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Revolution in AI! Chinese company creates technology that surpasses ChatGPT with a surprisingly low investment
The recent rise of China in the artificial intelligence (AI) is causing concern in Silicon Valley. The DeepSeek, a previously unknown Chinese AI lab, has surprised the world by releasing a large, free, open-source language model open.
Despite being built on a budget of less than $6M monthly and using Nvidia H800s chips, with reduced capacity, the model managed to surpass strong competitors from the United States, such as Meta Llama 3.1, OpenAI's GPT-4o and Anthropic's Claude Sonnet 3.5. This turnaround is challenging the US's global leadership in the sector.
DeepSeek's technological advancement
In third-party benchmark tests, DeepSeek's model excelled in a number of areas, including complex problem solving, mathematics, and coding.
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Additionally, the company recently announced r1, a reasoning model that also outperformed OpenAI's o1 model in several of these tests.
"Seeing the new DeepSeek model is super impressive in terms of how they actually made an open source model efficient in terms of inference time computation“, said Satya Nadella, CEO of Microsoft, during the World Economic Forum in Davos.
Chinese challenges and solutions in the face of US restrictions
A DeepSeek faced significant challenges due to strict US-imposed semiconductor restrictions, which prevented China from accessing more powerful chips such as H100s from Nvidia.
However, the company's advances suggest it has found creative ways around these barriers, possibly through techniques such as model distillation.
This process allows a smaller model to learn from a larger model, reducing costs and optimizing computational efficiency.
"They can take a really good, big model and use a process called distillation to train a smaller model, making it smarter in a very cost-effective way.“, explained Chetan Puttagunta, partner at Benchmark.
The role of the hedge fund and the mystery surrounding DeepSeek
Little is known about the internal structure of the DeepSeek and its founder, Liang WenFeng. The company emerged from the hedge fund High-Flyer Quant, which manages approximately US $ 8 billion in assets.
The company's lack of transparency has led to speculation about its true potential and future plans.
Other Chinese AI initiatives
A DeepSeek is not the only Chinese company gaining ground on the global AI scene.
Startup 01.ai, founded by renowned researcher Kai-Fu Lee, managed to train an AI model with just $3 million.
Additionally, ByteDance, the parent company of TikTok, recently announced an update to its AI model, which also outperformed OpenAI's o1 on key benchmarks.
"Necessity is the mother of invention“, said Aravind Srinivas, CEO of Perplexity. “Because they had to figure out workarounds, they ended up building something much more efficient.”
Impacts on the future of global AI
The rapid advancement of China em IA raises questions about the sustainability of massive investments by American giants in AI infrastructure and models.
If Chinese companies can develop competitive models with fewer features and less advanced hardware, Western companies will need to reconsider their strategies to maintain leadership.
For the United States, this scenario represents a warning about the need to review its technology export restriction policies.
Furthermore, the efficiency of Chinese solutions could lead to a redefinition of research and development priorities in the West.
The emergence of DeepSeek as a threat to US dominance in AI is a reminder of the dynamism of this industry.
China’s ability to develop high-performance models on reduced budgets challenges existing assumptions about the hardware and investment requirements needed for significant breakthroughs.
Therefore, companies and governments need to closely monitor China's advances and seek innovative solutions to remain competitive in the global AI market. The next decade promises to be decisive in determining who will lead this technological revolution.
