“DeepSeek is a Chinese artificial intelligence company that develops open-source large language models. It’s funded by Chinese hedge fund High-Flyer, both of which were founded by Liang Wenfeng and based in Hangzhou, Zhejiang.
DeepSeek rocketed to the top of Apple’s App Store charts in the US this week, dethroning OpenAI’s ChatGPT as the most downloaded free app, sparking huge interest and market reactions.
The supposedly super-efficient, open-source software is raising some serious questions about the stock market valuations of key tech giants, including the chip maker Nvidia, whose stocks are getting crushed today.
Designed for solving complex problems, a big part of the concern is DeepSeek’s new R1 reasoning model reportedly performs as well as OpenAI’s o1 on certain benchmarks. R1 was built on the V3 LLM, which the company claimed is on par with GPT-4o and Anthropic’s Claude 3.5 Sonnet, but cost less than $6 million to develop.
By contrast, OpenAI CEO Sam Altman has said GPT-4 cost over $100 million to train. Having said that, there’s already plenty of evidence that it all “depends”, and these models often return different results on multiple use, with pretty varying performance.
The big question that’s causing most of the concern is whether the entire industry has been wildly overspending and investing? It’s also raising profound questions about how China may have undercut America’s (and emerging UK, Europe and likely other markets) most critical economic advantage on A.I. by making its technology free.
There’s so much to unpack and some massive questions to answer from the true cost, model implications, trust, how it can be harnessed from a business PoV, the censorship people are already reporting and how this will work going forward etc. etc. etc. Until we have more information, it will be very difficult to get to the bottom of any of these things.
It is certainly way too early for any stock market calls. Lets hope the trading algo doesn’t get carried away. Another “fake” market move is exactly what we don’t need. Once we start getting more information and answers we can start to form more considered views.
For now we need to keep exploring all of these models. For most of us harnessing multi-AI agent strategies means looking in-depth at everything in this space and asking more questions of our technology foundations, data models, security and so on.
These systems are, at the moment, hard to protect or control, which makes it harder to stop them doing something wrong, or at least interrupting this output and managing it. And, by the way, it will potentially be doing this at a massive scale – so the imperative to counter intuitively be deterministic is high.
Existing regulatory frameworks even now make that accountability and responsibility pretty clear.
That’s why insurers, for example, need to think super hard about designing AI systems differently, and designing their businesses around these technologies differently as well.
They have huge societal implications. People, finances, vulnerability, risk understanding, health and so on are all potentially impacted.
We need to be human-centered. We need to think really hard about how we build core systems and foundations that can harness the AI, keep humans in the loop and in control, allow multi-agent strategies to be realized, and make it easy to keep pace with the rapidly changing AI landscape.
The AI you are using and adopting today will become defunct in the next year. We don’t know which side of singularity Chat GPT is according to Sam Altman. We know that processing speed and intelligence is set to rapidly change. And we know that countries are pouring billions into this technology.
Keeping pace will require huge amounts of core adaptability, in infrastructure like energy, but in the way businesses are built as well, and this required enterprise design change currently rarely exists in insurance.
There will be a lot more to follow on this as people begin to explore trust, usage and acceptance and really what’s behind DeepSeek.
It has definitely put the cat among the pigeons.”
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