The emergence of DeepSeek — a Chinese AI model that was developed for a fraction of the cost of leading Western ones, but seems to perform on par with them — caused chaos in the markets and electrified the tech industry. This episode was produced by Miles Bryan and Victoria Chamberlin with help from Amanda Lewellyn, edited by Amina Al-Sadi, fact-checked by Laura Bullard, engineered by Andrea Kristinsdottir and Rob Byers, and hosted by Noel King. Transcript at vox.com/today-explained-podcast Support Today, Explained by becoming a Vox Member today: http://www.vox.com/members The DeepSeek logo on a phone in front of a flag of China. Photo illustration by Anthony Kwan/Getty Images. Learn more about your ad choices. Visit podcastchoices.com/adchoices
Chapter 1: What is DeepSeek and why is it significant?
Everyone's talking about DeepSeek. DeepSeek. Satya Nadella at Microsoft.
I think DeepSeek has, you know, had some real innovation.
Mark Zuckerberg at Meta.
You know, I think that there's a number of novel things that they did that I think we're still digesting and appreciating. There are a number of things that they have advances that we will hope to implement in our systems.
The president of America.
The release of deep seek AI from a Chinese company should be a wake up call for our industries that we need to be laser focused on competing to win.
It's a chatbot. It's a white paper. It could help write code for a Tetris game. Tetris. It could solve a math theorem. It's chips, you guys. On Today Explained, the week the world wilded out over DeepSeek. And also, what is DeepSeek? Coming up.
In every company, there's a whole system of decision makers, challenges, and strategies shaping the future of business at every level. That's why we're running a special three-part Decoder Thursday series, looking at how some of the biggest companies in the world are adapting, innovating, and rethinking their playbooks.
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Chapter 2: How did DeepSeek impact the stock market?
It was really, really important because DeepSeek, this kind of little-known Chinese lab, for the first time released a paper with a very, very detailed explanation, a kind of technical recipe, as it were, for building a reasoning model. Now, reasoning models are important.
It's a fairly new area of AI, but it basically means models that can teach themselves and improve themselves without human supervision. And this is really important because if we can kind of use this in practical applications, it means that AI will be capable of critical thinking and will be useful in tasks that are vastly more complex than what we currently have on the market.
The dream, right, is to have an AI, for example, running in the background of your computer and kind of preempting your needs, like booking travel, doing things that you haven't even thought of maybe. It's kind of acting as your actual personal assistant. They don't just respond to demands. They preempt things. Hello, Noelle. What can I get for you today? They make decisions on their own.
They might, for example, I mean, figure out that you have not got enough groceries in your fridge and think, okay, well, we'll preemptively order that so you don't even have to do it yourself, right? I ordered extra Cheetos this week. You deserve them. It's still very much an open question as to whether or not we're going to get there. It's important to note as well that this is just like...
A big marketing strategy on the part of a lot of AI companies also to justify continuing to raise billions of dollars. But what I think DeepSeek proved over the past week is actually China is a viable and competitive player in this field.
So let's talk about where DeepSeek comes from. Who's behind this?
So unlike other AI companies, AI startups in China, it hasn't raised any external financing. So you think, okay, how the hell has a company managed to build what we know is a very expensive endeavor of buying all of these GPUs and also hiring the best talent? They're known along by dance for paying the top dollar for the best AI researchers. in China.
And that's basically a story about the founder, Liang Wenfeng, who has a background as a quant hedge fund manager. So he basically made a whole bunch of money trading stocks and decided to plow some of those resources into this new pet project. And he started in 2021 building this large Nvidia cluster because he recognized the potential for this technology.
And the timing of that is important for two reasons. The first is that it was really before the world woke up to the potential of generative AI. It was before the release of ChatGVT, and the rest of the Chinese players had kind of neglected generative AI as a field of research. They were much more focused on surveillance technology, surveillance AI, because it was clear that
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Chapter 3: Who is behind DeepSeek and what is its history?
The biggest takeaway for me is that the market really does not understand the AI industry yet.
What's been going on with all of Deep Seek's Western competitors? What have they been up to?
They're all investing massively in these huge data centers.
It's my honor to welcome three of the world's leading technology CEOs.
With hundreds of thousands of graphics processors, tens of billions of dollars. In fact, you probably heard last week there was a deal announced for $500 billion.
Stargate. So put that name down in your books.
With OpenAI.com. and Oracle and MGX and SoftBank.
I mean, massive amounts of money. I think this will be the most important project of this era for AGI to get built here, to create hundreds of thousands of jobs, to create a new industry centered here.
And what that investment is for is running these models because there is so much demand. These companies really can't meet it right now. And what we're also finding is that inference, which is just the fancy term for running these models, actually can now increase capability of the models a lot. That wasn't the case before when ChatGPT first came out.
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Chapter 4: What makes DeepSeek different from other AI companies?
Semaphores read Albergati, thanks to him. Miles Bryan and Victoria Chamberlain produced today's show with an assist from Amanda Llewellyn. Amina El-Sadi is our editor. Andrea Christen's daughter and Rob Byers engineered. Laura Bullard checks the facts. I'm Noelle King. It's Today Explained.