DeepSeek

[AKIron]

I'm not inclined to trust any AI. China or US made.

[CptTrips]

They are a bit over-valued for sure,  CLS more fairly than the others, but losing 3 months of gains in 1 afternoon is getting freaking ridiculous... I don't know why anyone would want to use AI from freaking China in the first place. Isn't it going to heavily censored and manipulated anyway?

I'm hoping we see a bounce back. Probably an excuse and buying opp for large firms/institutions to get in cheaper after 100b investment announcement.

It's open source.  You can get the code and see what's in it. 

They might have censored their own LLM to exclude sensitive topics, but others can take the same code and build their own unconstrained LLM.  The LLM is just collected data.  We know how to do that. 

It is the processing and search logic and algorithms.  and efficiency heuristics where the secret sauce lives and that is in the open source code so all can see what's going on there. 

The win isn't their censored LLM, but the trick of how to search it without resorting to insanely inefficient brute force methods instead of taking a more "intelligent" approach. That saves us on hardware and power requirements.

We can collect our own LLM.

IMHO.

This is great for AI overall.  Great for small to mid companies.  Bad for the massive monopolies that thought they were going to be able to corner this market.

Reminds me of the rise of the PC.  Things moved from having to run on large expensive main or mini frame computers completely dominated my some big name dinosaurs.  PC came around and most of that because obsolete with a MUCH cheaper solution and wild west freeing of the market for smaller players.

[CptTrips]

I'm not inclined to trust any AI. China or US made.

I will trust AI as much as I trust people.   

That doesn't mean they can't be useful.

[CptTrips]

I do wonder what the REAL cost of developing DS was.  I have huge doubts that the Chinese are being forthcoming about the resources actually put into Deepseek.

Oh, I get you now.

Well, I guess my response is, "What do I care?"

If the question is, did they spend 5 mil to create this and provide it to me free?  Or did they really spend 5 trillion developing this to provide to me for free?

Do I care?  You had me at the "free" part (and open source to protect against malware).

In fact, isn't it even better I am getting something for free the CCP spent trillions developing?  Fine.  Uhhh thanks.   

[guncrasher]

I thought we were dont with the sex change talk


semp

[Maverick]

Given the way the chinese have been constantly trying to mine data from everywhere and likely have back doors into most of their industrial products (electrical grid anyone), why would any rational person want to load their AI software into their computers? We talk about "big brother" frequently, this is like dumping their version of 007, Q, and the chinese cia into your machine with an open door to any and all data you have.

Hell, they have been mining data on troop movements and other information from the fit bit products troops have been using according to the DOD.

[icepac]

They have grown it on a steady diet of lies.     This can only fail eventually.

[CptTrips]

Given the way the chinese have been constantly trying to mine data from everywhere and likely have back doors into most of their industrial products (electrical grid anyone), why would any rational person want to load their AI software into their computers? We talk about "big brother" frequently, this is like dumping their version of 007, Q, and the chinese cia into your machine with an open door to any and all data you have.

Hell, they have been mining data on troop movements and other information from the fit bit products troops have been using according to the DOD.

I'm not sure some of you are understanding what this is.

The Chinese company came out with an algorithm that does through clever software, what Western countries thought could only be achieved through massive brute-force computing with the use of highly sophisticated specialized AI chips that would consume VAST amounts of power that entire new power production systems would have to be built to support.  This Chinese firm figured out how to do the same work cleverly without needing massive new hardware investment.  Then they release the underlying code out to open source.  We can now look at every line of code in there thing.   

Open Kimono.  There are no secrets back doors possible with open source. Or exceedingly unlikely.  Your risks are higher installing twitter or MS Office.  Those are not open-sourced.  In the next weeks, hundreds of Western security experts will be combing though that code looking for anything sketchy.  They are highly incentivized to get famous finding and publicizing the hidden malware if there are any.  If they can't find anything with the actually source code in their hands, it is probably safer than many products you install every day.  Western companies will be taking that code and building their own platforms for testing to verify performance.  If there cyber threats or it fails to perform as advertised, then that will come to light fairly quickly.

I think this is just going to be one of those cases like Sputnik or Gagarin's orbit where rational Western observers are just going to have to admit they beat the pants off us.  You can pout and make up all kinds of conspiracy theories or you can just admit it and get busy catching up.  Ironically they may have done us a huge favor.  We might have just dodged a multi-trillion dollar bullet going down the wrong, very expensive path.  It's an unqualified benefit for everyone, IMHO, except maybe NVIDIA.  They'll live.  They just may have their stock prices adjust to something more sane.

