DeepSeek and Everyone’s Assumptions About AI Costs

 

The Chinese upstart says its rival to ChatGPT comes at a fraction of the cost, raising questions about the rationale for stratospheric AI budgets

 “We’re probably a year-plus ahead in models,” Ruth Porat, president and chief investment officer at Alphabet Inc., told Bloomberg News at the event.

But, she added, “it isn’t a foregone conclusion” the US holds on to its advantage.

Even that may have been overly optimistic. 

That same week, a little-known Chinese AI startup called DeepSeek released a new open-source AI model called R1

Bloomberg 28 January 2025

https://www.bloomberg.com/news/articles/2025-01-28/deepseek-ai-platform-brings-a-1-trillion-market-reckoning-on-cost 


Apple will be cheering that its decision not to throw billions at building AI capabilities has paid off. 

It can sit back and pick the best models from a newly commoditised selection.  

Moreover, efficiency gains are likely to result in greater use of ai. 

The Jevons paradox—the observation that greater efficiency can lead to more, not less, use of an industrial input—may come into play.

The Economist 29 January 2025










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