Now that I got you hooked, let me explain.
The SP500 Index fund (which has shares of top 500 US companies) has felt a considerable drop in value, and all is because of an Open Source, free of charge, model released by a Chinese Company DeepSeek R1.
But you might wonder, “so what’s the big deal? There are plenty of free models online”. Well the thing is, this model was built from the grown up, using completely different methods, and unlike and it beats or is at least on par with the most sophisticated OpenAI O1 models, which are extremely expensive, and it doesn’t need to run on heavy duty machines like the H100s GPUs that are $35k a pop. If you want to be a company to do so you need to be at Meta-level of income, just a year ago Meta bought $21.000.000.000 worth of these GPUs from Nvidia 🤑.
“Okay, I don’t care if I can run them on a cheaper machine, so what?” Well, what it is.
In the grand scheme of things, it means that Nvidia albeit holding the crown of hardware for AI machines (for now), it means that people don’t actually need the machines they’re selling for a freaking ton of money, because you can achieve the same on waaaay cheaper stuff.
It also means that OpenAI's crown is down, it means that you don’t need to pay them a shit load of money to have the greatest and best AI, but you can actually use alternatives, and that is a really big deal. Finally, it means that China is actually ahead of the US in the best and most powerful AI model, and that is a freaking big deal.
The Stock Market reaction is proof that well shit hit the fan. The deep seek chat app was number 1 in the app store, twitter blew up with deep seek posts, even instagram is kinda full of deepseek ai stuff. In a nutshell, this is a massive deal.
The aftermath of market reaction is that it is possible that the tech giant bubble might pop, and that might send the tech giants into a deep rabbit hole. Let's see how this is going to play out, I'm very excited about this.
Now if you want to try the model yourself you can do it here for free: chat.deepseek.com and judge for yourself.
Alternatively you can run it on your own machine using ollama, but that’s not going to offer you a full experience out of the box, but rather a limited one, the UI interface is not the same.
Ultimately the conclusion is:
- AI tech giants are worried, life is about to change.
- Competition is open source, free of charge, free to use, and is incredible at what it does.
- The state of art models that were previously only available to users with deep pockets, are now available for free to anyone.
It is wonderful, because heavy competition means heavy progress - everybody’s gonna fight for that number one spot.
Open AI has a lead of over 5 years, but that means nothing when the new kid beats the shit of you. Time will show if this was pure luck, or a calculated decision.
The future is sooooo exciting!