You're not going to see Chinese companies taking over.  You are going to see a new explosion of AI progress and adoption especially of small to mid-sized companies that were going to be mostly monopolized out of the competition by who had deep enough pockets to buy all the hardware to support the old inefficient approach.  What you are going to see over the next two years is a massive influx of smaller AI players innovating and competing in the space now.  They will take that base code and further expand it and enhance it now that they have a basic better, cheaper approach but the biggest impact will be from Western companies leverage the new approach with their own products based on that algorithm.

I can't see how this isn't an unequivocable good thing for the vast percentage of the West as well.  It's just that we now see how to do more with less and we are not locked into the NVIDA monopoly.  But every paradigm shift innovation is going to have market winners and losers.  The automobile was a bad thing for buggy and whip manufacturers, but in reality a benefit for everyone else.

If we didn't have the source, it would be a different story.

[Animl-AW]

This hands the source to people who will use it for bad intensions.
Basically, open source delivers great tools to terrorist.

China also sold us toys with lead paint and probably still do. Of course lead affects the brain and ya literally go stupid for life.

We have real troubles thinking past 5 minutes of sensation. Our enemies think the long game.

Russia will have a fun time with this.

[Gman]

Oh, I get you now.

Well, I guess my response is, "What do I care?"

If the question is, did they spend 5 mil to create this and provide it to me free?  Or did they really spend 5 trillion developing this to provide to me for free?

Do I care?  You had me at the "free" part (and open source to protect against malware).

In fact, isn't it even better I am getting something for free the CCP spent trillions developing?  Fine.  Uhhh thanks.   

I agree, 100%, however, the biggest reason IMO that nVidia took such a hit was that the "big" part of the Deepseek advantage is the small cost of development.  Yes, the method it operates and its efficiency/etc is a huge advantage/improvement. The markets reacted the way they did and the uber sell off happened because of - $$$ - of course.  IF the story was "DS cost 5 billion to develop, but wowzers, look at its massive increase in performance and efficiency", it wouldn't be nearly the shock to the market that it was yesterday.  That's all I was saying.

I kind of hope as well that it cost the CCP some ridiculously huge $ that they've hidden in order to develop DS, it makes me happy too to get something free, or rather for all the smaller companies and enterprises to get it free.  That said, China never does ANYTHING without a short and long term strategic plan, and they wouldn't do something that harmed them financially without gaining at least something, somehow.  So we'll see what the ramifications of it all later I believe.

[CptTrips]

I agree, 100%, however, the biggest reason IMO that nVidia took such a hit was that the "big" part of the Deepseek advantage is the small cost of development.  Yes, the method it operates and its efficiency/etc is a huge advantage/improvement. The markets reacted the way they did and the uber sell off happened because of - $$$ - of course.  IF the story was "DS cost 5 billion to develop, but wowzers, look at its massive increase in performance and efficiency", it wouldn't be nearly the shock to the market that it was yesterday.  That's all I was saying.

I kind of hope as well that it cost the CCP some ridiculously huge $ that they've hidden in order to develop DS, it makes me happy too to get something free, or rather for all the smaller companies and enterprises to get it free.  That said, China never does ANYTHING without a short and long term strategic plan, and they wouldn't do something that harmed them financially without gaining at least something, somehow.  So we'll see what the ramifications of it all later I believe.

It's entirely possible that they lied about how much they poured into the development to embarrass the West.  There is a prestige win here.  They look smart, we look dumb and lazy.  Like players who claim they only fly with mouse and keyboard to mess with the minds of other players they shot down who were using full HOTAS.  Or they may be telling to truth.  Nothing they were doing really need that much funding.  Not like NIVDIA having to design and fabricate complex new chips.  What they did was good old fashion programming.   Brain power is cheap compare to new chip fabrication.

I think the release was more about breaking the developing American monopoly in AI due to our near limitless resources.  With one stroke, they are now creating potentially hundreds of new competitors, which can compete with the American companies on level ground.  Certainly NVIDIA had no incentive to try and find a cheaper approach. 

I think the real driver of the market drop was the realization that NVIDIA wasn't going to have the monopoly everyone thought it was going to have.  NVIDIA stock has been speculated up to truly insane multiples based on the false belief that NVIDIA wasn't worth that now but they had a monopoly on humanities new future technological foundation.  Now that that looks dubious, a re-pricing based on a new outlook of the future revenue is inevitable.  Now that it's clear they will not have the monopoly assumed.  That's healthy market action, IMO.

How much it took to develop is in the past.  That is sunk cost.  Sunk cost has no importance in estimating future earning. It is the re-estimation of NVIDIA future earning that is driving the re-pricing action.  Not embarrassment on how easily (or not) they were outmaneuvered.  The market doesn't care about sunk cost only future earnings.

