DeepSeek

Our tech industry just had a wrench thrown into its works from a smallish Chinese AI startup, DeepSeek. This company was able to create and train an AI model at a fraction of the cost that others have been spending. They even published a white paper on how they did it. The question is what impact will this have on AI incumbents?

Assuming that we can take this advance at face value, then near-term the impact could be one where new models can be created and trained much more cheaply. So yes, the AI revolution may be open to more firms and be a little less lucrative to hardware suppliers.

Over the long-term, AI will be more accessible, and more and more uses can be made of it. Innovation may explode, just like what happened around the internet as it became more accessible and cheaper. We cannot possibly imagine all the uses to which this technology can be applied. Just like who could imagine 20 years ago that our concert tickets would reside on our smartphones? And did we really predict our smartphones back then?

In addition to innovation, AI may itself be able to become much more powerful and adaptable – self-driving cars and humanoid robots. So instead of being limiting, hardware suppliers may find their frontier of opportunity exploding. It is the intermediate term where predictions get tricky. How soon will the explosion in use cases happen and will that offset the new efficiencies that DeepSeek has unveiled?  Maybe, but surely AI will become even bigger than ever.  We live in interesting times. Stay steady my friends.

-The Lonely Bull