ranging tests, a subset of 500 math problems, an AI math evaluation, coding competitions, and a test of spotting and fixing bugs in code.
Yes, DeepSeek shocked the world. The tiny Chinese startup, fewer than 200 employees, appears to have eaten Google and Meta and OpenAI's lunch. Not only does their artificial intelligence seem much smarter than any American version, they produced it for, get this, it's a fraction of the cost. To reiterate, DeepSeek made theirs with $5.6 million. OpenAI will spend $5 billion on their tech this year alone. Now, listen to my friend Andrew Ross Sorkin over at CNBC. He breaks it down. Breaks down what could be the earth-shattering implications of all of this.
Watch this. Today, this week, last week, I think is going to be historic in terms of a major shift, an upending of the entire paradigm around artificial intelligence. the big tech companies, the big chip companies, and everything else around it, including energy. You know, for a very long time, last two years, we've talked about these scaling laws, this idea that for AI to get better and better, you need faster and faster chips. They need to be putting tens and hundreds of billions of dollars of investment in place. They need enormous amounts of energy to support all of that. All of a sudden, literally in a week, we've now seen deep seek this Chinese large language model emerge where it appears it's all being done at a fraction of the energy, at a fraction of the chip usage.
And so if that is true, It really changes the dynamic about all of these investments. We just saw last week, Sam Altman, standing next, Sam Altman, OpenAI, standing next to President Trump talking about how they're going to invest, you know, $100 billion, $500 billion in chips. And the question is, do you need all of that if, in fact, this small group, tiny group of 200 people figured out how to do this?
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:00–0:22
2
Why did U.S. stocks plunge Monday after DeepSeek’s announcement?
0:22–6:59
3
How did DeepSeek’s open-source model reportedly outperform GPT-4 and Claude?
6:59–8:00
4
How much did DeepSeek spend to build its model versus OpenAI and Google?
8:00–8:39
Speakers
3 identifiedMore from The Don Lemon Show
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