You'll see the phenomenon in real-estate.  A owner buys a house at the market peak say $500k, and years later the bubble pops and that same house is just only worth $350k now.  The owner will cry a river when they go to sell and may list it a ridiculous prices because, "man, I put so much money into this property  I should get that back."  The market doesn't care about how much you paid or your other sunk costs.  Today, it's worth $350k on the market.  Deal with it.

Sunk cost, small or large, doesn't not effect current market value.

But yeah, we'll have to see over time how this plays out.  But this could be huge.  Like on the level of the development of the PC.  We had computers for decades monopolized by the gov and mega corps.  The PC democratized technology so that everyone has the same processing power on their desktop only IBM used to have.  Kinda hurt IBM, but the rest of the world benefited hugely.

Or it may turn out their advantage was BS.  With open source, that secret would soon be revealed.

[Eagler]

If you have a bird buddy or one of the numerous security cameras you already have china in your network

That said I have zero use for ai .. foreign or domestic

Eagler

[Gman]

It's entirely possible that they lied about how much they poured into the development to embarrass the West.  There is a prestige win here.  They look smart, we look dumb and lazy.  Like players who claim they only fly with mouse and keyboard to mess with the minds of other players they shot down who were using full HOTAS.  Or they may be telling to truth.  Nothing they were doing really need that much funding.  Not like NIVDIA having to design and fabricate complex new chips.  What they did was good old fashion programming.   Brain power is cheap compare to new chip fabrication.

I think the release was more about breaking the developing American monopoly in AI due to our near limitless resources.  With one stroke, they are now creating potentially hundreds of new competitors, which can compete with the American companies on level ground.  Certainly NVIDIA had no incentive to try and find a cheaper approach. 

I think the real driver of the market drop was the realization that NVIDIA wasn't going to have the monopoly everyone thought it was going to have.  NVIDIA stock has been speculated up to truly insane multiples based on the false belief that NVIDIA wasn't worth that now but they had a monopoly on humanities new future technological foundation.  Now that that looks dubious, a re-pricing based on a new outlook of the future revenue is inevitable.  Now that it's clear they will not have the monopoly assumed.  That's healthy market action, IMO.

How much it took to develop is in the past.  That is sunk cost.  Sunk cost has no importance in estimating future earning. It is the re-estimation of NVIDIA future earning that is driving the re-pricing action.  Not embarrassment on how easily (or not) they were outmaneuvered.  The market doesn't care about sunk cost only future earnings.

You'll see the phenomenon in real-estate.  A owner buys a house at the market peak say $500k, and years later the bubble pops and that same house is just only worth $350k now.  The owner will cry a river when they go to sell and may list it a ridiculous prices because, "man, I put so much money into this property  I should get that back."  The market doesn't care about how much you paid or your other sunk costs.  Today, it's worth $350k on the market.  Deal with it.

Sunk cost, small or large, doesn't not effect current market value.

But yeah, we'll have to see over time how this plays out.  But this could be huge.  Like on the level of the development of the PC.  We had computers for decades monopolized by the gov and mega corps.  The PC democratized technology so that everyone has the same processing power on their desktop only IBM used to have.  Kinda hurt IBM, but the rest of the world benefited hugely.

Or it may turn out their advantage was BS.  With open source, that secret would soon be revealed.

Agreed, and I know that the development costs are sunk, however those costs are indicative of future value as well - they may be history, but moving forward without having any real idea yet of what future revenue potentials are, especially with it being open source.  IMO the markets partially rate DS's future value based on its past sunk development costs.  In addition to rushing to judgement on nVidia's position now. 

IMO this is an engineering at scale problem. China can do that. American AI developers invented the space and got it where it is and then the DeepSeek engineers used that framework and iterated a couple of additional efficiency innovations and the tech market went berserk. It's not too far off China's traditional MO for a great many things IMO. Itteration vs innovation.  China isn't a culture that's emphasized innovation, at least it wasn't when I lived there (well Hong Kong pre 1997), but I don't think that's changed much. This new DS development is largely just a movement towards the inevitable commoditization of AI. If anyone knows how to commoditize, it's the Chinese. The West will copy these iterations and continue on the innovation train.  That seesaw isn't necessarily a bad thing, as you've accurately pointed out in a couple posts.

Very interesting discussion here, it's great to have an AH thread that doesn't devolve into the usual mess.

[Eviscerate]

Very interesting discussion here, it's great to have an AH thread that doesn't devolve into the usual mess.

I give it until page 4.

[Meatwad]

With all the chinese techno garbage in the usa and around the world connected to the internet, where do you think the chinese ai gets all its computing power from?